Texas has truly been at the helm of a transformation in our nation’s energy production. It seeks to harmonize its long-standing (and gas-heavy) thermal power sector with its recently accelerated renewable energy development. The state can take great pride in its combination of rich natural resources and highly innovative infrastructure projects. This formidable mixture has established it as the secret weapon in meeting data center’s ever-increasing demands. These facilities are on the rise due to the rapid increase in artificial intelligence and tech-related industries. They require a tremendous amount of energy to continue operating effectively.
Now, the Electric Reliability Council of Texas (ERCOT) is announcing an incredible surge in energy demand. From 2016 to 2024, demand increased by 31.3%. Global demand for dependable power continues to surge including in Texas. Today, the state serves as a living laboratory on moving away from conventional fossil fuels and towards abundant, renewable resources. Texas is home to more than 15,300 wind turbines and 197 utility-scale solar farms. This awe-inspiring collection catapults the state to number one in the nation for wind energy production.
Each time the state’s renewables capacity grows, it often clears more than 45% of the state’s electricity demand. This is why data centres are increasingly turning to energy sustainability, including uses of renewables. Texas is uniquely positioned to prove that we can power an AI-augmented future with clean, reliable energy.
A Renewable Revolution
Texas’s seriousness about renewable energy is reflected by the huge projects on the table and other initiatives underway. The state is home to dozens of data centres currently pioneering the test to see if they can operate fully on wind power. They’re stretching the limits of renewable energy! One high-profile case is Soluna Holdings’ 120MW South Texas data centre project, dubbed Project Hedy, which would use surplus energy from local wind farms. Beyond this, Equinix has constructed a Tier IV facility within their Dallas campus that they built to run on 100% renewable energy.
All of this dovetails nicely with Texas’s larger recently stated mission of increasing the state’s renewable energy capacity. As experts point out, gas and nuclear power have long been dominant forces in Texas’s energy economy. Renewable energy is a train that’s already moved and picked up a lot of speed nationally.
“Texas actually is a prime example of how quickly we can transition grids from fossil fuels to renewable energy, even without state support,” – Dennis Wamsted.
As the nation’s leader in renewable generation, Texas is hoping to meet the rapidly-increasing energy needs from data centres by moving so heavily into renewables. There are still issues to be worked out in dealing with the intermittency of all these renewable resources.
“Renewable power, due to its intermittent nature, cannot be a sole solution for data centres without any backup power or storage,” – [Unnamed source].
America’s demand for renewable energy is booming more than ever. Texas is proactively seeking to understand combinations of wind and solar and what backup systems are needed.
The Role of Gas in Meeting Demand
And even with the incredible expansion of renewable energy, gas is still a key player in Texas’s power generation plans. The state still accounts for more than half of all gas-based thermal power market for the state. At least 120 new gas projects are currently being proposed. In Texas, you’re developing a superlative 930MW three gas-turbine project outside of Corpus Christi. On top of that, you’re working on two other 900MW projects west and southwest of Houston.
Texas-based data centers are pushing a record wave of requests for new power capacity throughout ERCOT. In the meantime, gas-based projects are quickly being developed to serve this increased demand. Some analysts argue that while renewables are crucial for long-term sustainability, gas will play an indispensable role in the short term.
“Gas and nuclear will have to do some of the heavy lifting in the meantime,” – Pavan Vyakaranam.
In light of recent trends and projections, there is an ongoing debate regarding how best to balance gas and renewables in meeting growing demand. Even as most people are convinced that renewables can deliver the needed solutions, some warn against a tempting over-reliance on any one resource.
“In order to meet such a huge increase in demand from data centres, there is a need for large capacity additions,” – Pavan Vyakaranam.
This sentiment emphasizes a key point that we can’t flip the switch on renewable energy and stop using the fuels we’ve relied on in the past.
Future Outlook and Opportunities
As Texas balances its role in a reliable and resilient energy future, it observes with great interest to the promise of clean energy innovations. The state has gone to the front of the nation in producing energy from wind and solar. Now it stands poised to solidify its lead even further. The Texas Energy Fund provides state taxpayer dollars for data centre projects, illustrating a commitment to fostering innovation while supporting sustainable growth.
Texas’s developments are certainly making waves outside of its borders. Pennsylvania has seen more than $90 billion in investments by technology, energy, and finance companies. This investment is intended to position the state to become an AI innovation capital, as Texas has done.
“The 24/7 power demand sought by data centres and other high load users can be supplied by the ERCOT system,” – Dennis Wamsted.
As such, Texas and Malaysia have both emerged as significant case studies for data centre expansion and energy development. Their success demonstrates what is possible when implementing these strategies, giving other areas with the same sustainability goals tremendous hope.
