Texas data centers raise blackout risk during extreme winter weather

The rapid expansion of data centers in Texas is increasing demand for electricity during the winter months and increasing the risk of supply shortages that could lead to power outages during freezing temperatures.

The Lone Star state attracts a huge amount of data center demand due to its abundant renewable energy and natural gas resources, as well as its business-friendly environment. OpenAI, for example, is developing its flagship Stargate campus in Abilene, about 150 miles west of Dallas-Forth Worth. Campus may require up to 1.2 gigawatts of powerthe equivalent of a large nuclear power plant.

The North American Electric Reliability Corporation warned this week that the 24-hour power consumption of data centers would make it difficult to maintain adequate electricity supply under extreme demand conditions during freezing temperatures, such as the disaster of Winter Storm Uri in 2021.

“Strong load growth from new data centers and other large industrial end users is increasing winter electricity demand forecasts and contributing to the continued risk of supply shortages,” NERC said of Texas. analysis It was published on Tuesday. NERC said Texas faces high risk from extreme winter conditions, but the state’s grid is reliable during peak demand.

Demand for heating homes increased rapidly in response to freezing temperatures during Uri, and many power plants failed due to the same weather conditions. Texas grid operator ERCOT ordered rolling blackouts of 20 gigawatts to prevent the system from collapsing. Federal Energy Regulatory Commission report. The majority of power plants were decommissioned and powered by natural gas.

This was the “largest manually controlled load shedding event in U.S. history” and caused 4.5 million people to lose power for several days. At least 210 people died in the storm. Most of the deaths were linked to outages and included cases of hypothermia, carbon monoxide poisoning, and medical conditions exacerbated by freezing temperatures. According to FERC.

Approximately 73% of projects requiring connectivity are data centers, According to ERCOT.

If all of these projects were actually built, they would be equivalent to the average annual energy consumption of about 154 million homes in Texas, according to CNBC’s analysis based on 2024 household electricity data. But the Lone Star state’s population is only around 30 million.

Beth Garza, former head of the ERCOT watchdog, said she was very skeptical that all of these projects would be built, describing the scale of the numbers as “crazy large.” According to ERCOT, more than half of the projects have not submitted planning studies.

“There just aren’t enough supplies on the equipment or consumption side to handle this much load,” said Garza, who was director of ERCOT’s Independent Market Monitor from 2014 to 2019. “There are too many things in the world to make these kinds of numbers work.”

John Moura, NERC’s director of reliability assessments, said ghost data centers are popping up in grid connection requests across the U.S. because developers are purchasing the same projects in multiple jurisdictions. This makes it difficult for utilities to predict future demand conditions.

The projects ERCOT has approved to actually connect to the grid are much smaller at 7.5 gigawatts, but that still represents a significant amount of new demand. By comparison, the six-county region of 1.7 million people in southeastern Pennsylvania that includes Philadelphia had a peak demand of about 8.6 gigwatts in 2024. state service board.

Texas’ supply and demand balance can become tight during the winter months, potentially falling into deficit. The state has 92.6 gigawatts of available resources, according to NERC, and peak demand in an extreme Uri-like scenario could reach about 85.3 gigawatts.

However, during extreme winter conditions, available power could drop to approximately 69.7 gigawatts, resulting in a supply shortfall of more than 15 gigawatts. This is due to typical plant maintenance and forced plant outages, as well as reductions in power capacity due to winter conditions.

“What’s important to understand is the tension that we’re seeing,” Moura said. NERC’s winter assessment includes only data center facilities that have reached certain milestones to filter out speculative projects, he said.

“I can’t emphasize enough what a massive shift this is for the electrical industry,” Moura said of data center demands. One solution, he said, is for data centers to be flexible in their electricity consumption to help keep supply and demand balanced during harsh winter scenarios.

In the case of Uri, natural gas plants accounted for 58% of all unplanned outages in Texas, according to FERC. Freezing temperatures reduced gas production, causing difficulties in distributing fuel and problems transmitting electricity as power lines were downed.

Texas passed rules to harden natural gas infrastructure for severe winters after the storm.

Solar power and battery storage also face challenges when gas plants are depleted at such a rapid rate, according to NERC. Moura said peak demand in winter is in the early morning hours when sunlight is less and batteries cannot be adequately charged.

Given that data centers operate around the clock, “it will become increasingly difficult to maintain adequate battery state of charge during prolonged high loads, such as multi-day severe storms such as Winter Storm Uri,” NERC said in its analysis.

“Certain regions of the U.S. may actually experience blackouts and widespread outages over the next few years as demand from facilities like data centers exceeds supply,” said Rob Gramlich, president of power consulting firm Grid Strategies. “These are unacceptable to everyone in the United States.”

Garza said he is confident that reliable demand from data centers will bring new supply. “Plants love these kinds of opportunities,” he said. “My expectation is that additional private capital investments will be attracted to meet these supply needs.”