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Texas Energy Nexus
Texas runs its own power grid, pumps oil and gas from the largest US oil-producing region, and is adding AI data centers, semiconductor fabs and gigafactories to that grid faster than it can connect them. The Electric Reliability Council of Texas (ERCOT) operates the Texas Interconnection as a grid separate from the Eastern and Western Interconnections. The Permian Basin feeds that grid, the Houston Ship Channel refineries and the Gulf Coast liquefied natural gas (LNG) export terminals. Nuclear plants at Comanche Peak and the South Texas Project supply baseload power, West Texas wind and Northeast Texas solar add renewable output, and Texas leads the US in grid-scale battery storage.
Grid, Interconnection and Policy
ERCOT serves about 90 percent of Texas electric load and sits outside Federal Energy Regulatory Commission (FERC) jurisdiction. Its large-load interconnection queue holds about 474 GW of requests, roughly 90 percent of them data centers, against a record peak demand near 91 GW. Senate Bill 6 (SB 6), the 2025 large-load law, lets ERCOT curtail grid-connected loads of 75 MW or more in an emergency. In August 2026 Governor Abbott froze new large-load connections pending an audit (see Texas Data Center Moratorium). The largest campuses respond by building their own power plants on site.
- ERCOT Energy Sovereignty: how ERCOT keeps the Texas Interconnection separate from the national grid, its four existing DC ties, and what independence from FERC means for AI load.
- ERCOT Large Load Interconnection: the 75 MW large-load threshold, the Batch Zero system-wide study approved by the Public Utility Commission of Texas (PUCT) in June 2026, SB 6 curtailment, and the August 2026 halt.
- Behind-the-Meter Power: on-site generation consumed directly by the facility, its connection configurations, and why Texas data centers, fabs and gigafactories now bring their own power.
- The JETI Act: the Jobs, Energy, Technology and Innovation Act, the property-tax incentive that replaced Chapter 313; it excludes data centers but covers the dispatchable gas or nuclear plants built to power them.
- Brownfield Inheritance: how new projects reuse the water rights, grid ties and zoning of retired industrial sites, including Sandow Lakes in Milam County, the Gibbons Creek coal plant in Grimes County, and the quarry under Giga Texas.
- Southern Spirit Transmission HVDC: Pattern Energy's $2.6 billion, 320-mile, 3,000 MW high-voltage direct current (HVDC) line linking ERCOT to Southeastern US grids, with construction expected to begin in 2026 and service in late 2029.
Nuclear
Two commercial nuclear plants supply about 5,000 MW of carbon-free baseload power to ERCOT. Vistra's Comanche Peak signed a 1,200 MW, 20-year power purchase agreement (PPA) in September 2025, and Amazon's $5 billion data center campus next to the plant became public in March 2026. Aalo Atomics in Austin builds factory-made reactors for data centers.
| Page | Operator | Location | Coverage |
|---|---|---|---|
| Comanche Peak Nuclear Power Plant | Vistra (Luminant) | Somervell County, southwest of Fort Worth | 2,400 MW, two pressurized water reactors licensed to 2050 and 2053; first ERCOT nuclear site planned for co-located data centers |
| South Texas Nuclear Station | STP Nuclear Operating Company for Constellation, CPS Energy and Austin Energy | Matagorda County, near Bay City | 2,645 MW, two Westinghouse pressurized water reactors; Austin Energy holds a 16 percent share |
| Aalo Atomics | Aalo Atomics | Austin headquarters; manufacturing planned in Georgetown | Factory-built modular reactors for AI data centers; the Aalo-X test reactor at Idaho National Laboratory reached criticality on July 4, 2026 |
Oil, Gas and Petrochemicals
The Permian Basin in West Texas is the largest oil-producing region in the US, and its natural gas now fuels behind-the-meter power plants for data centers as well as the Gulf Coast refineries and export terminals.
- Permian Basin Energy: oil and gas production around Midland and Odessa, and multi-gigawatt gas-fired data center projects such as Pacifico's GW Ranch and Chevron's planned 2.5 GW plant.
- Houston Ship Channel Petrochemical: more than 400 refining and petrochemical facilities in Harris County, holding about 25 percent of US refining capacity and supplying industrial gases and solvents to Texas chipmakers.
- Texas LNG Export Hub: Cheniere Corpus Christi, NextDecade Rio Grande LNG in Brownsville, Freeport LNG on Quintana Island, and the proposed Sempra Port Arthur LNG, with combined Texas capacity above 50 million tonnes per year.
Pipelines carry Permian and Eagle Ford crude, gas and natural gas liquids to the coast. The Port of Houston, the Port of Corpus Christi (the largest US crude oil export port) and the Port of Galveston ship the output; see Gulf Coast Nexus.
Renewables, Storage and Hydrogen
Texas leads the US in installed wind capacity at more than 42 GW and runs more than 25 GW of solar. The Competitive Renewable Energy Zone (CREZ) transmission lines, completed in 2014, carry West Texas wind to the metros. Texas entered 2026 with about 13.9 GW of grid-scale battery energy storage systems (BESS), nearly double the year before.
- Roscoe Wind Complex: RWE's 781.5 MW, four-farm complex across Nolan, Mitchell, Scurry and Fisher counties near Abilene, the largest wind farm in the world when it opened in 2009.
- Samson Solar Energy Center: Invenergy's 1,310 MW plant in Lamar, Red River and Franklin counties, selling power to AT&T, Google, Honda and Texas municipal utilities under long-term PPAs.
- Texas BESS Concentration: battery storage growth across ERCOT since Winter Storm Uri, the leading operators (ENGIE, Plus Power, Jupiter Power, Enel), and Brazoria County's share of new capacity.
- Rodeo Ranch Energy Storage: Plus Power's 300 MW / 600 MWh standalone battery near Pecos in Reeves County, the largest standalone BESS in ERCOT when it opened in December 2023.
- Tesla Megapack & Megablock at Brookshire: Tesla's third Megapack factory, in Waller County, building Megapack 3 and the Megablock with up to 40 GWh of annual output at full capacity.
- Texas Green Hydrogen Hub: the Department of Energy (DOE) HyVelocity Hub, Infinium's Project Roadrunner in Pecos, electrolyzer factories in Baytown and Houston, and research at the UT Austin Center for Electromechanics.
Water
Water limits Texas data centers and fabs because supply is fixed by rainfall, aquifers and river basins, while power can be added with new plants. Texas data centers used about 25 billion gallons of water a year as of January 2026, according to the Houston Advanced Research Center.
- Texas Water Supply & Stress: aquifers, river basins, regional water authorities, and the industrial demand from data centers, Samsung Taylor and the Terafab production fab in Grimes County.
- Water & Cooling in Large Facilities: how data centers cut water use with closed-loop and air cooling, and how fabs recycle ultrapure water.
Related Coverage
Texas AI & Hyperscalar Data Centers | The Texas Nexus | The Austin Supercluster | Austin Strategic CapEx Nexus | UT Austin Nexus