Power grid instability is not uncommon in Texas, where increasingly hot weather, aging power plants, and challenges integrating renewable energy have left the grid vulnerable.
Now, the proliferation of energy-guzzling computer data centers has added a new element of risk this summer.
“How many are coming? It's still up in the air, but we know it's exponential,” ERCOT CEO Pablo Vegas told lawmakers during one of two hearings at the state Capitol this month.
Many of these centers are used to mine cryptocurrencies, Vegas said. But more and more are being built to support artificial intelligence systems. They're being drawn to the state by low energy costs, fewer regulations and a booming economy. But they Many Of energy.
“Just do a Google search and say, 'What is ERCOT?' If you do that with the regular Google system versus an AI Google search, it takes 10 to 30 times more power to run the AI search than it does to run a regular Google search,” Vegas said.
Many of the estimates you can find online seem to be near the low end of that range, but it's clear that growing energy demands could be a challenge, especially in Texas.
State officials have been working to shore up the power grid since the last major blackout in 2021. They have launched programs to subsidize new power plants and improve transmission lines.
But these facilities take years to build: Data centers, some of which consume as much energy as a small city, can be built in just months, posing serious challenges for grid operators, says Doug Lewin, publisher of the Texas Energy and Power newsletter.
“How do you build enough infrastructure to accommodate a new city that pops up within six months, virtually with no notice?” he asks.
The answer is: probably not.
Renee Dominguez
/
KUT News
“My biggest concern”
State officials have long declared Texas “open for business,” celebrating victories after luring companies like Tesla Inc.'s new Gigafactory and Samsung Inc.'s new microchip factory to the state.
But now some are wondering whether data centers are even worth it.
Cryptocurrency mining and data centers “create a tiny fraction of the jobs they create compared to the massive demand they place on the power grid,” Lt. Gov. Dan Patrick wrote on Twitter after the hearing. “Texans will ultimately pay the price.”
Similarly, state lawmakers at hearings this month raised questions about whether the state can put the brakes on data center expansion or force companies to pay for growing energy transmission needs.
“When you think about it, that's kind of amazing,” Lewin said. “It's a huge change from how we've done things in the past.”
Assuming crypto mining and data centers are here to stay, grid operators want new rules that allow them to better monitor and potentially control the facilities' energy use.
Despite recent legislation requiring crypto miners to register with ERCOT, Vegas told members of the House State Affairs Committee that roughly half of the companies have not yet done so.
“Regarding legislation […] “What would be more helpful to ERCOT would be to get a better idea of what these large packages are doing,” he said. “So a good place to start would be to start is being able to track and potentially control the packages.” [energy] A lot of cryptocurrency.”
At a recent ERCOT board meeting, Dan Woodfin, the group's vice president of system operations, said the inability to predict energy consumption from cryptomining and similar large-scale power guzzlers is his “most concerning” issue heading into the summer.
ERCOT estimates the likelihood of rolling blackouts in August is about 12 percent.
Demand exceeds supply
In the power industry, Vegas's proposal to reduce energy use by certain users at certain times is often referred to as a “demand-side” solution to the grid's challenges.
The idea is that by reducing energy consumption rather than increasing supply, we can strengthen the power grid more cheaply and quickly.
“We can't build out the grid fast enough to keep up with the demand … even before we start moving all the crypto and data centers to Texas,” Alison Silverstein, a consultant and former state and federal energy official, told KUT.
Texas currently uses more energy than any other state, and Silverstein has long been a vocal advocate of raising energy efficiency standards in the state to strengthen its energy system.
Improving efficiency standards in Texas would be a more economical way to strengthen the power grid by reducing high energy demands in the summer and winter, according to a recent study by the American Council for an Energy-Efficient Economy.
Silverstein said that not only will this mean people will need less electricity to cool their homes, run their appliances and do their jobs, but it will also go a long way in keeping the lights on.
But in Texas, a state known for producing energy rather than conserving it, lawmakers and regulators have traditionally balked at efficiency gains.
Silverstein says that may be changing as the challenges of rapidly growing energy demand become clearer to those in charge of Texas' power system.
At a recent hearing, ERCOT's Vegas said efficiency and demand response are essential tools to stabilize Texas' power grid.
Silverstein said the question is whether that rhetoric will translate into state policy.
“That's when you know they're really serious about demand-side solutions, not just talking,” she says.
