Amid growing demand for data centers in the United States, the US Department of Energy (DOE) finalized a $3.26 billion loan to upgrade thousands of transmission lines across Texas to supply data centers.
DOE announced that it closed the loan with American Electric Power Texas on Wednesday, according to the Washington Examiner.
The $3.26 billion loan is expected to finance roughly 100 transmission projects across Texas, including the rebuilding or reconductoring of existing transmission lines, as well as the construction of new transmission infrastructure spanning 2,800 miles.
The Energy Department said these projects will double the power-carrying capacity of transmission infrastructure in Texas, helping meet rapidly growing electricity demand caused by data centers that power artificial intelligence technology, as well as increased manufacturing and oil and gas development in the Permian Basin, which is in the western part of the state.
Texas has found itself at the center of the AI boom, with at least 248 data center projects planned in the state, on top of the already 335 existing facilities, according to an analysis conducted by the Texas Tribune. These data center projects account for the overwhelming majority of new power requests in the state, with grid operator ERCOT saying in June that they account for 89%.
Amid this demand boom, Texas has seen a massive increase in natural gas-powered generation waiting to connect to the state’s grid. In May, the Texas Tribune reported that the volume of gas projects in Texas’ interconnection queue jumped by more than 400% from March 2023 to April of this year. A significant number of renewables are also waiting to connect to the grid, with the analysis finding that the number of wind projects in the interconnection queue increased by 87% over the same period.
Read the full story in the Washington Examiner.
