Texas is renowned for its ranching industry, but this oldest of American vocations is fast becoming entwined with icons of modern life: solar and wind farms. Among the cattle, Texas is also home to more than 15,300 wind turbines across 239 projects and 197 utility-scale solar farms.
“Solar and wind energy now frequently provide more than 45% of the state’s electricity needs,” says Dennis Wamsted of the Institute for Energy Economics and Financial Analysis.
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With such strong credentials in renewables, it is little wonder that proposals to build more than 100 new gas-fired power plants were met with furore among some. According to non-profit environmental group Environmental Integrity Project (EIP), as of April 2025, plans were afoot to build 108 new facilities and expand 17 others, adding as much as 58GW; there were also proposals, without specific detail, for five other projects.
In a June report, the EIP said many of the proposals included requests to access the Texas Energy Fund, which meant using state taxpayer dollars, adding further fuel to the fire. The group identified proposals such as the 930MW three gas‐turbine project near Corpus Christi; the 900MW two gas-turbine project west of Houston; and another 900MW facility to the south-west of the city.
Wamsted notes that how many of the proposals EIP identified will actually be built is left unanswered and believes Texas will continue to lead US renewables. However, “Texas is also the leading market for gas-based thermal power”, caveats Pavan Vyakaranam, energy analyst at Power Technology’s parent company GlobalData. According to GlobalData, Texas was home to 81.53GW of gas power capacity in 2024, far beyond runner-up Florida’s 54.96GW.
It is becoming increasingly likely that the state’s clean energy push may not go hand in hand with equal efforts to reduce thermal power as the energy transition requires – but why is Texas, alongside other US states and industrialised countries, looking at gas again?
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By GlobalDataTech needs gas
Data centres are increasingly in demand as AI and automation markets boom. In the US, data centre investments nearly quadrupled between 2019 and 2024, according to International Energy Agency (IEA).
Wamsted says it is clear that in Texas, data centre buildout is a strong driving force behind the projected increase in power demand placed on the Electric Reliability Council of Texas (ERCOT).
This is not just a problem for Texas. IEA data shows that globally, data centre electricity consumption is expected to more than double to around 945 terawatt-hours by 2030.
The Trump administration has pushed for data centre and energy co-expansion across US states through favourable conditions such as tax incentives. The latest state to signal its intent to bank on this opportunity was Pennsylvania, which secured investment in excess of $90bn from technology, energy and finance companies to become an AI hub backed by state and federal economic incentives.
Although many of the rumoured projects for this hub include clean energy, some are said to contain plans for new natural gas facilities, raising questions of which energy source is best suited to meet date centres’ needs.
In the US at least, with the Trump administration’s preference for hydrocarbons, gas power holds a significant advantage, says Vyakaranam. “In order to meet such a huge increase in demand [from data centres], there is a need for large capacity additions. With [Trump’s] pro-fossil fuel policies in place, it is both more economical and, from clearances perspective, easier to roll out gas-based projects than others like renewables.”
He also notes that gas power offers better grid stability with flexibility – able to be quickly started and stopped – and reliability – providing constant power generation to ensure continuous operations for data centres – in comparison to renewables. “Renewable power, due to its intermittent nature, cannot be a sole solution [for data centres] without any backup power or storage.”
However, Wamsted is dismissive of the notion that gas is absolutely needed, saying any rise in demand can be met reliably and economically by renewable sources in markets like Texas with significant renewable capacity. “[In Texas] the 24/7 power demand sought by data centres and other high load users can be supplied by the ERCOT system. Saying data centres require gas or nuclear since they are supposedly more reliable is misleading,” he argues.
Do renewables have the power over gas?
Wamsted notes that Texas’ growing renewables capacity meets much of the state’s needs even as demand on the ERCOT climbed by 31.3% between 2016 and 2024. “Texas actually is a prime example of how quickly we can transition grids from fossil fuels to renewable energy, even without state support,” he says.
In theory, Texas could prove it is possible to power the AI future with clean energy.
