Texas’ primary electricity grid operator signed off on new rules for data center operators and developers that could have billions of dollars of repercussions if finalized.
The Electric Reliability Council of Texas is looking to establish new criteria and processes for bringing major energy demanders onto the grid as data centers and other large loads have asked for 450 gigawatts of power, more than five times the all-time high power demand ERCOT has ever recorded, E&E News By Politico reported.
ERCOT’s board of directors approved the two rule packages on Tuesday, but the Texas Public Utility Commission will have the chance to review the decisions. One package of rules would create a process to review large electricity users in batches, lengthening the timeline for data center electricity request review if not included in the first group, known as Batch Zero.
It is estimated that about 100 GW of projects would be considered far along enough in their development to be part of that group, ERCOT Vice President of Interconnection and Grid Analysis Jeff Billo said.
As part of the new rules, projects will have to pay nonrefundable fees, complete site control requirements and show proof of other milestones to prove a project is feasible and ready for development to be part of Batch Zero. ERCOT likely won’t develop rules for other batches until February.
Another package of ERCOT-approved rules would require data centers and crypto mining facilities to stay online during brief power disruptions on the grid, because tripping offline could spark a cascading chain of events and lead to blackouts, E&E News reported.
The rules would require any data center that can’t “ride through” brief outages to disconnect from the grid until it comes into compliance. Data center supporters say it would cost billions of dollars and take years to redesign their facilities to comply with these rules, the article states.
There is not a set date for when PUC will consider the rules. ERCOT CEO Pablo Vegas said Tuesday the rules would help bring demand estimates in line with reality, helping data centers develop without jeopardizing the state’s power grid.
Some Texas politicians have veered from their typically business-friendly reputations in regard to data centers, with Lt. Gov. Dan Patrick saying in 2024 they have massive power demands but create few jobs.
Unusually warm weather and the rise of data centers and crypto miners are already pushing the power demanded of ERCOT’s grid to new heights. ERCOT expects demand could rise above 92 GW this summer, trumping the previous record of 85.5 GW set in August 2023.
Meanwhile, ERCOT is nowhere near being able to supply the 450 GW of power requested by data centers and other large loads. ERCOT officials previously said 228 GW of power could come online by 2032, but Vegas said Tuesday that estimate was “too high of a figure based on realistic expectations,” E&E News reported.
