You have read about building your own microgrid in Your Survival Guy’s series on Putting Some Power Away in the Pantry, but it isn’t only individuals who can benefit by building up their resilience against grid outages. Businesses are increasingly going “off-grid.” Travis Fisher explains what’s happening in Texas at the Cato Institute, writing:
Texas is ground zero for today’s grid dilemma: Slow access to juice is starving economic growth, but aggressively changing the power grid could be costly and dangerous. Policymakers like Gov. Greg Abbott (R) are right to be about making big moves on the power grid. (See Texas Gov. Abbott Halts ERCOT Batch Studies Process.)
However, they can give developers of industrial projects — from data centers to manufacturing to mining — the “speed to power” they need while keeping the grid affordable and reliable for existing customers. All they have to do is remove barriers to private grids.
The regulated grid can’t keep up, so businesses are innovating. New grids that are privately financed and operated separately from the shared grid are a solution that has emerged organically. Large customers like hyperscalers (the largest-scale tier of data center operators) have figured out that, in some cases, building new electricity networks is the only way to get electric service fast enough to suit their ambitions.
The off-grid future is not only possible — it’s becoming mainstream. My team at the Cato Institute is tracking dozens of off-grid construction sites across the country, including in Ohio, West Virginia, New Mexico and Utah. A 200-MW off-grid data center owned by an affiliate of Meta recently came online in Ohio, marking the beginning of the off-grid era. That project, called Socrates, should be a wake-up call for critics who say powering data centers on a private grid is impossible.
Texas could lap the field in this new off-grid race for AI dominance. Amazon is the sole customer at the Gigawatt Ranch project, a massive off-grid facility under construction in Pecos, Texas. Microsoft is the sole customer at a site named Project Kilby, which also is in Pecos, a part of West Texas that offers ample land and low-cost energy. As one article summed it up, the approach taken with Project Kilby “allows companies like Microsoft to sidestep lengthy grid interconnection queues that have slowed other large projects.”
Let Developers Scale
Everything is bigger in Texas. Gigawatt Ranch isn’t just a clever name — the proposed 7.65 GW of planned on-site power would make it the largest private network in the United States and the largest single power plant. In fact, it would be approximately 1/12 the size of the Texas grid. For reference, peak demand in ERCOT is about 91 GW. In other words, a dozen Gigawatt Ranch-sized projects could match the size of the Texas grid.But Texas law prevents these super-grids from serving more than one customer at a time. Private networks could scale up significantly by welcoming new customers. Developers also could connect with other private networks, forming even larger independent grids. The bigger the independent grids, the lower their operating costs, the greater their reliability and the smaller the environmental impact per gigawatt served.
Under today’s rules, builders can’t form such grids without subjecting themselves to public utility regulation. And no business interested in speed wants to entangle itself in public utility regulation because the process would be bureaucratic, slow and subject to the whims of politicians. The simple language in this model bill would enable speed, scale and reliability while avoiding unnecessary oversight by state regulators.
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