Skip to content
Welcome, thoughtbot's Giant Robots listeners!Start here
Data Centres: Boom and Backlash
25JUL

Abbott halts Texas data centre permits

2 min read
11:23UTC

Governor Greg Abbott told Texas's environmental regulator on 21 September to stop issuing any permit tied to a data centre, new or pending, until two state audits of power and water report.

IndustryAssessed
Key takeaway

Texas moved its data-centre gate from the grid queue to the environmental permit desk.

Governor Greg Abbott told the Texas Commission on Environmental Quality, or TCEQ (the state's environmental regulator), on 21 September to "pause the issuance of all permits related to data center projects"⁠1. The order covers new and pending permits alike. It runs until projects "pay their own way, protect our grid and water", and until two state audits of power and water are complete. TCEQ has until 19 October to report that it has complied.

The Electric Reliability Council of Texas, or ERCOT (which runs most of the state's grid), holds a large-load queue of 438 GW (gigawatts), about 90% of it data centres. Texas's peak demand is about 85 GW, so the queue stands at roughly five times what the grid carries on its busiest day.

Abbott ordered the power audit on 3 August, covering every queued project, and ERCOT suspended its own sorting of the queue the same day. In mid-September ERCOT sent a questionnaire of about 130 questions to more than 400 projects, covering subsidies, self-supplied power, water, community impact and ownership, KERA News reported⁠2. Answers are due in mid-October, and final results are targeted for 10 December. The Texas Water Development Board runs the water audit.

ERCOT's queue grew under rules that made joining it cheap. Abbott's freeze acts at the permitting agency instead, so it also binds developers who planned their own gas turbines and diesel generators, which need air permits, and never entered the queue at all. Abbott has not refused any permit: a project that clears both audits can resume.

Deep Analysis

In plain English

Texas has 438 gigawatts of proposed capacity waiting in its grid connection queue, and about 90% of it is data centres. Governor Abbott has told the state's environmental regulator to stop approving new ones, and to stop moving pending ones forward, until developers show they can pay their fair share of grid and water costs, the grid is protected, and two ordered audits report back. This does not shut anything down permanently: TCEQ can lift the pause once the two audits report. But given the scale of that queue, a pause in Texas can slow the whole industry's building plans until the rules are clearer.

Deep Analysis
Root Causes

Texas's interconnection process historically required only a modest deposit to enter ERCOT's queue, with no requirement to prove committed financing or firm demand before reserving a slot.

That structure let developers stack far more proposed load onto the queue than the grid, or the state's water and land, could plausibly serve, and gave TCEQ no mechanism to test a project's viability at the permit stage, since TCEQ's environmental permits are issued independently of ERCOT's separate interconnection process.

The pause forces those two separate processes together for the first time: a project cannot now clear environmental permitting without also demonstrating it can pay its way onto the grid, closing the gap that let purely speculative reservations sit alongside financed campuses in the same queue.

What could happen next?
  • Precedent

    Texas pairing environmental permitting with grid-cost and water conditions gives other US states a template for closing the same gap between separate permitting and interconnection processes.

  • Risk

    A prolonged pause could push financed, ready-to-build projects toward states with faster permitting, shifting investment rather than resolving the underlying queue-capacity gap.

First Reported In

Update #15 · Texas freezes data-centre permits

Office of the Texas Governor· 24 Sept 2026
Read original →
Causes and effects
This Event
Abbott halts Texas data centre permits
The order reaches developers planning their own gas turbines and diesel generators, which need state air permits, as well as those waiting in the grid queue.
Different Perspectives
Mohsen Rezaei
Mohsen Rezaei
The senior Iranian security official and former IRGC commander told Press TV that US-linked technology infrastructure in the region could become a target if war resumes. He named the UAE and valued the assets at more than US$2 trillion, without a breakdown.
Mykhailo Shelemba
Mykhailo Shelemba
Datagroup's chief executive says the Kyiv data centre hit on the night of 18 to 19 October is beyond repair. Services continue from backup sites, and no staff were hurt.
Kristen Umstattd
Kristen Umstattd
The Loudoun supervisor voted against fast-tracking Amazon's rezoning of the Ashburn campus. She said there were no figures yet on homes, school or road costs.
Akishima residents' litigation group
Akishima residents' litigation group
The group formed on 18 October and plans to sue Nihon GLP by year-end to stop eight data-centre buildings. Its lawyers will argue rights to life, health, clean water and a natural environment after mediation failed in August.
Óscar López
Óscar López
Spain's Digital Transformation minister said on 22 October he could not confirm when the data-centre decree will be approved. He added that Google has always committed to investing in Spain.
Google
Google
Google said it would comply with LVV's order to stop preparatory works at Muhos and Kajaani until environmental assessments finish. A spokesperson conceded the company had fallen short.

Written with AI from Lowdown's published reporting. Not individually reviewed by an editor. Editorial standards.