Encinal Texas $22 B Power Campus: 345 kV Transformer Demand
Texas $22 B Power Campus: Engineering Logic Behind a 6.47 GW Gas Plant Supplying a 5 GW Data Centre
On 9 October 2026, a $22 billion integrated power and data-centre campus was announced for La Salle County, Texas, near the town of Encinal. The project pairs a 6.47 GW combined-cycle gas power plant with a 5 GW hyperscale data centre on a single site, with surplus electricity exported to the ERCOT grid through a 345 kV tie line. Developed by Related Companies and NextEra Energy Resources with backing from the US Department of Commerce and the Government of South Korea, the campus is scheduled to enter first-phase operation in 2029 and reach full capacity in 2032. For transformer manufacturers, GIS suppliers, and high-voltage cable vendors, the project represents one of the largest single-site 345 kV equipment opportunities in North America over the next five years.
1. Project context: the new North American load curve
1.1 The shift from oil-and-gas driven demand to AI-driven demand
Texas electricity demand grew at 1.5%-2% per year for most of the past decade, driven primarily by upstream oil and gas pumping load and residential cooling. From 2024 onward, the dominant incremental load has shifted to AI training clusters and hyperscale data centres. ERCOT’s interconnection queue now contains more than 100 GW of pending or under-study generation projects, equivalent to roughly 1.5 times the system’s existing peak load. The Encinal campus is one of the first to materialise this queue at gigawatt scale.
1.2 Why La Salle County
Encinal sits about 100 miles southwest of San Antonio in the heart of the Eagle Ford shale play. The site offers direct pipeline access to abundant natural gas, low land cost, and proximity to an existing 345 kV transmission corridor that reduces the greenfield transmission investment needed to export surplus power. These factors, combined with ERCOT’s energy-only market design that rewards flexible in-state generation, make the location unusually well suited to a behind-the-meter data centre campus.
1.3 Korean capital and policy support
For context on hyperscaler procurement, see our analysis of Hyosung’s $286 M AI data centre transformer order, which documents a comparable multi-hundred-million-dollar UHV transformer award.
2. The 6.47 GW combined-cycle power island
2.1 Block configuration and thermal performance
The 6.47 GW net output will be delivered by multiple F-class (approximately 500 MW each) gas turbine combined-cycle blocks, each configured in a 1×1 gas-turbine, three-pressure reheat heat-recovery-steam-generator, and steam-turbine arrangement. Net plant efficiency is expected in the 60%-62% range, with ramp rates suitable for following the data-centre load profile rather than serving purely as baseload.
2.2 Fuel security and gas storage
The plant will draw pipeline natural gas from the Eagle Ford production zone and will be paired with an underground gas storage facility sized to support 72 hours of full-load operation. The 72-hour target directly addresses the lessons of the February 2021 Uri winter storm, when ERCOT lost more than 40 GW of generation and the grid operator was minutes away from a controlled collapse.
2.3 Cooling water and produced-water reuse
The data centre uses a closed-loop water cooling system. The power island is being designed with a hybrid air-cooled plus auxiliary water-cooled configuration, with a study underway to treat and reuse oilfield produced water as make-up cooling water. The approach reduces freshwater withdrawal in an arid region while solving the produced-water disposal challenge that has long faced Eagle Ford operators.
| Parameter | Value | Notes |
|---|---|---|
| Net electrical output | 6.47 GW | Multiple F-class combined-cycle blocks |
| Net thermal efficiency | 60%-62% | 1×1 GT, three-pressure reheat HRSG |
| On-site gas storage | 72 hours | Designed for Uri-class winter events |
| Data-centre load | 5 GW | Behind-the-meter primary off-take |
| Surplus export | ~1.5 GW | Delivered to ERCOT 345 kV |
| First power | 2029 | First phase |
| Full output | 2032 | All blocks in service |
3. The 5 GW data centre and the behind-the-meter model
3.1 The power-coupling business case
Conventional hyperscale data centres purchase electricity from the local utility at wholesale market rates, exposing operations to significant price volatility and congestion risk. A behind-the-meter configuration locks in a long-term fixed price through a private wire PPA, with the generator and the data centre acting as a single economic entity. Industry estimates suggest this structure can reduce levelised data-centre power cost by 20%-30% over a 10-20 year horizon, while giving the generator a credit-worthy off-taker that simplifies project finance.
