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Panel: Experts weigh in on what's holding hydrogen development back​ in Houston and beyond

hiccups in hydrogen

It's all about the money — or lack thereof. Photo by Natalie Harms/EnergyCapital

Houston has a ton of potential to be a major hub for hydrogen — but who's to pick up the tab on the progress that is needed to advance the alternative energy source? A panel at a recent event sat down to talk it out.

The Hydrogen Technology Expo, a two-day conference at NRG Center last week, brought in dozens of companies and hundreds of attendees to Houston to discuss the most pressing topics of the energy transition. One panel — moderated by Brett Perlman, CEO of the Center for Houston's Future — looked specifically at the challenges for the hydrogen economy.

The biggest challenge: Money. Perlman starts the conversation asking panelists if Wall Street is showing up to back hydrogen projects.

"Everyone talks about investing in hydrogen, and very few people actually do it," says Sean Shafer, managing partner of Energy and Industrial Advisor Partners, "outside of the big strategics and some technology plays — electrolyzers, fuel cells, and stuff like that."

Timing is an issue, adds Brian Hodges, partner at Aurum Capital Connect. Hodges, who previously was at Bank of America, saw first hand the money that a bank was willing to put into clean energy and decarbonization. But, when presenting options to deploy this funding, Hodges hears a familiar refrain — it's too early, it's too small, the pieces aren't in place yet.

"There is a gigantic pool of capital out there — whether its traditional banks, financial institutions, sovereign wealth funds," he says. "Literally everyone and their dog is interested in the space. ... We're right on the cusp of this, but when you look at Europe, they're 10 years ahead of us."

And that decade of experience is what attracts more funding, Hodges says. And it's not just Europe when it comes to markets getting ahead. Texas can't compete with the likes of California, says Roxana Bekemohammadi, founder and executive director of US Hydrogen Alliance, especially when it comes to policy. The state has had legislation addressing zero-emission vehicles since 1989.

"California policies are unique beasts, and I like to explain this because it's really important when I talk to other state legislators," Bekemohammadi says, explaining that the state mandates action and has larger teams to put policy into place. "You're looking at such a mature industry, if you want to call it an industry, but it's really a policy institution."

The panelists agree on the obstacle of policy. Tanya Peacock, managing director of EcoEngineers, works directly with project developers looking for financing and investment funds and financiers looking for projects.

"Everybody is waiting for the guidance on the IRA 45V Production Tax Credit," she says. "I think that's really the game changer for the industry, but the uncertainty around how the credit is going to be implemented is what's holding back a lot of the investment at the moment."

Texas doesn't have state incentives, Shafer points out, but the work is easy to get done with the workforce in the region, so that's also a missed opportunity. Some other factors, he adds, include offtake and lack of debt providers. He says the demand hasn't been established yet to provide a good opportunity for offtake negotiations — it's a chicken and egg problem. Meanwhile, project finance tends to have a debt provider involved, but there aren't providers willing to underwrite debt hydrogen projects.

"One of the other big things is there seems to be a lack of middle capital to get smaller companies to get their projects more backed," Shafer continues his list. "People want to write the big checks. They don't want to write the small checks — and I think one of the reasons is they don't want to lose all their capital. There's no downside protection in this industry."

Perlman, who addressed the crowd in a presentation about Texas as a hydrogen hub earlier in the day, remains bullish on the city's future in the space. Last year, CHF and several other organizations worked together to create the plan for the HyVelocity Hub — and a pitch to receive U.S. Department of Energy Regional Clean Hydrogen Hub funding to make it a reality.

"What we want to do in Texas is jumpstart the market," Perlman says, adding that HyVelocity can help accomplish this goal. "This market can happen in Texas because we are the right place with the right resources. ... What we need to do as an industry is accelerate development."

These organizations are teaming up to advance development of a regional clean industrial hub. Photo by Katya Horner

Houston organizations announce new partner, plans for clean industrial hub

seeing green

Two Houston organizations that are on a mission to make Houston a leader in the energy transition have announced new plans for a hub focused on decarbonization.

The Houston Energy Transition Initiative and the Center for Houston’s Future have teamed up with the Mission Possible Partnership, with support from the Bezos Earth Fund, to lead the city of Houston through the accelerated development of a regional clean industrial hub geared at decarbonization of the industrial sector, including petrochemicals, cement plants, heavy transportation, and more.

The two-year project is focused on development and deployment of clean energy projects — such as "low-carbon hydrogen, carbon capture, use and storage, electrification of industrial processes, and the production and use of low carbon fuels," according to a press release.

“There is no geography in the world better positioned to support the transition to and integration of abundant, low-carbon energy solutions than Houston," says Jane Stricker, executive director and senior vice president of HETI, in the release. "As the Energy Transition Capital of the World, Houston is leveraging its energy leadership to accelerate global solutions for a low-carbon future. This partnership with MPP is a critical component in the region’s efforts to develop and deploy technologies, policies and strategies for broad decarbonization."

MPP, a nonprofit alliance of climate leaders launched in 2020 focused on energizing decarbonization, is supported by RMI, the Bezos Earth Fund, the Energy Transition Commission, World Economic Forum, and We Mean Business.

“The Center for Houston’s Future has been leading HETI’s clean hydrogen initiative with the goal of making Houston a global clean hydrogen leader," says Brett Perlman, CEO of the Center for Houston’s Future. "We’re now pleased to work with Mission Possible Project and leverage the MPP team’s deep subject matter expertise in clean hydrogen and experience in creating hydrogen ecosystems."

