middle of the pack

Report: Texas has promising capacity for clean electricity, but still falls behind nationally

In Texas only 38 percent of the state’s electricity capacity comes from clean electricity. Photo via Getty Images

In a new report that looked at states with the cleanest electricity across the country, Texas seems to have some room for improvement.

According to the report from SmartAsset, Texas has the most clean energy capacity at 56,405 megawatts, but continues to trail states with similar geographic characteristics in overall clean energy prevalence.

Texas has the largest wind capacity to help generate clean energy with over three times more than Iowa, which is the second-biggest wind power producer. Clean electricity made up 57 percent of Iowa’s total energy capacity (22,546.4 megawatts).

However, in Texas only 38 percent of the state’s electricity capacity comes from clean electricity. Texas also has the second-largest solar capacity, which means Texas has the most means, space, and potential to accommodate cleaner electricity.

Texas as a whole, ranked No. 22 on the list for states with the most clean energy. Washington was No.1 and California, comparable in geographic size to Texas, came in at No. 11. California had 44.3 percent of its energy capacity being from clean energy.

SmartAsset compiled its study by comparing the amount of geothermal, solar, wind and nuclear operations as a percentage of a state’s full electricity production capacity. States were ranked based on the percentage of clean energy sources used to generate the total net summer electricity production capacity. According to the report, the 2022 data comes from the U.S. Energy Information Administration.

Last year, home service management platform Thumbtack ranked cities based upon solar panel installations. Texas fared better here, and the Lone Star State split up four Californian cities in the top five of that report.

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A View From HETI

Fervo Energy has closed financing to support the remaining construction costs for the first phase of Cape Station. Photo via fervoenergy.com

Houston geothermal unicorn Fervo Energy has closed $421 million in non-recourse debt financing for the first phase of its flagship Cape Station project in Beaver County, Utah.

Fervo believes Cape Station can meet the needs of surging power demand from data centers, domestic manufacturing and an energy market aiming to use clean and reliable power. According to the company, Cape Station will begin delivering its first power to the grid this year and is expected to reach approximately 100 megwatts of operating capacity by early 2027. Fervo added that it plans to scale to 500 megawatts.

The $421 million financing package includes a $309 million construction-to-term loan, a $61 million tax credit bridge loan, and a $51 million letter of credit facility. The facilities will fund the remaining construction costs for the first phase of Cape Station, and will also support the project’s counterparty credit support requirements.

Coordinating lead arrangers include Barclays, BBVA, HSBC, MUFG, RBC and Société Générale, with additional participation from Bank of America, J.P. Morgan and Sumitomo Mitsui Trust Bank, Limited, New York Branch.

“As demand for firm, clean, affordable power accelerates, EGS (Enhanced Geothermal Systems) is set to become a core energy asset class for infrastructure lenders,” Sean Pollock, managing director, project Finance at RBC Capital Markets, said in a news release. “Fervo is pioneering this step change with Cape Station, a vital contribution to American energy security that RBC is proud to support.”

The oversubscribed financing marks Cape Station’s shift from early-stage and bridge funding to a long-term, non-recourse capital structure, according to the news release.

“Non-recourse financing has historically been considered out of reach for first-of-a-kind projects,” David Ulrey, CFO of Fervo Energy, said in a news release. “Cape Station disrupts that narrative. With proven oil and gas technology paired with AI-enabled drilling and exploration, robust commercial offtake, operational consistency, and an unrelenting focus on health and safety, we have shown that EGS is a highly bankable asset class.”

Fervo continues to be one of the top-funded startups in the Houston area. The company has raised about $1.5 billion prior to the latest $421 million. It also closed a $462 million Series E in December.

According to Axios Pro, Fervo filed for an IPO that would value the company between $2 billion and $3 billion in January.

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