3.2 Cooling architecture and waste-heat recovery
A 5 GW IT load typically draws between 1.0 and 1.2 GW of auxiliary power for cooling. The Encinal design contemplates adsorption-chiller waste-heat recovery that, if executed, could displace 200-300 MW of mechanical chiller capacity. Engineering trade-offs include the high capital cost of adsorption equipment versus the operational savings, and the project’s current status remains at feasibility study.
3.3 345 kV ultra-high-voltage transformer demand
A 5 GW data centre, after stepping up from the medium-voltage IT distribution level, will require between eight and twelve 500-750 MVA main step-up transformers to reach 345 kV. Including N-1 redundancy and provisions for future expansion, the realised procurement volume may reach 15-20 units. This single project therefore consumes 20%-30% of the current US domestic 345 kV transformer annual production capacity, which is estimated at 60-80 units per year.
4. The 345 kV export tie-line
4.1 Capacity and routing
Approximately 1.5 GW of surplus output will be exported to the ERCOT South Zone through a double-circuit 345 kV overhead line, following an existing transmission corridor for a routing distance of 50-80 miles. Reusing the existing right-of-way substantially reduces permitting risk and construction time compared with greenfield routing.
4.2 Transformer and switchgear specification
Main step-up transformers are specified at 345/34.5 kV or 345/138 kV, two-winding design, with a 1050 kV BIL insulation level and a 63 kA short-circuit withstand. 345 kV GIS is selected in a single-break dead-tank configuration, with spring-operated mechanisms preferred to support the frequent switching duty associated with data-centre load-following.
4.3 Grid coordination and reactive support
For a broader industry perspective, see related industry perspective on winding wire selection for transformer modification, which examines conductor selection criteria relevant to large transformer design.
5. Employment, supply chain, and schedule
5.1 Construction workforce and the skills bottleneck
The campus is expected to create approximately 8,400 direct construction jobs over the build-out, with the peak workforce concentrated in 2028-2029. This peak coincides with several other US AI power projects, and analysts warn that the combined demand could amplify the existing US shortage of qualified electricians, pipefitters, and high-voltage commissioning technicians.
5.2 Long-term operation and local content
Long-term operation will support several hundred skilled positions covering plant operations, transformer condition monitoring, and HVAC maintenance. Local content opportunities include gas-supply contracts, potential local assembly of large power transformers, and produced-water treatment services.
5.3 Comparison with other large AI power projects
| Project | Investment | Power source | Data-centre load | Schedule | Status |
|---|---|---|---|---|---|
| Encinal campus | $22 B | 6.47 GW gas CCGT | 5 GW | 2029 / 2032 | Announced |
| Constellation-Google | $4.3 B | Mixed portfolio | 3.59 GW | 2027+ | Under construction |
| TenneT Germany HVDC | $3 B | Transmission | – | 2030+ | Financed |
| BC Hydro Burnaby | $0.2 B | Grid upgrade | – | 2028 | Under construction |
6. Implications for the transformer and power-equipment industry
6.1 Structural demand growth at 345 kV
US domestic 345 kV transformer production has historically served regulated utility customers with predictable, multi-year procurement cycles. The Encinal project, in combination with other hyperscaler-driven load growth, could push 345 kV transformer lead times from the current 80 weeks toward 150 weeks or more by 2028-2030. The bottleneck is most acute in large MVA ratings, where domestic winding, core cutting, and tank fabrication capacity is limited.
6.2 The role of Korean and European manufacturers
Korean OEMs have already secured references in US HVDC converter transformers and large generator step-up units. Project-level Korean government backing gives domestic Korean vendors a potential competitive advantage in transformer and GIS bidding, particularly where financing packages are bundled with equipment supply. European OEMs with strong US footprints, including Hitachi Energy and Siemens Energy, will remain the principal incumbents, but capacity constraints may force them to prioritise higher-margin orders.
6.3 The return of large gas-fired generation
The Encinal project is part of a broader 2026-2032 trend in which 30-50 GW of new large-scale gas-fired generation is expected to come online in the United States, almost entirely dedicated to data-centre load. The shift does not contradict the parallel renewables build-out; rather, it reflects the fact that hyperscale AI training workloads require 7×24 firm power that current storage durations cannot economically provide.
7. Conclusion
See also our 345 kV transformer analysis archive for related coverage on this trend.