In the inaugural episode of the Data Center Counsel Podcast, Bracewell partners Jared Berg and Bryan Clark discuss the factors contributing to extended large-load interconnection timelines in Texas and the implications for data center development. They provide an overview of how the growing demand for electricity — particularly from the oil and gas sector — has affected transmission capacity, generation availability and interconnection queues within the ERCOT system.
Episode Highlights
[2:34] Texas Load Growth and Interconnection Delays: The episode opens with an overview of the Texas interconnection queue, where large-load projects now face timelines extending to 2029 or 2030. Jared frames the conversation by explaining why understanding the oil and gas industry’s electrification history is essential to understanding today’s data center challenges.
[3:48] The Permian Basin Electrification Story: Bryan walks through how hydraulic fracturing and horizontal drilling drove exponential electric demand in West Texas beginning in the early 2010s. As oil and gas producers shifted from diesel to electric-powered operations for cost and efficiency reasons, distribution and transmission constraints quickly became a bottleneck.
[6:15] Regulatory and Infrastructure Responses: The conversation turns to House Bill 5066 and the resulting PUCT-commissioned study that led to approval of new 745 kV transmission lines from Central and East Texas into the Permian Basin. While these projects promise long-term relief, Jared and Bryan emphasize that the extended construction timelines leave current developers searching for near-term solutions.
[9:06] Energy-Only Markets and the Generation Gap: Bryan explains how ERCOT’s energy-only market structure, combined with the growth of wind and solar generation, discouraged new dispatchable power development. This dynamic contributed to both congestion and reliability concerns, eventually prompting the creation of the Texas Energy Fund to incentivize new dispatchable generation.
[13:24] Data Centers Enter the Queue — and the Scramble for Power: Jared and Bryan connect the oil and gas experience to today’s data center boom, noting that massive new interconnection requests—many tied to prospective data center projects—are facing the same delays. Like oil and gas operators before them, data center developers are increasingly relying on mobile, modular and on-site generation as a bridge until permanent grid connections become available.
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The opinions expressed in this podcast are those of the speakers and do not necessarily reflect the viewpoint of their institutions or clients.
