SpaceX looks set to power its TeraFab semiconductor campus in Texas via on-site generation and battery storage, rather than seek a connection to the grid.

According to a tax-abatement agreement with Grimes County, the facility, when complete, is “expected to be powered by electricity generated by on-site power plant(s) and [is] not expected to use electricity from the grid.” The agreement has been fully executed.

The agreement said that the site is “expected to include semiconductor manufacturing facilities; natural gas-fired power plants, and artificial intelligence facilities to be used in conjunction with the manufacturing process.” In addition, the agreement directly referenced the construction of a battery storage facility to supplement power to the site. The capacity of the proposed facilities was not disclosed.

The company has also set out plans for the use of water and wastewater at the campus, with the agreement stating that it will use commercially reasonable efforts to control water use and promote water reuse, alongside the construction of an onsite wastewater-treatment facility.

Musk officially confirmed plans to build a semiconductor plant in Austin, Texas, in March 2026, with the site set to be adjacent to Tesla’s headquarters and run as a joint venture between the automaker and SpaceX.

Musk said the facility will produce chips for space data centers, advanced vehicles, and humanoid robots. In January, Musk said his team would aim for a nine-month production cycle for its semiconductors, three months less than the yearly cadence Nvidia and AMD work to when producing their AI accelerators. In April, Intel joined the project to support the fab’s development of chips at scale.

The facility would not be the first run by Elon Musk to deploy on-site generation. His xAI unit, now known as SpaceXAI, has deployed natural gas turbines across its data center portfolio, landing it in hot water with local communities who stressed the impact the polluting engines were having on their livelihoods.

In April, civil rights organization the NAACP made a complaint against xAI, and its subsidiary MZX Tech, alleging that 27 methane gas turbines that power the company’s Colossus 2 data center were being run illegally, in violation of the Clean Air Act.

Now the company has said it will remove 69 turbines from the site over the next year, ahead of the installation of a permanent 1.2GW power plant for the data centers, which received permitting approval in March. The company will begin removing the temporary turbines this month, though, as the permanent installation will apparently comprise 41 gas turbines, neighbors may not notice much difference.