Industry experts project Texas data center load growth could increase ERCOT system peak demand by up to 125%, straining regional transmission planning.
According to panellists speaking at a Datacloud USA keynote session on Texas data centre development, ERCOT’s initial “batch zero” study—now subject to a state-ordered audit—estimates approximately 205GW of that demand as credible. With ERCOT’s current peak demand at roughly 91GW, the batch zero estimate alone would represent a 125% increase if fully realised.
Texas Governor Greg Abbott ordered the audit in a letter to the Public Utility Commission of Texas (PUCT) and ERCOT on 3 August, directing a “comprehensive verification and audit” of data centre projects advancing through the interconnection process before any further approvals are granted. Non-compliant projects will be denied grid connection. Following the directive, ERCOT paused planned batch zero classification notifications. At a subsequent emergency meeting, PUCT officials confirmed the audit’s scope has been narrowed to between 250 and 300 projects, representing approximately 200GW of demand, rather than the full queue.
The panel also featured Texas State Senator Paul Bettencourt, Venkat Tirupati, vice president and chief technology officer at ERCOT, Alex Hernandez, founder and chief executive of PowerBridge, and Santiago Suinaga, senior vice president of cloud and hyperscale at Stream Data Centers.
Bettencourt described 2026 as the “frothiest political year” of his career, citing rising local opposition driven by concerns over power consumption, water usage, and land use. He noted that Texas hosts 335 data centres supporting approximately 100,000 direct jobs and 400,000 indirect jobs, generating an estimated $65bn in annual economic activity. However, he argued the industry has failed to effectively communicate its resource use and physical footprint to the public.
He highlighted that the state’s sales tax exemption for data centres, introduced between 2013 and 2015 at an estimated annual cost of $14.7m, now costs between $3.3bn and $3.4bn annually. Bettencourt suggested that electricity-related subsidies are likely to be scaled back or eliminated in the next legislative session. Additionally, Senate Bill 6, signed into law in 2025, already mandates that large loads of 75MW or more disclose their usage and comply with curtailment obligations during grid stress events.
Hernandez said PowerBridge, which he founded in 2025 after selling his previous venture, Cumulus Data, to Amazon Web Services in 2024, believes West Texas will become the world’s largest data centre market. Drawing a parallel to Pennsylvania, he noted that data centre capacity there grew from zero in 2020—when Cumulus began developing its Susquehanna nuclear-adjacent campus—to approximately 7.5GW today. He argued Texas is likely to follow a faster and larger growth trajectory. Under PowerBridge’s model, campuses will generate more power than they consume, with surplus capacity available for export via transmission to other parts of the state.
Suinaga said Stream Data Centers, which has operated in Texas for 27 years, remains “very bullish” on the state regardless of the audit’s outcome. He argued that legitimate developers will benefit once speculative projects are cleared from the interconnection queue. He also acknowledged that the industry has maintained a low public profile for years and must now do more to shape the narrative around its operational and environmental impact.
Finally, Tirupati said ERCOT is embedding AI across its own operations, including initiatives to accelerate interconnection study processes. More than 800 of the organisation’s roughly 1,000 employees are now active internal users of AI tools.