Texas Temporarily Suspends Grid Connections for New Data Centers

The government of the US state of Texas has temporarily suspended the review of applications to connect new data centers to the shared power grid. According to ixbt.com, this was caused by industry representatives’ demand for enormous amounts of capacity exceeding even record levels in the history of the energy system. As reported by Ixbt.com.

Governor Greg Abbott instructed the Public Utility Commission and ERCOT, the energy system operator, to subject all existing applications to rigorous review before issuing new permits. Around 1,800 projects are currently in the queue, approximately 90% of which are data centers.

Risk of Record Energy Shortages

According to ERCOT estimates, these projects could require up to 474 GW of total capacity. It was noted that this figure is significantly higher than the highest consumption record in the entire history of Texas’s power system.

Under the new rules, developers must now provide detailed information about electricity and water consumption, cooling systems, and private generation sources. Tax incentives, facility ownership, and measures to reduce the impact on local communities will also be examined closely.

Reasons for the Review and Grid Constraints

The stricter oversight was prompted by the fact that only 28 of the 377 companies contacted by the analytical body responded to its requests. Authorities deemed this insufficient for assessing future loads. Projects that fail to meet the requirements will lose their right to connect to the grid.

Nevertheless, the restrictions do not apply to all facilities. In particular, sites located outside the ERCOT service area or equipped with their own generation that does not require a connection to the shared grid are exempt from this procedure.

The decision has drawn mixed reactions in political circles. Some consider it too lenient, while others view it as a delayed step. However, in the AI infrastructure sector, where speed is crucial, these reviews could significantly delay the launch of major projects.