If you drive through West Texas toward Fort Stockton, you'll see a plot of land where Pacifico Energy wants to build a massive private power plant. The goal is to provide energy to AI data centers.
The flat terrain, dry climate and remote location make the area an ideal spot for a project of this scale. Most important is access to natural gas — and Pacifico isn't the only company that thinks so.
Chevron, ExxonMobil and Diamondback Energy have all announced plans to build gas-fired power plants for data centers in Texas.
It's estimated that by 2030, Texas could have more data centers than anywhere in the world. Many communities where data centers are planned are raising concerns and asking questions about their massive need for power.
Claire Hao is the energy and grid reporter for the Houston Chronicle, and she joined the Standard to discuss her recent reporting. Listen to the interview in the player above or read the transcript below.
This transcript has been edited lightly for clarity:
Texas Standard: This Pacifico project is in West Texas, but these private power plants will pop up all over the state. Where are we going to see them?
Claire Hao: These kind of private grid projects that are being built for data centers are going to be in West Texas. That's because a lot of these developers for these huge data center campuses think that natural gas is the best way to power these kind of complexes. And of course West Texas is very abundant in natural gas.
But we will see them scattered across the state, but mostly in West Texas.
ERCOT expects around 24 gigawatts for new data centers by 2031. Is there a good way to visualize just how much additional energy this is?
Yeah, and it's roughly like adding another Houston metro area to the state.
So the Houston metro area uses peak power demand, very roughly around 20 or so gigawatts. So that would be like the best approximation.
» RELATED: Why one expert says communities should draft a data center 'action plan'
That sounds huge. Well, it's worth mentioning these power plants are private and the energy they generate will be for AI data centers. But eventually the goal is to connect them to the statewide grid. Do we know when that will happen?
Yeah, so it's kind of like two separate phenomena.
So right now data centers, there's a rush to build data centers because tech companies are so eager to try to develop AI as quickly as possible. They view themselves as in a race against each other and a race against China.
So they're really just trying to get power to their data centers as quickly as possible. And so that's why they're doing these private grid projects — having these, like, power islands where they build power plants to directly power data centers because it takes too long to connect to the grid, essentially.
So all of the private grid data center projects aren't actually counted in that 24 gigawatts that ERCOT gave us. That's just the number or amount of data centers that ERCOT expects to actually connect to that grid.
But ultimately, most power plant developers and most data center developers do want to connect to the grid. They think that's like an added layer of reliability. It just kind of depends on like, you know, the wait, their place in line to connect to the grid…
They're going to try to get a lot of these data centers going to get up and running first with their own power plants. And then once ERCOT kind of processes this long backlog of data center applications it has so far, that's when they'll connect. So maybe in the next couple of years, 2030 and beyond.
In your story, you mentioned that Texas has a lead in this industry because we approve air pollution permits faster than any other state. How much faster?
Texas just permits everything quicker. So it's easier to build a power plant that pollutes. You can get air pollution permits quicker here. You can also get connected to the grid faster here.
For Texas, usually it's about three or so years if you get in line now and wait to connect to the grid. But in a state like Virginia, for example, it's seven years. And so there's like that distinction of like how quick can you get up and running.
So it's hard to say because especially now a lot of these power plant developers are kind of running into supply crunch just cause everybody is rushing to build these things. And so they're finding it harder to find the equipment.
But, generally, Texas just approves permits for building, permits for pollution faster than other places and that makes it easier to build this kind of large infrastructure project.
Do we know what the long-term environmental impact of these new power plants and data centers will be? Lots of communities are asking these questions now.
That's where you're starting to see some of this grassroots backlash to the data center boom.
You know, there are concerns about water usage for sure, especially in drought-prone areas of the state. Data center developers will say that, you know, they're developing more efficient and less water-intensive ways to cool their servers. But still, there is going to be an increase on the state's water supply at a time when the water supply is under strain.
There's also concerns about like all of these power plants that will be built — or could be built, I should say — to help the data center boom, these mostly natural gas power plants, they do have both climate-warming emissions as well as emissions that could harm the health of folks living nearby.
And so it really just depends on how much of this infrastructure really does get built out at the end of the day. But the concern is that, like, especially some of these private grid projects that are building a lot of new power plants, that nearby residents could bear some of that burden.
And even the data centers that aren't building their own power plants, that are just going to be directly grid-connected. Most of them use diesel generators for backup. And diesel generators can also draw complaints for being noisy and also can be highly polluting as well.
Is there anything else folks should know about this issue?
I would just say that Texans should know that we really have become like ground zero for this AI data center boom that we're seeing right now.
Texas is the fastest-growing market for data centers. There are several reports that we cited in our series about predicting that Texas could have more data centers than anywhere else in the world by 2030.
So right now, we are seeing this unprecedented influx of this infrastructure and a lot of our policy makers are paying attention. So if residents are concerned or have any thoughts on this, now is the time to kind of shape if we support these kinds of investments in our state.
