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Texas leads US push to power data centers with gas

Texas leads US push to power data centers with gas

Houston, 2 July (Argus) — Texas is at the epicenter of a growing wave of gas-fired power plants proposed to serve artificial intelligence (AI) and data center projects, according to an environmental watchdog. At least 74 gas plants are planned nationwide to directly power data centers, and 32 of them, or 43pc, would be built in Texas, more than any other state, the Environmental Integrity Project (EIP) said in a report Wednesday. The projects could collectively emit 662mn tons of greenhouse gases annually, roughly equivalent to the annual emissions of Australia, while generating about 143GW of electricity, enough to power California nearly three times over, the group estimates. The plants are being proposed as technology companies race to secure electricity for artificial intelligence operations, which require vast amounts of computing power and around-the-clock energy supplies. Many developers are opting to build dedicated gas-fired generation alongside new data centers rather than rely on increasingly constrained power grids. Of the 74 plants EIP identified, 71 would be newly built and three would be expansions. Most of the projects identified are so-called "behind-the-meter" plants, meaning they are connected directly to data centers and primarily serve those facilities instead of supplying electricity to the broader grid. Developers say the approach can speed up project development and avoid competing with households and businesses for grid power, although critics argue the plants increase demand for natural gas and add significant emissions. "Fossil fuels should not power a technology of the future," the report said, arguing that additional data centers should instead rely on cleaner sources such as solar and wind power paired with battery storage. Many hyperscalers contend that renewables sources are still too variable to solely power their 24-7 operations. The Lone Star state has emerged as the leading destination for such projects because of its abundant natural gas production, extensive pipeline network, large tracts of available land and incentives designed to attract both data centers and power generation. Texas hosts 296 operating data centers, second only to Virginia, and faces more demand than the grid can currently handle. State grid operator, the Electric Reliability Council of Texas (ERCOT), has said that electricity demand in Texas could more than quadruple by 2032, nearly all of which would come from data centers. Several of the proposed Texas projects would be built in areas already struggling with air quality, EIP said. The report identified a planned power plant in San Antonio and another north of El Paso that would be located in regions that fail to meet federal ozone standards. Texans are increasingly taking a dim view of data centers as they begin to encroach on communities. A poll conducted recently by the University of Texas found that a majority oppose the construction of a data center in their community, while a number of municipalities and counties are taking steps to limit construction within their environs. State-level politicians are making note of the growing popular discontent as some face elections in November. Earlier this week, Governor Greg Abbott (R) said at a campaign stop in east Texas that the state should "prohibit" AI data centers from being built in rural Texas neighborhoods and repeated calls to eliminate tax breaks for the industry. By Jasmina Kelemen Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.