Texas PUC: Data Centers Need Power Plants
Artificial Intelligence and data centers are guzzling electricity. Big technology companies have a naturally vested interest in building more of these centers, but if they want to build them next to power plants, they may have to build the power plant too. Thomas Gleeson, chairman of the Public Utility Commission of Texas, warned that construction of these data centers near existing plants threatens resource adequacy, and therefore grid reliability, if the centers were to purchase the plants’ power.
The solution? Big tech firms need to help invest in new power plants and generation. Gleeson and the PUC have told data center developers they will need to supply some of their own energy if they want to connect to ERCOT in the next fifteen months. “We have to look at really the co-location issue as being a new facility coming with its own new generation,” Gleeson said.
Gleeson welcomed the idea of “over-building,” i.e. building more generation than the data centers need, and selling the excess to the power grid. The issue presents an interesting opportunity for electricity grids and big technology firms. Companies like Amazon and Microsoft, two of the largest firms in the world, have already committed hundreds of millions of dollars on energy generation for planned data center campuses. With demand inevitably expected to grow, fuels such as natural gas will become vital, less as a temporary stopgap, and more as a destination fuel. After all, data center companies are in direct talks with pipeline companies, searching for solutions to growing energy demand.
