Dive Brief:
- The pause on Texas data center grid interconnections puts about 20% of the total U.S. data center pipeline at risk of delay, analysts at Bloomberg NEF said Wednesday in an analysis of the Lone Star State’s recent decision.
- Texas Gov. Greg Abbott, R, on Monday implemented the pause, which affects almost 49.8 GW of projects, BNEF said. Abbott called for an audit of all data centers in the Electric Reliability Council of Texas interconnection queue. That led the grid operator to delay its review of the first set of projects to navigate the state’s new large load interconnection process.
- Data center revenue losses could reach $8 billion by the first quarter of 2027 assuming 60% of the delayed capacity is AI-related, BNEF said. Should the pause extend into the 2027 Texas legislative session, the risk increases as lawmakers could consider changes to the new interconnection process.
Dive Insight:
The financial implications of Texas’ data center pause could be “immense,” BNEF said. The energy research firm is forecasting about 1.2 GW of total ERCOT data center additions between the second quarter of this year and the first quarter of 2027.
“Delays in energization over this period could thus put billions of dollars of data center leasing revenue at risk,” BNEF said. The firm’s analysis estimates AI computing capacity can earn around $1.76 billion per gigawatt per month.
“The implied revenue at risk for data centers runs into many billions of dollars if interconnection policy changes in the next term,” BNEF said.
ERCOT interconnection queue requests total about 474 GW, Abbott said in his Monday letter calling for an audit of data center proposals. “Approximately 90 percent of the new power requests are data centers,” he said.
The queue is more than five times ERCOT’s peak demand record, highlighting both the scale of the buildout and the potential for duplicative or excessive interconnection requests. BNEF expects that about 8.25 GW of additional data center capacity will come online in ERCOT through 2030, bringing the total to more than 17 GW. More than 70% of the approximately 50 GW of Texas data center projects BNEF is tracking are in the early stage, the firm noted.
The 2030 forecast “could be revised significantly higher” if ERCOT’s initial study of large load projects, known as Batch Zero, proceeds as planned, the firm said. But the new audit could create delays.
Abbott’s audit will examine: whether data centers are providing their own power or depending on the grid; their use of water; and which data centers are utilizing state or federal assistance such as tax incentives, grants or abatements.
“Any data center project that fails to comply with the verification and audit process to protect the reliability and resilience of the Texas electric grid must be denied,” the governor said in his letter.
The Texas moratorium follows New York, which in July halted new data center approvals for up to a year while the state creates new development rules.
