The national appetite for data centers is making its way to Houston, spurred by the city's energy industry.
ECL, a Mountain View, California-based startup that emerged from stealth last year, is looking for a site east of Houston for a new 1-gigawatt data center to be powered by hydrogen.
The project, which is named ECL TerraSite TX-1, will be the company's first in Texas and largest overall to date. It is expected to create 500 construction jobs and 250 operation jobs. The first phase will cost $450 million and is expected to be delivered next year. The project’s total cost is estimated to be around $8 billion, ECL said.
At least two customers — artificial intelligence cloud developer Lambda and digital infrastructure company Cato Digital — have been signed, CEO and founder Yuval Bachar told the Houston Business Journal.
“In Houston, there's a very significant amount of natural gas facilities that can actually process and deliver hydrogen to us," Bachar said. "The biggest motivation is hydrogen; the secondary motivation is that there's a vast amount of space in this area which is relatively easy to get access to.”
ECL is seeking a 600-acre site for its data center. The company currently is negotiating for a site east of Houston, with Bachar mentioning both Liberty and Jefferson counties as possible options.
Liberty County Judge Jay Knight told the HBJ that although no formal planning has been set, county officials have received an informal briefing on a data center project that could be located on the east side of the county.
While the project will be built outside of the city of Houston, Bachar said ECL plans to use 3D-printed concrete made in Houston to shape the components of the center. The data center will be made up of “blocks” with a capacity of 1 megawatt each — and the full center will be composed of 1,000 blocks. Bachar said this model helps ECL grow at the pace of its customers.
Bachar said that Air Liquide, Air Products and Linde are expected to be the hydrogen suppliers for the data center. Air Products told the HBJ on Sept. 25 that it had not made an announcement regarding the project, while Air Liquide said it does business with ECL in California but has no current plans in Texas. Linde did not respond to an HBJ request for comment before press time.
The hydrogen initially will be produced using a blend of blue and gray hydrogen, before transitioning to a blend of blue and green hydrogen. The colors of hydrogen are industry terms referring to the carbon intensity of hydrogen, with blue and green being less carbon-intensive than gray.
“We're not saying that [hydrogen] is the the panacea for all the problems that we have, but it's actually a good product for generating energy,” Bachar said. "And with the crisis of energy that we have on the grid, it's actually a very strong offset."
Relying on hydrogen for power means that the center will not be on a power grid, Bachar said. Both Liberty and Jefferson counties are outside the Electric Reliability Council of Texas service area, according to ERCOT load zone maps.
The project announcement follows another California-based company, Serverfarm, entering the Houston market by acquiring and developing two data centers near George Bush Intercontinental Airport (IAH) with a capacity of over 500 MW combined.
However, Texas Lt. Gov. Dan Patrick is one of several elected officials around the country raising questions about the economic impact data centers bring to states, especially considering the amount of power they need. Patrick directed interim legislative changes to the state Senate Business and Commerce Committee, asking legislators to evaluate whether Texas' grid can keep pace with factors such as population growth and “energy-intensive technologies.”
In response to Patrick, Bachar said alternative data centers could resolve some concerns that officials have about these projects.
“The one thing that we as a company decided is that we're not asking for anything from the government," Bachar said. "Traditional data centers sometimes will have a heavier burden on the state, so I understand where [Patrick] is coming from. But data centers are important for our everyday life. We're just asking to let us do our stuff, and in return it will bring jobs and promote your state."
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