The landscape of data center construction has undergone significant changes in recent months, with power availability becoming the primary factor influencing site selection, according to industry expert Joshi. “The grid can’t keep pace with AI demands, so the industry is taking control with onsite power generation,” he noted.
Soluna, following the trend among data center developers focused on sustainable energy, purchases surplus electricity generated from wind, hydro, and solar facilities that cannot be integrated into the grid. By the end of this year, the company plans to operate three facilities in Kentucky and Texas, collectively offering 123 megawatts of capacity, along with an additional seven projects in the pipeline that are expected to yield over 800 megawatts.
During a discussion in Texas, where significant amounts of renewable energy remain untapped, Belizaire highlighted the issue of curtailed power from wind and solar farms stemming from limitations in transmission infrastructure. In regions like West Texas, data center operators are increasingly co-locating their facilities with excess wind energy, capitalizing on this unused resource far from major urban centers such as Dallas and Houston.
One such operator is IREN, which specifically focuses on optimizing power for Bitcoin mining and AI applications. This company has established a substantial 7.5-gigawatt facility in Childress and has initiated work on a 1.4-gigawatt data center in Sweetwater.
Kent Draper, IREN’s chief commercial officer, explained that the firm acquires power from the state grid’s wholesale market during surplus conditions and decreases usage when electricity prices soar. This is possible thanks to their capability to shut down their systems and lower the power demand of their data centers during peak pricing periods.
The issue of power curtailment is not isolated to Texas; Belizaire pointed out that similar challenges are present globally, including states such as Oklahoma, North Dakota, South Dakota, as well as regions in Northern Ireland, Germany, Portugal, and Australia.
A March report from the US Energy Information Administration observed a notable rise in solar and wind energy curtailment in California. In 2024, the state’s grid operator curtailed 3.4 million megawatt-hours of utility-scale wind and solar power, reflecting a 29 percent increase compared to the previous year.
