America’s energy crisis is bigger than data centers, Texas has the solution
By Lukas Hansen, CleanAI co-founder and CEO.
2026 has been the year of the energy shock. At its start, electricity prices in the United States were already soaring thanks to unprecedented demand. Geopolitical events have only supercharged this trend. Access to safe, resilient, and cost-effective energy sources may come to be a defining challenge of our age. Luckily, Texas has unlocked a solution to this critical problem.
After decades of flat growth in electricity demand, U.S. energy consumption is forecast by the international infrastructure consultancy ICF to rise by a shocking 25-percent by 2030, and 50-percent by 2040. In some hot spots, like Texas, energy officials estimate that electricity demand will triple by 2030. Meanwhile, aging electricity production and transmission infrastructure cannot keep up with demand and is at risk of failing, with many grid components being 40 to 70 years-old, according to the University of Wisconsin.
Consumers are being squeezed, accordingly.
Amidst this, data centers have become the public’s favorite scapegoat for the electricity problem. In response, public officials across the United States are introducing new rules and legislation aimed at curbing data center growth. Based on public information, 25 data centers were cancelled in 2025 after public pushback, a fourfold increase from the previous year.
Yet this rapid growth in electricity demand is being driven by more than AI. Cutting-edge manufacturing facilities and increasing cooling needs for businesses and homes are also playing a role in surging power demands. The inevitable rise of electric vehicles and a new era of geopolitical instability will exacerbate this trend. The 21st century will require more power than ever. Without urgent action, America’s economic future will be at risk.
No single solution will, by itself, be adequate to tackle the electricity crisis. This challenge demands an all-sources-on-deck approach that rapidly fields all available energy sources and distribution models. Instead, governments at all levels across the country are failing to address the challenge of rising electrical demand and insufficient supply. Some of their most-publicized efforts to address this challenge, such as by halting data center construction, are band-aid solutions, at best. Stifling economic activity by cancelling initiatives that drive innovation and the American economy only harms the public interest.
Fortunately, a proven model exists for rapidly increasing electrical supply, thereby enabling innovation and industrial activity while curbing electricity costs for consumers
The Energy Reliability Council of Texas, better-known by its acronym, ERCOT, is quickly pulling ahead in the race to power America’s future economy.
The Lone Star State is home to some of the nation’s most energy-intensive industries, including more data center projects than any other state. But instead of halting data center growth, as there are increasing calls to do in other data center hot spots such as Virginia, ERCOT is using rising demand to find innovative ways to reduce electricity costs while increasing supply for all Texans.
Unlike most states, which force industrial facility-builders to endure years of permitting processes and grid-connection waits, ERCOT’s streamlined “connect and manage” approach lets new facilities such as data centers power themselves with on-site electricity generation, while quickly connecting to the broader electrical grid in ways that do not burden other customers.
In addition to speed, this approach means these data centers can produce their own energy on-site during times of peak statewide energy demand, reducing or even eliminating their toll on the larger grid. During non-peak times, these data centers are able to buy excess energy, which keeps statewide power costs stable.
This system is technology-agnostic, allowing industrial site operators to choose the best power sources for them, as long as that source can be proven to alleviate a data center’s drain on the statewide grid. Solar, wind, natural gas, geothermal, and others are all on the table. What matters under “connect and manage” is the ability to meet demand quickly, safely, and reliably. The result is more power, more commerce, and lower electricity costs.
Given that ERCOT’s grid is contained within Texas alone, it was uniquely-suited for the rapid legislative innovation that led to the “connect and manage” model. It did not need to take neighboring states’ or federal regulations into account in the same way as the regional power systems which are the norm in the rest of the country do. But now that a successful blueprint for this approach has been fielded, federal, state, and local government officials elsewhere should urgently collaborate to identify ways to alleviate statutory, regulatory, and technical roadblocks to deploying “connect and manage” nationwide.
Texas’ decisive action in favor of innovation is a template that must be urgently replicated throughout the country in order for the United States to meet the energy challenges of the 21st century.