Many Texas-based data centres are already trialling this. In 2024, Sabey Data Center Properties completed the construction of a Tier III two-storey 19,875m² facility in Austin, with a commitment to operate on 100% renewable energy. Similarly, Equinix built a Tier IV facility in Dallas to be entirely powered on renewables. As recently as April 2025, Soluna Holdings’ said its 120MW South Texas data centre project, Project Hedy, will also be powered entirely by wind.
There are others outside of the US, notes Vyakaranam. Malaysia’s Bridge Data Centres is actively integrating 400MW of renewable energy into its operations, with a commitment to achieve carbon neutrality by 2040. The country’s AirTrunk Operating is also constructing a data centre with the capacity to generate up to 30MW of renewable energy.
Despite these noteworthy blueprints, however, it seems Malaysia will also go big on gas as it tries to reduce coal use, yet balance the economic benefit of a growing data centre industry with the power it needs. With projections that the country will see demand triple in the five years to 2027, it plans to add 6–8GW of gas-fired capacity by the beginning of the next decade, according to the CEO of state utility provider Tenaga Nasional Berhad, Megat Jalaluddin.
While the country also has a goal of doubling its renewable capacity by 2030, overall, the transition to clean energy is more a long-term goal than one to meet the urgent demands of data centres.
Meanwhile, Vyakaranam says the US renewables sector is facing major challenges under the current administration, with Texas being no exception. “Trump’s position is poised to result in a significant increase in the growth of gas-powered energy production and stagnation of the renewables market,” he says.
This approach has its own difficulties. The US, Malaysia and others looking at a gas power boom face stiff competition for gas components – thus, heftier price tags.
The substantial increase in the gas-based project pipeline has seen the lead time for gas turbines reach around 5–7 years, according to GlobalData, meaning equipment manufacturers have had to ramp up production as they contend with huge order backlogs. “Power generation companies, in order to secure turbine supplies, are engaging in aggressive procurement strategies such as making order requests years in advance, diversifying their supplier network, and coming up with different project designs and configurations to avoid any grid reliability shortfalls,” Vyakaranam notes.
These considerations threaten Texas’ new gas turbine plans as they “cannot be resolved quickly, if at all”, warns Wamsted, adding that engineering, procurement and construction companies have “limited capability to meet the rapid proposed buildout”.
“Both of these capacity problems are raising the cost of gas-fired generation, which could put a brake on planned additions,” he continues. “New gas pipelines will be needed for many of the planned expansion efforts, which will take time and have significant capital costs.”
Are Malaysia and Texas part of a bigger picture?
Vyakaranam believes that renewables alone cannot yet power the world through its AI revolution – instead, gas power has to be part of the mix. “Although there will be a continued push towards renewables and battery storage innovations, which will eventually help meet data centres’ demand,” he says, “gas and nuclear will have to do some of the heavy lifting in the meantime.”
Wamsted takes a different view: “I would say it is renewables that can quickly and affordably meet the US’ rising electricity needs, not gas, which may be sold out through 2030, or nuclear, which is unlikely to add significant new capacity before 2035 at earliest.”
He also cautions against relying on gas alone. “All generation systems require maintenance and have unforced outages during the year […] Relying on one resource – or worse, one facility – would be highly risky,” he says.
However, the same could be said about renewables, particularly given their reliance on weather conditions and without the support of energy storage.
With data centres – and everything they enable – now part of our world, it seems energy transition hopes are destined to do battle with our thirst for technology. With strong support and opposition for both renewables and gas power to support the AI boom, the reality is likely somewhere in between.
Therefore, perhaps Texas and Malaysia have got it right, in spite of the raised eyebrows their approaches elicit. With battery storage still lacking, new gas turbines backlogged and nuclear, at best, a long-term investment, the best way to meet the exponentially increasing demand from data centres may be for renewables and gas power to work together.
Of course, even this peculiar collaboration is not enough. To ensure a reliable and sustainable AI future, power capacity additions – regardless of energy source – will need to be paired with efforts to upgrade ageing grids, expand energy storage and decentralise energy systems as a whole, while tailoring energy solutions for each data centre to its local surroundings.
