Data Centers in Midland
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Midland, Texas – Edge Hub for the Energy Sector
Midland is a focused edge market optimized for serving the demanding digital infrastructure needs of the energy sector in the Permian Basin. For companies requiring low-latency compute and data processing close to operations in West Texas, this market provides a strategic alternative to distant, primary hubs. Its favorable tax climate and access to a unique energy grid can deliver significant operational cost advantages.
Midland, Texas: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | A regional market with solid connectivity, but not a primary national interconnection hub. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Nearest on-ramp hubs are Dallas and Austin; private network extensions are available. |
| Power Cost | $0.07 - $0.09/kWh | Industrial rates benefit from a diverse grid with high wind and natural gas generation. |
| Disaster Risk | Moderate (43.46) – as of September 2025 | Primary risks are weather-related; avoids seismic and major coastal threats. |
| Tax Incentives | Yes | State-level sales and use tax exemptions are available for qualified data center projects. |
| Sales Tax | 6.25% (Texas State Rate) – as of September 2025 | Local taxes may apply, but exemptions can significantly lower the effective rate on equipment. |
Network & Connectivity Ecosystem
Carrier Density & Carrier Neutrality: As a focused edge market, Midland has a smaller carrier ecosystem than primary hubs like Dallas. The market is served by at least one carrier-neutral facility, providing access to regional and national network providers as of September 2025.
Direct Cloud On-Ramps: There are no direct, public cloud on-ramps within Midland. Businesses connect to major cloud providers like AWS, Google Cloud (GCP), and Microsoft Azure through private network links to data centers in Dallas or Austin.
Internet Exchange Points (IXPs): Midland does not host any public Internet Exchange Points. Peering is typically handled privately between carriers or routed through the major exchange points in Dallas to ensure efficient traffic exchange.
Bare Metal: Bare metal server options are available in the Midland market. Providers such as Hivelocity can deploy dedicated servers, offering powerful compute resources closer to energy sector operations in the Permian Basin.
Power Analysis
Average Cost Of Power: Industrial electricity rates in the Midland area typically range from $0.07 to $0.09/kWh as of September 2025. The Texas grid (ERCOT) features a high concentration of natural gas and wind generation, which helps keep power costs competitive and supports corporate sustainability goals with over 30% renewables.
Power Grid Reliability: The Texas power grid is engineered to support heavy industrial loads common in the region. Data centers in the market are built with multi-layered redundancy, including UPS systems and generator backup, to provide high levels of uptime and insulate operations from grid disturbances.
Market Access, Business & Tax Climate
Proximity To Key Business Districts: Midland data centers are strategically positioned to serve the Permian Basin, the epicentre of the U.S. oil and gas industry. This proximity offers low-latency connectivity essential for real-time data processing, IoT, and operational technology for energy companies.
Regional Market Reach: The market provides effective digital infrastructure coverage for West Texas and southeastern New Mexico. It serves as a critical edge location for content delivery and application performance to a geographic area not optimally served from Dallas or other major Texas cities.
Tax Advantage For Data Centers: Texas provides compelling tax incentives that directly reduce capital expenditures for data center operators and tenants. The state's sales and use tax exemption on computer equipment, software, and power infrastructure creates a significant financial advantage for new projects.
Natural Disaster Risk
Midland has a moderate natural disaster risk profile, with a FEMA National Risk Index score of 43.46 out of 100 as of September 2025. The location avoids major hurricane, flood, and seismic threats that affect other regions.
The primary environmental risks for data center operations include:
- Drought
- Heat Wave
- Hail
- Ice Storm
- Wildfire
- Winter Weather
