A single large data center in Texas can consume electricity equivalent to 50,000 homes and millions of gallons of water annually. Over 200 new data center projects are planned across the state, and demand is set to multiply significantly, according to the Texas Economic Development Corporation. ERCOT projects a 70% increase in peak electricity demand by 2030, largely due to this industrial growth, according to the ERCOT 2023 Long-Term System Assessment.

Texas aggressively attracts these data centers with promises of economic prosperity. This growth, however, places an unsustainable burden on its already fragile power grid and finite water supplies.

Texas appears to be trading immediate economic incentives for long-term environmental and infrastructural vulnerabilities, a path that could lead to future resource crises and increased costs for residents.

The Texas Data Center Boom: What We Know

  • Texas has approved over $1 billion in tax incentives for data centers since 2015, according to the Texas Comptroller's Office.
  • The state offers some of the lowest industrial electricity rates in the U.S. reports the EIA.
  • Land prices in rural Texas counties rose by 20-30% in areas targeted by data center developers, according to the Texas A&M Real Estate Center.
  • The state's population grew by 4 million people in the last decade, increasing residential demand alongside industrial needs, according to the U.S. Census Bureau.

Texas's combination of cheap land, energy, and aggressive incentives created a magnet for data center development. This fuels rapid expansion, positioning Texas as a global hub, yet the long-term costs of this accelerated growth remain largely unaddressed.

Straining the Grid and Draining the Aquifers

Texas's power grid nearly collapsed during Winter Storm Uri in 2021. The event exposed existing vulnerabilities to extreme demand and weather, according to a Public Utility Commission of Texas report. Now, the state faces its most severe drought in a decade, exacerbating water scarcity for agriculture and industrial use, reports the National Oceanic and Atmospheric Administration.