The Texas Department of Licensing and Registration has received more than $10 trillion in data center project permit applications over the past two months, as the state continues to position itself as a national leader in digital infrastructure development.
The surge in applications comes as Texas approved what developers are calling “the largest permitted power project in the country” this week—a 7.65 gigawatt facility known as GW Ranch in Pecos County, West Texas.
The facility, developed by Pacifico Energy, is designed to operate as a private electricity grid exclusively for hyperscale data centers and artificial intelligence operations, keeping the power load separate from the state’s main grid managed by the Electric Reliability Council of Texas.
The approval marks a significant milestone in Texas’ efforts to accommodate explosive demand for data center capacity while protecting residential and commercial electricity customers from potential price increases and grid instability.
Texas currently operates nearly 400 data centers across the state, but the recent wave of permit applications signals a massive expansion is underway. The $10 trillion in project requests submitted in just the past two months represents an unprecedented concentration of digital infrastructure investment in a single state.
Industry analysts attribute the growth to Texas’ business-friendly regulatory environment, relatively low electricity costs, abundant land availability and proximity to fiber optic networks connecting major U.S. cities.
The data center boom has been further accelerated by growing demand for artificial intelligence computing, cryptocurrency mining operations and cloud storage services that require massive amounts of electrical power and cooling capacity.
State officials have welcomed the economic development opportunities, but policymakers are also grappling with how to meet the electricity demands without compromising grid reliability for existing customers.
The explosive growth in data center projects has raised concerns about the capacity of the ERCOT grid, which serves most of Texas and has faced scrutiny following severe weather events that left millions without power in recent years.
Data centers consume enormous amounts of electricity—often equivalent to small cities—and operate continuously, creating sustained baseload demand that can strain grid resources during peak usage periods.
Texas residents have expressed anxiety about whether the grid can handle additional load, particularly during extreme heat or cold weather when demand from homes and businesses already pushes the system to its limits.
Nicol Turner Lee, director of the Center for Technology Innovation at the Brookings Institution, told Texas Standard that communities located near data centers have experienced rising electricity costs, which has generated local opposition to new facilities.
“We’re beginning to see some of the technology companies and the AI developers respond to this community resistance by having more conversations with electricity providers or energy providers, seeking out other sources of energy, like nuclear or renewable,” Turner Lee said.
The development of private power grids like GW Ranch represents one solution to the challenge, as these facilities generate their own electricity and do not draw power from the ERCOT system.
The GW Ranch project is structured as a self-contained power generation and data center campus, meaning the facility will produce all the electricity it needs on-site rather than purchasing power from the grid.
The 7.65 gigawatt capacity is sufficient to power several million homes, making it one of the largest private power generation facilities in the United States.
According to Pacifico Energy’s website, the project will feature “responsible data center development” that eliminates stress on the Texas power grid while supporting the state’s growing role as a technology hub.
Construction on the power generation and data center campus is expected to begin at the start of this year, with initial power delivery projected for early 2027. Depending on customer demand, the project could scale to full capacity by 2031.
Pacifico Energy estimates the project will employ thousands of workers during construction and hundreds in ongoing operations once the facility is fully operational.
The company has not disclosed which technology firms or data center operators have committed to leasing space at the facility, but industry sources suggest hyperscale cloud providers and artificial intelligence companies are the primary target customers.
While some data center developers have explored nuclear and renewable energy sources, the majority of new power generation projects in Texas are based on natural gas.
Dylan Baddour, reporting for Inside Climate News, described Texas as the “global epicenter of gas power buildout,” with more gas-fired power plants in development than any location except China, according to a recent report from Global Energy Monitor.
The reliance on natural gas-fired generation has drawn criticism from environmental groups, which warn that the buildout could significantly increase greenhouse gas emissions from the state.
Griffin Bird, a research analyst at the Environmental Integrity Project, told Inside Climate News that if all the gas power plants currently in development in North and West Texas are built, the region could become the largest emissions source in the world.
The GW Ranch facility alone has been authorized to emit up to 33 million tons per year of greenhouse gases—a figure that represents nearly 5 percent of Canada’s total annual greenhouse gas emissions.
Gabriel Collins, a researcher at Rice University’s Baker Institute for Public Policy, told Inside Climate News that the scale of permitted emissions does not necessarily mean the facility will operate at maximum capacity.
“It’s important to help people keep a sense of perspective on these,” Collins said. “Even if they built just a small fraction of what that permit says, it’d still be a tremendous facility.”
Power plant developers typically seek permits for maximum potential capacity, but actual operations are often scaled based on customer demand and market conditions.
Environmental groups have called for greater scrutiny of air quality permits for large-scale gas power projects, arguing that state regulators should require more comprehensive emissions controls and consider cumulative environmental impacts across multiple facilities.
The Texas Commission on Environmental Quality, which issued the air permit for GW Ranch, has not responded to requests for comment on the environmental review process for the project.
State economic development officials have emphasized the job creation and investment benefits of data center growth, noting that the facilities bring high-paying construction jobs and ongoing technical employment opportunities.
The GW Ranch project is expected to generate billions of dollars in construction spending and create permanent jobs in power plant operations, facility maintenance and data center management.
Pecos County, where the facility is located, is a sparsely populated region in West Texas known primarily for oil and gas production. Local officials have welcomed the project as a source of tax revenue and economic diversification.
However, some rural communities have expressed concerns about the infrastructure demands and environmental impacts of large-scale industrial facilities, particularly water consumption for cooling systems in regions where water resources are limited.
Texas is competing with other states, including Virginia, North Carolina and Arizona, to attract data center investment as technology companies expand their infrastructure to support artificial intelligence and cloud computing services.
Virginia currently leads the nation in data center capacity, but Texas has rapidly closed the gap through aggressive business recruitment and streamlined permitting processes.
The state’s lack of a corporate income tax, abundant energy resources and central geographic location make it an attractive destination for companies seeking to build redundant data center facilities across multiple regions.
Industry analysts expect Texas to continue to see significant data center investment over the next decade, particularly if private power generation models prove successful in addressing grid capacity concerns.
