Texas grid's 8-gigawatt "admission tickets" are all issued! Bernstein: Amid power scarcity, miners like IREN (IREN.US) will become AI infrastructure landlords collecting "rent"

Investment bank Bernstein's latest research points out that approved power is becoming increasingly valuable, and the scarcity of base load sites will continue to push up leasing prices. Texas grid operator ERCOT has completed its first "Batch Zero" screening, with emerging AI infrastructure developers collectively disclosing approximately 8 gigawatts of conditional base load classification, while another approximately 7 gigawatts were placed in "studied load." ERCOT's "Batch Zero": A Grid Admission Ticket ERCOT's (Electric Reliability Council of Texas) Batch Zero is the first queue of projects allocated available transmission capacity under a system-wide study framework. Projects are divided into three tiers: Base Load mature projects that are already operational or supported by qualified preliminary studies, no longer subject to further evaluation and capacity reallocation; Studied Load requires system-level analysis to determine approved capacity and timing, with no guarantee that the full declared capacity will be realized; Excluded Projects deferred to subsequent batches, with the first batch (Batch 1) applications expected to begin only in summer 2027. ERCOT completed its first round of screening on September 3 and issued interim classification notices to transmission and distribution service providers (TDSPs), with formal verification reports expected to be published in December 2026. Notably, the screening also "downgraded" a number of projects: some projects originally declared as base load were reclassified as studied load, meaning base load allocations fell short of prior expectations Cipher Digital (CIFR.US) declared 3.6 gigawatts of sites as Batch Zero candidates, but currently only received approval for 1 gigawatt of incremental capacity. These classifications remain conditional and must pass Governor Abbott's audit and other requirements. Who Got the "Admission Ticket" AI cloud infrastructure service provider IREN's (IREN.US) Sweetwater campus entered base load as a full 2-gigawatt campus, making it the largest single winner; Hut 8's (HUT.US) (not covered) 1-gigawatt Beacon Point campus, Galaxy Digital's Helios Phase I (800 megawatts) and Phase II (830 megawatts) were also all selected. CIFR received 1.1 gigawatts of base load (1 gigawatt Colchis plus 100 megawatts Stingray), but another 2.1 gigawatts (including 900 megawatts Apollo) only received studied load. Core Scientific's (CORZ) Hunt (431 megawatts) and Pecos (300 megawatts) were included in base load; CleanSpark's (CLSK.US) 285-megawatt Sealy and 300-megawatt Brazoria in Texas both received base load; MARA's (MARA.US) Granbury (approximately 280 megawatts) and Garden City (approximately 200 megawatts) were selected, but the massive 2-gigawatt Matagorda was classified as studied load. Scarcity Pushes Up Rent The report estimates that of the 8 gigawatts of base load classification, more than 5 gigawatts can be used for new AI deployment contracts, including IREN's 2-gigawatt campus and CIFR's 1-gigawatt Colchis. Against the backdrop of increasingly heated political scrutiny of new data center development, with moratoriums and state-level mandates constituting capacity bottlenecks, the value of already-approved capacity continues to rise. Bernstein believes that the evolution of grid rules is actually a form of "unclogging": squeezing speculative queue applications out of the line, making sites with genuine development track records more valuable. Studied load allocations will not be finalized until at least April 2027, further strengthening the competitive position of operators holding conditional base load. In terms of investment conclusions, Bernstein maintains "Outperform" ratings 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 "Market Perform" with a target price of $17. The report emphasizes that crypto miners, with approximately 32 gigawatts of planned power portfolio and the ability to deliver "warm shell power capacity" on time, are best positioned to address the AI industry's pain point of "time-to-compute"; over the past two years, miners have signed approximately 9 gigawatts, more than 20 deals, with a total value exceeding $180 billion in contracts with hyperscalers, frontier AI labs, neoclouds, and AI chip manufacturers. Unaffected by AI Slowdown It is worth noting that the market environment in which this report was released is not calm. On one hand, the debate over AI investment "cooling" continues to ferment from the "SaaS doomsday theory" in the SaaS sector to questions about the sustainability of massive capital expenditures, investors repeatedly question the real demand for AI. But Bernstein's logic precisely bypasses this debate: regardless of who wins or loses on the model side, power is the hardest constraint. This week, Amazon.com, Inc. locked in Generac backup power with a $340 million warrant, and its earlier chip agreement with Qualcomm, both confirm the willingness of tech giants to pay the price for "securing power."