The energy infrastructure in the United States is under significant threat as the country approaches winter, with fears of widespread power outages due to the increasing demands on the grid. Years of underinvestment and insufficient collaboration among utilities have left the system vulnerable to severe weather events. In particular, states such as Texas and California face annual challenges related to energy supply during winter storms and heatwaves.
The situation became critical during Storm Uri in February 2021, when plunging temperatures left millions in Texas without electricity, heat, or running water. The Federal Energy Regulatory Commission (FERC) reported that the extreme cold caused critical infrastructure to freeze. As demand for heating surged, the Electric Reliability Council of Texas (ERCOT) was forced to order rolling blackouts of 20 gigawatts (GW) to prevent a total grid failure, marking it as the “largest manually controlled load shedding event in U.S. history.” This left approximately 4.5 million people without power for several days.
The U.S. energy network is highly fragmented, with different state governments managing various parts of the grid. This fragmentation complicates efforts to enhance resilience across the entire system. For instance, investments in one state’s transmission lines may not be mirrored in neighboring states, leading to disparities in infrastructure reliability. Recognizing these challenges, the Biden administration introduced the $2 trillion Bipartisan Infrastructure Law, which allocated $100 billion to modernize the electric grid. Despite this effort, the U.S. energy infrastructure remains ill-prepared for severe weather.
As the potential for winter blackouts looms, an additional concern has emerged: the rapid expansion of data centres across the U.S. Driven by the tech industry’s demand for advanced computing capabilities, these centres have significantly increased energy consumption, particularly in Texas. Houston has gained a reputation as the “Silicon Valley of energy,” attracting considerable investments from technology companies due to its robust energy resources and business-friendly environment.
The North American Electric Reliability Corporation (NERC) issued a warning in November, stating that the continuous energy demand from data centres could hinder the ability to maintain sufficient electricity supply during peak times, especially during extreme cold spells. During severe winter storms, Texas’ electricity demand could peak at 85.3 GW. While the state’s installed capacity is 92.6 GW, it could drop to approximately 69.7 GW during such events, resulting in a potential shortfall of over 15 GW.
In a recent analysis, NERC indicated that “strong load growth from new data centres and other large industrial end users is driving higher winter electricity demand forecasts,” contributing to ongoing risks of supply shortfalls. Although the grid is expected to remain stable during normal peak demand, the combination of increased demand from data centres and possible extreme winter conditions raises concerns.
The situation is further complicated by the fact that over 120 GW of new projects have requested to connect to the Texas grid, reflecting a 170 percent increase since January. Approximately 73 percent of these projects are data centres. If all proposed centres are completed, they would consume enough power to serve nearly 154 million homes annually. Despite this ambitious project pipeline, experts caution that the energy supply may not be sufficient to accommodate all developments.
The combination of years of underinvestment, unpreparedness by utilities, and the escalating demand for data infrastructure creates a precarious scenario for the U.S. energy grid this winter. As the tech sector continues to reshape power demand patterns, there is an urgent need for policymakers to implement stronger regulations. Ensuring a stable and sufficient electricity supply will be crucial before approving new energy-intensive projects.
