Texas data center operations experienced a significant surge, potentially posing risks to system reliability, according to a watchdog.
The integration of large loads, particularly data centers, into Texas' electric grid presents a significant and growing reliability risk, according to the Texas Reliability Entity (Texas RE). This rapid growth, driven by the expansion of AI and data centers, poses challenges in accurately forecasting load growth and planning grid capacity.
**Challenges**
The Electric Reliability Council of Texas (ERCOT) anticipates up to 70-150 GW of new load by 2028-2030, compared with about 86 GW peak in 2024. This rapid increase creates difficulty in forecasting load growth and planning grid capacity.
The "disorganized integration" refers to speculative and numerous interconnection requests far exceeding actual projects, making grid planning and reliability harder to ensure. Large loads impose rapid and massive power swings, complicating grid operations and increasing risks of outages, especially in emergency situations.
**Strategies to Manage Integration**
To address these challenges, a multifaceted approach is being taken. Legislative actions, such as Texas' SB 6 in 2025, require non-critical large loads above 75 MW to curtail their demand during firm load shed events, making such loads responsive to grid needs and preventing overloads.
Cost allocation and interconnection rules, established by SB 6, aim at fair cost allocation and avoiding overbuilding. Regulators are also imposing curtailment mandates during emergencies and exploring how large loads might assist grid stability by adjusting consumption dynamically.
Infrastructure investments, such as natural gas plants, are being made to support additional load. Energy providers like NRG Energy are planning to add 5.4 GW by 2029. There is also a push towards encouraging data centers to produce a portion of their power onsite to reduce grid congestion.
Decentralized energy solutions, like Tesla’s Virtual Power Plant, which aggregates distributed energy storage, help balance grid demand and offer flexibility in energy distribution. Coordination and forecasting improvements are also being pursued through workshops hosted by the Public Utility Commission of Texas (PUCT).
**Summary**
The response to integrating large loads into the Texas grid combines regulatory measures (curtailment, cost-sharing), infrastructure expansion, promoting self-generation, and leveraging demand flexibility and distributed resources to mitigate risks associated with disorganized integration and steep load growth.
This approach aims to balance economic growth from data centers with the need for grid stability amid unprecedented demand growth and evolving energy use patterns. Commissioner Kathleen Jackson stated that the unique characteristics of large loads, such as data centers, could potentially assist the system, particularly in times of emergency.
However, the rapid growth of inverter-based resources, such as solar, wind, and batteries, poses a risk to the ERCOT grid due to their potential to trip offline during grid disturbances. Storage capacity is forecast to almost triple over the same period. Total energy from solar generation has increased almost 1,000% over the last five years, while energy from coal resources has declined 25%.
ERCOT is projecting solar generation capacity to nearly double over the next two years. David Penny, director of reliability services for Texas RE, mentioned that the load profiles of AI data centers have atypical, steep load ramps, which create issues for grid operators.
The PUCT is planning to host a workshop on July 21 to discuss the implementation of this legislation. The Texas RE report identifies the disorganized integration of large loads as the largest increased risk to the ERCOT grid. The Texas RE has identified the integration of large loads as a significant challenge requiring a comprehensive and proactive response. David Penny also stated that the integration of batteries in the system is improving primary frequency response metrics.
- The expansion of technology, particularly AI and data centers, creates challenges in the finance sector, as it necessitates changes in cost allocation and interconnection rules to ensure fair cost allocation and avoid overbuilding.
- In the energy industry, integration of large loads such as data centers poses a significant reliability risk, leading to a need for solutions such as onsite power generation by data centers and the implementation of regulatory measures to address such challenges.