Voters are looking to vote for the person who not only acts tough during the campaign but also is trusted to stay strong when no one is paying attention.
open.substack.com/pub/energy…
Shanu Mathew (@ShanuMathew93)
Governor Abbott has ordered PUCT and ERCOT to audit data centers seeking grid interconnection, including who owns and finances them, whether they are paying for required infrastructure, how much grid power and water they will consume, and what they are doing to mitigate community impacts.
The immediate consequence = ERCOT has postponed the next stage of the Batch Zero process, which was due to begin on August 7, with no revised date yet. That creates uncertainty for projects whose power allocations and delivery schedules still depend on the study.
Some takes from SS and news seem too aggressive, though:
-Not a statewide moratorium on data center construction
-Does not stop already energized, approved or fully islanded projects
-Does not yet require every facility to provide its own power or water
Also very misleading to describe this as Abbott halting +474 GW of credible demand. That figure is the entire ERCOT large-load queue, including speculative and duplicative requests. More relevant figures are the roughly ~65 GW potentially mature enough for Base Load treatment (per MS) and the approximately 27 GW of Texas capacity (per MS; Aterio has ~15GW under construction and 90GW+ pipeline) that may ultimately be built. Thus, the right framing is ERCOT now has to separate credible, financed projects from queue positions that lack customers, capital or a realistic path to power (which is actually a good thing).
Some broader takeaways on future delivery
-Projects will take longer to move from land and queue position to energized capacity, even in TX! (all roads lead to TX)
-Developers will increasingly need to fund transmission, provide financial security and demonstrate credible tenants before receiving power (we already moving here)
-More campuses will pair data centers with behind-the-meter generation, batteries, demand response or phased grid connections (we already moving here)
+Strengthens the relative position of projects that already have approved interconnections, signed leases, financing and construction underway.
+/= For merchant power, the read-through may still be constructive as demand continues to be strong.
="All roads lead to Texas” still holds. Texas has the land, energy resources, market structure and development ecosystem required to absorb an outsized share of U.S. data center growth. The road is just becoming narrower, more expensive and more selective.
The ultimate build is likely still huge (and needs to be if the US wants to keep leading). The main changes will be how gets delivered, how it is powered and how far timelines move to the right. The August note reads more deliberate than the June note in my view (screenshots from both below), but shows that the political pressure and resistance is growing everywhere, even in the mighty state of TX.
— https://nitter.net/ShanuMathew93/status/2084592077464129592#m