“Our top priority is to protect Texans’ safety and quality of life,” Gov. Abbott wrote in his statement. “Any project that fails to comply with the requirements set forth by the PUCT and ERCOT, and by state law, must be denied connection to the Texas grid. Simply put, Texans must come first.”
This review reportedly stemmed from several data centers’ failure to comply with a PUCT survey to determine water and power usage. The agency says that it asked 377 data center companies to send the required information, but only 28 have submitted so far.
While this is not a statewide moratorium, it nonetheless affects the progress of many data center projects going through ERCOT approval. More than 1,800 projects are awaiting the go-signal from the regulator to connect to the grid, 90% of which are data centers. The combined demand that these applications will put on the grid is expected to hit 474 gigawatts, which is five times that of the current peak demand that ERCOT has recorded and is much higher than forecasted data center demand by 2035 .
This will put a dent in a lot of data center build-outs in Texas, but it still does not affect all projects, unlike the statewide ban that New York imposed . For example, El Paso, Texas, is outside the jurisdiction of ERCOT, so data center developments in the country can still continue unimpeded. Projects that are also bringing their own power are unaffected, as they do not have to connect to the ERCOT grid.
Texas county passes data center ban for rural areas for a year, move comes in wake of AI data centers moving to remote areas to skirt regulations
New York enacts one-year data center ban on projects larger than 50 megawatts
Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
- https://www.tomshardware.com/tech-industry/data-centers/SPONSORED_LINK_URL
- https://www.tomshardware.com/tech-industry/data-centers/texas-slams-on-the-breaks-for-1-800-data-centers-power-grid-requirements-are-five-times-higher-than-peak-record-demand-474-gigawatts-of-power-requests-are-now-subject-to-new-moratorium#main
- https://www.tomshardware.com/membership
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Informational only. No financial advice. Do your own research.