‘A fundamental shift’: CenterPoint sees 700% increase in data centre interconnection request queue

CenterPoint Energy has experienced a 700% increase in its data centre interconnection request queue, which is now sitting at 8 gigawatts (GW), compared to before early summer this year, when the queue was at only 1 GW.

During the company’s quarterly earnings call, CenterPoint CEO Jason Wells said the company saw a “fundamental shift” in data center development over the summer. Although the data centre interconnection request queue rose by 7 GW, the company does not expect all 8 GW to be developed. Even post-Hurricane Beryl, Texas, remains an attractive option for data centre developers.

“And I think that really reflects the fact that as we talk to developers and hyperscalers, latency becomes less of an issue as it move more development to AI-driven data centres,” Wells said on the call. “Texas remains very attractive in terms of being able to build new transmission lines, new generation. Our interconnection timelines compare very favourably in a state that can move quickly with large infrastructure investments.”

Have you read?
Vegetable oil used as a backup data centre power source
Australian data centre project taps GE Vernova as BESS integrator

Given the overall load growth expected in the Greater Houston region, CenterPoint anticipates needing to build more transmission lines and substations in the coming years. Wells noted that the utility imports as much as 60% of its electricity on a given day to serve its customers.

CenterPoint is not alone: In the U.S., data center demand is expected to reach 35 GW by 2030, up from 17 GW in 2022, McKinsey & Company projects. Grid operators and utilities expect to see significant load growth driven by electrification, new manufacturing, and data centre development. According to EPRI, 15 states accounted for 80% of data center capacity in 2023, led by Virginia, Texas, California, Illinois, Oregon, and Arizona. That concentration creates economic opportunities for states hosting data centres, but could also stress the grid.

According to a recent EPRI white paper, electricity usage by hyperscalers more than doubled between 2017 and 2021. This increase is expected to continue, with data centres projected to consume 5% to 9% of U.S. electricity generation annually by 2030, up from 4% today.

FirstEnergy also recently noted that in its own footprint, load study requests of 500MW+ have more than tripled compared to 2023.

Earlier this week, EPRI announced the launch of a new initiative — DCFlex — meant to explore how data centers can support the electric grid, enable better asset utilization, improve interconnection, and support the clean energy transition. Led by EPRI, DCFlex will coordinate real-world demonstrations of flexibility in a variety of existing and planned data centers and electricity markets. The goal is to create reference architectures and provide shared learnings to enable broader adoption of flexible operations.

Specifically, DCFlex will establish five to ten flexibility hubs, demonstrating data centre and power supplier strategies that are meant to enable operational and deployment flexibility, streamline grid integration, and transition backup power solutions to grid assets. The group aims to improve data centre efficiency, facilitate data centre and utility coordination, and develop enhanced modeling tools for power grid planning. Demonstration deployment will begin in the first half of 2025, and testing could run through 2027.

Originally published by Sean Wolfe on power-grid.com