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The Texas Advantage – The Energy Market

The Texas Advantage – The Energy Market

Choosing a data center location is a vital decision for all organizations. Data center markets offering competitive options, low hazard risk, tax incentives, and business friendly environments are highly attractive to companies with infrastructure requirements. These factors have led to increased demand in areas like Northern Virginia, Chicago and Silicon Valley. While data center markets in Texas (Dallas, Austin, Houston and San Antonio) have seen significant growth for many of the same reasons, the Texas market also attracts data center users because of its unique energy market.

TexasIndependent Power Grid
The largest differentiator for Texas is its own, independent power grid. The grid is managed by the Electric Reliability Council of Texas (ERCOT) and is completely contained inside the state. This grid independence allows it to be free from most government regulations and fees on interstate electricity sales, a benefit of being outside the Federal Power Act, which was established in 1920.

Deregulated Energy Sector
In 2002, Texas deregulated its energy industry and established ERCOT as the state’s power authority. Deregulation is advantageous to power consumers because it prevents unfair buyer and seller advantages and also provides grid reliability. Data center users in Texas benefit from a competitive market, often finding electricity costs lower than areas like Northern Virginia, Chicago or Silicon Valley. Deregulation also provides increased flexibility for users as it relates to their power provider, contract term and fuel generation mix.

Increasing Focus on Improvements
The state of Texas is the largest power consumer in the US, with over 71 GW of consumption at peak demand. If Texas was its own country, it would rank between Great Britain (62 GW) and France (92 GW) at peak demand. ERCOT has focused on improving the state’s power infrastructure and increasing renewable energy generation as demand has grown over the last several years. In 2016, over $2 billion worth of investments were made to the ERCOT ecosystem, which included overall improvements and new transmission lines. ERCOT is also investing in smarter metering systems, which will provide greater accuracy relating to power load analytics. Renewable energy generation is a continual for ERCOT, and Texas currently leads the US in wind energy generation, with turbines producing over 19,000 MW of power. As of June 2017, 787 MW of solar capacity were generated, with plans to install over 1,000 MW over the next year.

Other benefits we’ve seen are innovation of products. Users in ERCOT can select not just retailer, but a variety of features and contract structures that are possible (and encouraged) via a competitive market.

These improvements make Texas increasingly more sustainable.

While Texas features many of the benefits found in other major data center markets, the unique energy market distinctly benefits the state’s data center users. Organizations with infrastructure requirements in Texas can take advantage of the improving, independent power grid and flexibility it provides, all which have contributed to data center growth in areas like Dallas, Austin, Houston, and San Antonio.

About Stream Data Centers
Stream Data Centers is committed to improving the critical environments experience through exceptional people and service. Since 1999, Stream has been an active investor and industry leader, providing premium services, optimized value and scalable critical environments to the Fortune 500 and beyond. To date, Stream has acquired, developed and operated more than three million square feet of data center space in Texas, Minnesota, California and Colorado, representing more than 200 megawatts of power.

Stream develops and operates highly resilient, scalable and efficient data centers throughout North America, with products including fully-commissioned Hyperscale Data Centers, Private Data Center™ halls and suites, Scalable Colocation deployments, Ready-to-Fit™ Powered Shells, or Build-to-Suit data centers – all with immediate connection to network carriers and public cloud providers.

Stream services support critical environments, leveraging the combined skill sets and resources of technical real estate professionals with fine-tuned data center and energy management expertise, to deliver an end-to-end solution for all real estate and mission-critical infrastructure needs.

About Our Blog Contributor

Brian Frazier

Director, Energy Services
Brian draws upon his extensive experience in the energy sector to guide Stream customers through the complex nuances of commodity electricity procurement, demand response, discussions with regulated utilities and more. Read More