I spent last week meeting with clients in Houston and Dallas. A recurrent theme was load growth. And not the organic growth that has the L48 baseline crawling from 490 GW to 521 GW by 2036. The inorganic kind, heavily driven by data centers, many of which are shifting to behind-the-meter (BTM). Our ERCOT Batch Zero screen already shows the wedge, with 23 large-load projects heading behind the meter instead of waiting in the queue.
What’s driving the move? Time to connect, growing pressure to cover most or all of the connection costs. It’s a bit like cutting the cord with cable. At first it looked easier, and cheaper. But over time our family found ourselves “needing” Netflix, Prime (free delivery), Disney+ (kids), and even a cable (sports)… a stack of streaming logins that keep us connected to new partners and, still, the cable company.
The data center industry is living the same experience with power. The promise of BTM is simple. Bring your own power, and you can skip the queue, run more DC supply (and capture the 13% gains from NVIDIA’s MW block), and maybe save money. Some will end up truly islanded, self insuring their reliability. But many will keep a tie to the grid. It just will not be for the full load.
The logic is simple. Sizing the wire for full peak means demand charges on the whole load, a network build, and years in the queue. The on-site fleet carries the bulk energy and the rack battery covers the fast swings. The grid tie becomes the expensive insurance layer: useful for startup, maintenance, partial import, future resource integration, or curtailed-load backup, but not necessarily sized to carry the whole campus. So you self-supply the cheap part and rent the expensive part on a thin tie, sized well below peak. The wire size decouples from the operating size. That is the whole trick.
The real deals already look like this. Tallgrass is building its Cheyenne Power Hub to bring its own power to Crusoe’s Project Jade, up to 2.7 GW of dedicated on-site gas on its own pipeline. That is about as close to off-grid as a project gets, and it still designed a grid interconnection into the plan.
This is why FERC and ERCOT are not writing rules for islands. They are writing menus, from PJM’s Non-Firm Contract Demand tier to ERCOT’s controllable-load and bring-your-own-generation elections. The grid is learning to sell a partial connection, and the data centers are learning to buy one.
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