Only a few weeks after Austin City Council passed a resolution requiring various regulations on artificial intelligence operations, a new 2GW data center is coming to Lockhart. Tract, a Colorado-based developer, has secured 1,500 acres for a “megasite” in Caldwell County, only about six miles away from famous barbecue joints Smitty’s Market, Kreuz Market, and Black’s. It has received enthusiastic support from Gov. Greg Abbott, who said in a statement that it will “create good-paying jobs, bolster the state’s power grid, and enhance our technology infrastructure.”
However, data centers threaten to have a detrimental effect on Texas’ energy infrastructure. Data centers, which operate 24/7 and provide computing power for cloud operations and AI, require cooling units, fans, and tons of water to operate. They account for almost 2 percent of overall global energy demand. Indeed, Texas energy demand is projected to nearly double by 2030, mostly thanks to data centers and cryptomining facilities, which account for about 50 percent of that expected demand.
As President Trump took office in January, he announced that Texas will be a cornerstone of his $500 billion Stargate initiative, with 10 data centers already under construction and 10 more planned. In a panel discussion on energy planning in April, Tom Oney, vice president of external affairs for the Lower Colorado River Authority, warned that data centers were a concern, saying: “The amount of load that’s coming to this area is something that we’re struggling with every day. ERCOT is putting out the alarm bell, and I think it’s right, because there’s not enough wires to move that kind of megawatts.”
To address the environmental effects of multiplying data centers in the Austin area, City Council’s resolution requires audits overseen by humans, and mandates an environmental study by Austin Energy, Austin Water, and the city climate and budget offices over the next decade. It also requires the utilities to report an assessment of the impact to utility rates and strains on resources and include recommendations on “ways to increase clean energy usage and water efficiency, address risks to the power grid, and minimize waste.”
In a press release, Tract writes that it has secured equipment from Bluebonnet Electric Cooperative for an initial 360MW of energy to begin in 2028. It has also committed to helping fund road improvements on FM 2720 as part of a community investment, according to Judge Hoppy Haden, who said it “shows they are invested in the future of Caldwell County.” Tract’s CEO Grant van Rooyen says the center will be used for cloud and AI training, but is “unique” for these kinds of operations because it “sits at the intersection of transmission infrastructure, robust natural gas infrastructure and long-haul fiber.”
The Texas Senate Business and Commerce Committee has recommended this session that data centers and other facilities that require large loads be required to “offset their impact on the grid by adding on-site power systems or participating in programs to curtail electricity usage during peak demand periods.” To that end, Senate Bill 6 by Sen. Phil King, R-Weatherford – which has already won Senate approval and is currently in the House Committee on State Affairs – would put restraints on the state’s energy market, with the goal of protecting residential customers from bearing the cost burden of another grid catastrophe, by putting in place more stringent restrictions on operations with significant demand.
Until SB 6 is passed, those commitments remain up to the discretion of companies like Tract, which states in its press release that the campus will come with “provisions for supplemental on-site generation.”
Photo by Aleksomber – Own work, CC BY-SA 4.0, Link.
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Lower Colorado River Authority: The quasi-governmental organization charged with, among other key items, regulating water policy for the Lower Colorado River--the body of water that runs through the heart of Austin. The creation of the organization in 1934--and the eventual series of dams it built--helped send electricity to portions of the Texas Hill Country.
Texas Legislature: The state’s legislative governing body composed of the House and Senate.
