Texas Data Ranch

Last year in June I wrote about our most recent energy crisis, the one about AI versus AC. In this report I suggested that the increase in electricity requirements to energize new datacenters designed to support the AI revolution, may overwhelm our normal energy needs – like air-conditioning in the summer.

Think brown-outs.

I also wrote in September 2024 about the efforts and difficulties that our local electricity provider, CPS, has faced replacing old coal-fired plants that are obsolete and dirty the air. However, CPS has been prevented from starting up LNG plants, because LNG is on the no-can-do list of the prior administration and the EPA has San Antonio under restriction due to our poor air quality.

So, CPS is exploring building a new power station outside Bexar County.

Good thinking!

 

AI in Abilene

 

“Abilene, Abilene. Prettiest town I’ve ever seen” How does Abilene fit into the hottest topic of AI and energy production?

Well, you may recall in late January the new administration announced a $500-billion AI datacenter initiative, called Project Stargate. This is sponsored by top tech companies like OpenAI, Oracle and SoftBank, and they say that it will host 400,000 Nvidia AI chips in eight half-million square foot datacenter buildings producing 1.2 gigawatts of computing power.  Guess where? Yup. Abilene.

The project has actually been under construction for 3 years on an 800-acre ranch in northwest Abilene and is called Lancium.

Lancium, by the way, has access to the massive supply of energy from wind turbines, solar panels and batteries in West Texas. Texas is the largest producer of wind energy in the U.S. and second in solar, so there is no shortage of clean juice available.

 

Nuclear Energy eXperimental Testing Laboratory

 

Then, we move on to Abilene Christian University. You may be surprised to learn that ACU has a nuclear lab, NEXT Lab, “Nuclear Energy eXperimental Testing Laboratory.” They are developing a nuclear reactor and not just any old fashioned 3-Mile Island type. This is a Molten Salt Reactor (MSR). MSR’s are far safer, because it is not water-cooled and the risk of a hydrogen explosion, like Fukushima, is eliminated.

MSRs operate at higher temperatures, generating more electricity. It is still in the developmental stage for only 1 MWt, but as they improve the design, they will focus on scaling future versions to larger and more commercially useful sizes.

 

Datacenter Solutions to Power

 

In Karnes County an idea for a datacenter has been proposed that would tap directly into Eagle Ford-produced LNG to power their generators. Therefore, making them self-sufficient from utility providers who are strained with their other users’ requirements.

Other datacenter operators are looking into powering their own generators to avoid the limited supply from operators like, CPS.

More news on the nuke front.

Microsoft bought the rights to electricity from the remaining operational reactor at 3-Mile Island. One melted down in 1979 and the other was shut down five years ago because of cost factors. Microsoft is buying the electricity to power its own data enters.

Additionally, datacenter buildings have turned into datacenter farms, or ranches. I mentioned the 800-acre Lancium property in Abilene, and Phoenix has a 1000-acre campus under construction, but the largest is META’s (Facebook) 2,250-acre property near Monroe, Louisiana. Ten years ago, when Microsoft bought the Texas Research Park property of 150 acres, that was considered huge. Globally, datacenter development surged 51% in 2024 to $455-billion.

 

The Demand for More Electricity

 

Electricity usage in the U.S. has actually been flat with no growth for the past 20 years. Now with the datacenter boom and the anticipation of new manufacturing facilities from re-shoring, the demand for more electricity – including nuclear – is booming (no pun intended).

Other shuttered nuclear generators are being re-activated in Iowa and Illinois and San Antonio’s CPS energy bought a bigger share of the South Texas Nuclear Project from the Dallas based utility.

Texas’ ERCOT produces approximately 85 gigawatts of electricity at peak demand and, to their credit they have spurred more than 10 gigawatts of new generation capacity to come online since 2023, helping to reduce the chances of an outage, like we had in the winter storm in February 2021.

But ERCOT says that we need to continue to increase our output to over 110 gigawatts by 2030 to keep up with the demand. This will stretch the Permian output and every other resource we have. This nuclear option I mentioned will not be commercially available until after 2030, but may be the answer when we run out of fossil fuels in 100 years.

 

Wind Turbines

 

There are now over 11,000 wind turbines in Texas, the most of any state, producing more electricity than can be transported to other parts of Texas. And now going forward they will be built 800-feet tall to catch better wind currents.

Cons: they ugly up the Texas landscape, kill lots of birds, and only work when the wind blows so they require massive battery storage facilities.

Pros: they are saving lots of Texas rangers and ranchers who can’t make a go of it. You may not have oil under your feet but you have wind over your head.

God Blessed Texas!