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Texas Law Gives Grid Operator Power To Disconnect Data Centers During Crisis

Utilities and energy system analysts expect exponential growth of data centers and other large loads in Texas over the next several years, with ERCOT forecasting 138 GW of large loads on its grid by 2030. This growth could threaten grid reliability, particularly during spring and fall months when thermal generators undergo planned maintenance. To mitigate this risk, data centers are expected to provide load flexibility, with up to 50% of ERCOT's data center capacity potentially offering emergency reliability support by 2030. The Public Utility Commission of Texas has been authorized to develop demand management programs to ensure large loads help rather than hinder reliability. A mandatory demand management program will apply to loads of 75 MW or greater, allowing utilities to disconnect eligible loads during firm load shed events. A voluntary program will also be implemented, which will be a competitively procured reliability service active during specific times of the year. The advance warning period for the voluntary program is key, especially for hyperscale data centers with sensitive IT equipment. The mandatory program is expected to alleviate stress on the ERCOT grid, but the success of the voluntary program is uncertain. Some data center operators have expressed openness to voluntarily curtailing their loads or switching to onsite backup generation when needed, while others have been more resistant. The provisions of Senate Bill 6, including a minimum initial interconnection fee and disclosure requirements, are expected to mitigate the issue of "phantom loads" and provide a more accurate picture of future load growth.
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Texas Law Gives Grid Operator Power To Disconnect Data Centers During Crisis
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