The energy infrastructure in the United States is at risk of significant failures as it approaches another winter season. Years of underinvestment and lack of cooperation among utility companies have left the grid vulnerable to severe weather events. States like Texas and California have experienced frequent power outages during winter storms and extreme heatwaves, raising concerns about preparedness as winter approaches.
In February 2021, Storm Uri plunged Texas into a crisis, leaving millions without electricity, heat, or running water as vital infrastructure froze. The Federal Energy Regulatory Commission (FERC) reported that the storm triggered the “largest manually controlled load shedding event in U.S. history,” resulting in over 4.5 million people losing power for several days. The Texas grid operator, ERCOT, was forced to implement rolling blackouts, cutting off 20 gigawatts of power to prevent a total system collapse.
The U.S. energy network’s fragmented structure complicates the situation. Different state governments manage their sections of the grid, with multiple utilities responsible for various infrastructures. As a result, investments in one state do not necessarily translate to improvements in neighboring regions, leading to inconsistent resilience across the network.
In response to these challenges, the Biden administration launched the $2 trillion Bipartisan Infrastructure Law in 2021, allocating $100 billion specifically to modernize the electric grid. Despite this effort, obstacles remain that hinder a comprehensive overhaul of the energy infrastructure, leaving it unprepared for severe weather.
Adding to the existing strain on the energy grid is the surge in demand from new data centres. Over the past few years, tech companies have rapidly expanded their presence in the U.S., particularly in Texas. With a burgeoning reputation for energy production and a favorable business environment, Texas has attracted significant investment, positioning cities like Houston as hubs for energy innovation.
The North American Electric Reliability Corporation (NERC) issued a warning in November, indicating that the continuous demand from data centres could challenge the ability to maintain adequate electricity supplies during peak periods. During extreme winter weather, demand in Texas may surge to as much as 85.3 GW. While the state has an electricity capacity of 92.6 GW, this could drop to approximately 69.7 GW during severe weather, creating a potential deficit of over 15 GW.
NERC’s recent analysis highlighted that “strong load growth from new data centres and other large industrial end users is driving higher winter electricity demand forecasts.” Although the grid is expected to remain stable during normal peak demand, the risk of supply shortfalls during extreme conditions is on the rise.
There has been a dramatic increase in requests for new data centres in Texas, with over 120 GW of projects seeking connection to the grid, representing a 170 percent increase since January. Approximately 73 percent of these requests are for data centres. If all proposed projects are realized, they would consume power equivalent to the annual needs of almost 154 million homes.
Experts caution that not all proposed projects are likely to be developed due to insufficient power resources. The combination of years of underinvestment in the U.S. grid, insufficient utility preparedness, and the escalating demand from data centres could culminate in a significant power deficit during severe winter weather.
This situation underscores the urgent need for stronger regulations to ensure that electricity supply is both sufficient and stable before approving new energy-intensive projects. As the tech sector continues to reshape power demand, addressing these infrastructure challenges will be critical for safeguarding energy reliability in the United States.
