Texas power grid issues 8 GW 'pass'! Bernstein: With power scarcity, miners like IREN (IREN.US) will become AI infrastructure landlords and 'collect rent'

According to English financial news outlet Zhihui Finance APP, the latest research by investment bank Bernstein indicates that approved electricity supply is becoming increasingly valuable, and the scarcity of base load sites will continue to drive up rental prices.

Texas grid operator ERCOT has completed its first “Batch Zero” screening, with emerging AI infrastructure developers disclosing a total of around 8 GW of conditional base load, and another approximately 7 GW listed as “studied load.”

ERCOT’s “Batch Zero”: A Grid Entry Ticket

ERCOT (Electric Reliability Council of Texas) Batch Zero is the first project queue allocated with available transmission capacity under a system-wide study framework. Projects are divided into three categories: base load—mature projects already in operation or supported by qualified preliminary studies, which will not undergo further assessment or capacity reallocation; studied load—subject to system-level analysis to determine approved capacity and timeline, with no guarantee of full allocation; and excluded projects—to await subsequent batches, with the first batch (Batch 1) applications expected to start in the summer of 2027.

ERCOT completed the first round of screening on September 3 and issued provisional classification notifications to transmission and distribution service providers (TDSPs), with the official verification report expected in December 2026. It is noteworthy that some projects saw a “downgrade” in the screening: certain projects initially declared as base load were reclassified as studied load, meaning the base load allocation fell short of previous expectations—Cipher Digital (CIFR.US) applied with a 3.6 GW site as a Batch Zero candidate but only received approval for a 1 GW incremental increase. These classifications are still conditional, pending requirements such as audits by Governor Abbott.

Who Got the “Entry Ticket”

AI cloud infrastructure provider IREN (IREN.US)’s Sweetwater campus was approved in the base load category with a full 2 GW, making it the single largest winner; Hut 8 (HUT.US) (not within coverage) received 1 GW for its Beacon Point campus, and Galaxy Digital’s Helios Phase I (800 MW) and Phase II (830 MW) also made the list. CIFR secured 1.1 GW base load (1 GW Colchis plus 100 MW Stingray), but another 2.1 GW (including 900 MW Apollo) was only classified as studied load. Core Scientific (CORZ)’s Hunt (431 MW) and Pecos (300 MW) were approved as base load; CleanSpark (CLSK.US) won base load for all its Texas projects—285 MW Sealy and 300 MW Brazoria; MARA (MARA.US)’s Granbury (about 280 MW) and Garden City (about 200 MW) were included, but its Matagorda site, totaling up to 2 GW, was classified as studied load.

Scarcity Drives Up Rental Prices

The report estimates that, within the 8 GW of base load allocations, over 5 GW can be contracted for new AI deployments, including IREN’s 2 GW campus and CIFR’s 1 GW Colchis. Against a backdrop of increasingly heated political scrutiny on new data center development, local moratoriums, and state-level directives creating bottlenecks, the value of approved capacity continues to rise.

Bernstein believes that the evolution of grid rules acts as a form of “streamlining,” pushing speculative queue applications out of the system, thereby increasing the value of sites with a real development track record. The allocation of studied load will not be finalized until at least April 2027, further reinforcing the competitive advantages of operators holding conditional base load capacity.

Turning to investment conclusions, Bernstein maintains its “Outperform” rating on Cipher Digital (CIFR.US), TeraWulf (WULF.US), IREN (IREN.US), Core Scientific (CORZ.US), CleanSpark (CLSK.US), and Riot (RIOT.US), with target prices of $32, $36, $100, $32, $35, and $24 respectively; MARA is rated as “Market Perform” with a price target of $17.

The report emphasizes that crypto miners, with approximately 32 GW planned power portfolios and the ability to deliver “warm start shells” rapidly, are best positioned to address the AI industry’s “time to power-on” bottleneck; over the past two years, miners have signed around 9 GW across more than 20 contracts, with a total value exceeding $180 billion, with hyperscale cloud providers, leading AI labs, new cloud providers, and AI chip manufacturers.

Unaffected by AI Slowdown

It is worth noting that the context for this report is not a calm market environment. On one hand, debates over a “cooling” of AI investments continue—from the “SaaS doomsday” narrative in the SaaS sector to questions about the sustainability of massive capital expenditures, investors are repeatedly questioning the true demand for AI.

However, Bernstein’s logic deliberately sidesteps this debate: regardless of who wins or loses on the models front, electricity supply remains the hardest constraint. This week, Amazon secured $340 million in warrants to lock in Generac backup power sources and previously struck a chip agreement with Qualcomm, all confirming the tech giants’ willingness to pay a premium for “access to power.”