The Electric Reliability Council of Texas (ERCOT) voted Tuesday to streamline its process for data centers looking to connect to the power grid.
The vote comes as ERCOT is wading through a massive backlog of data centers and other large energy users — such as cryptocurrency miners and industrial facilities — looking to join the grid.
In the past, these so-called "large loads" would go to their local utility company and ask to join the power grid. However, with so many data centers looking to connect, that’s no longer feasible.
It’s hard to evaluate whether there’s enough transmission equipment — such as power lines and transformers — to connect a data center to the grid in a given area, when other nearby projects are constantly being proposed.
"That sequential evaluation of projects was growing untenable," said Bryan Clark, a partner at the global energy law firm Bracewell LLP's Dallas office.
Now, ERCOT is planning to evaluate data centers in batches, rather than individually. Its board voted to move forward with the first combined study of data centers, known as "Batch Zero," on Tuesday. The new process will now go to the Public Utility Commission of Texas for approval on June 18.
"Batch Zero is necessary as ERCOT intends to transition the large load interconnection process from an individual study-based approach to a batch study-based approach that allocates available transmission capacity for studied and committed large loads," ERCOT said in a statement toHouston Public Media.
The new process has drawn widespread interest from technology leaders looking to develop in Texas, who have provided hours of public comment to ERCOT.
"There's been a lot of time and effort by both ERCOT staff and stakeholders to solve an issue that is frankly critical for the Texas economy," Clark said.
In the first few months of this year, nearly 200 data centers and other large energy consumers requested to join the grid. They're seeking a combined 438 gigawatts of power in Texas — more than five times the amount of energy used to power the entire state during record-breaking demand. However, energy experts said that number is likely inflated by facilities that may never be built.
The new process for evaluating data centers aims to weed out more speculative projects that may never be built in Texas. While ERCOT is still workshopping its criteria for joining Batch Zero, those criteria could include factors such as whether a proposed data center project already has the land and financing to build.
"You're going to have a more predictable system in which projects that can and will be built will be connected to the grid on a more rational basis," Clark said.
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