In October, HETI released a report calling for the region to aim for $150 billion in capital earmarked for the sector by 2040. The report indicated that about $15 billion in energy transition capital is flowing into the region each year and about $25 billion is flowing out of the region. Of the $25 billion, oil and gas players with headquarters or a significant presence in Houston account for more than 80 percent.

“Increased energy transition capital commitment from energy incumbents raises investor confidence in Houston’s potential for energy transition leadership,” reads the report.

The Center for Houston's Future had a report of its own that published earlier this year and makes the argument of how Houston-based assets can be leveraged to lead a global clean hydrogen innovation.

“It should come as no surprise that Houston, the energy capital of the world, is taking the lead in the emerging low emissions energy ecosystem,” says Bryan Fisher, director of hubs at MPP and managing director of RMI’s Climate-Aligned Industries, in the release. “MPP’s work with HETI and the Center for Houston’s Future will focus on a portfolio of solutions, including low carbon fuels, clean hydrogen, and CCUS to drive sustainability and equitable economic growth for the region.”

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This article originally ran on InnovationMap.

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Fervo produces first geothermal power at flagship Utah project

energy milestone

Fervo Energy’s flagship project in Utah just generated its first geothermal power.

The electricity is now flowing to the power grid from one of Cape Station’s three generation units, Houston-based Fervo said in a news release. This represents an early but important milestone for the project, as the unit isn’t scheduled to deliver contracted power until Oct. 1.

The achievement, coming four months after Fervo’s roughly $2.2 billion IPO, demonstrates the viability of enhanced geothermal systems (EGS).

“This is a gamechanger for the geothermal industry. It establishes EGS as the defining new power generation technology of our time, and we believe it shows that the commercial and technical maturity of EGS is ready to meet the urgent need for reliable, clean power,” Tim Latimer, co-founder and CEO of Fervo, said in the release.

The plant’s two other units are scheduled to launch commercial operations on Jan. 1.

The three units make up the project’s 99-megawatt first phase. The next phase, which will add 400 megawatts of capacity, is under construction. The second phase is set to go online in 2028.

Altogether, Cape Station will provide more than 4 gigawatts of capacity, with 900 megawatts already spoken for. The 900 megawatts of contracted electricity would be enough to power nearly 1 million U.S. homes per year.

“Cape Station works because we treated the subsurface like an engineering challenge,” Jack Norbeck, co-founder and chief technology officer of Fervo, added in the release. “Years of drilling, completion design, subsurface modeling, and flow testing led to this moment, and this is the validation that matters most.”

Enhanced geothermal continuously draws on heat that’s deep underground, producing electricity around the clock regardless of weather or time of day. That makes it one of the only carbon-free resources capable of constant power delivery, which is critical for data centers and AI infrastructure.

Expert: Houston Energy and Climate Week showcases a city building the future

guest column

While hundreds of thousands descend on New York for Climate Week, Houston offered a different proposition: come where the work is being built. And last week Houston proved that it’s solving for more energy and fewer emissions; reliability and affordability; speed and durability. We are solving for the “&.”

That equation sharpened last week. On Sept. 14, the Environmental Protection Agency announced it had repealed most 2024 federal carbon-pollution standards for power plants and proposed rescinding remaining greenhouse-gas requirements. Policy matters, but it can pivot. The need to build does not.

HECW is a proving ground, not another conference stop. As I wrote in the Houston Chronicle, Mayor Sylvester Turner planted the seed by insisting we bring people together across the city and industry to drive Houston’s energy future. He knew false choices have no place here: oil and gas and clean technology; prosperity and stewardship; industry and lower emissions.

ECW joined the Climate Week Network this year, connecting Houston to a growing community of more than 500,000 people across 22-plus cities. We now have a seat at the global table—and a responsibility to use it well, building with other cities and the wider clean-energy-solutions world rather than merely talking at them.

The capital is already moving. Since 2017, Houston Energy Transition Initiative member companies have invested more than $95 billion in low-carbon infrastructure, technologies, and research and development. This is where the transition is financed, engineered, tested and operated. But the work requires more than capital. It requires capital allocators who understand the difference between a promising idea and a project that can scale, hire and endure.

Last week was Houston’s show and tell. At ARTECHOUSE, The &Bassador Reception & Awards brought art, technology, culture, philanthropy and energy together. Then the week went beyond downtown.

Sugar Land Town Square became the launchpad for the Metro Innovation Tour & Market: a place for an ecosystem conversation about smart cities, clean energy, equitable access and next-generation mobility before participants boarded three tour routes across greater Houston. It was also the starting point for the Bay City South Innovation Tour to Erthos Project Bravo in Matagorda County, where small groups saw Earth Mount solar modules being installed in real time. The conversation did not end at a panel. It went to the project site.

The HTX Tech Tours included a visit to the Erthos Project Bravo in Matagorda County. Photo courtesy

Approximately 100 startups from around the world pitched at Rice Alliance, Greentown Labs and Halliburton Labs events. At Astros Night at Daikin Park, builders, backers, and believers traded conference rooms for the diamond, creating an experience, not just another event. That is how this work becomes civic fabric.

Activation also means making the energy story felt, not merely explained. AY Young brought the Battery Tour for live performances. It was a reminder that the “Power of &” is not confined to a boardroom or a laboratory. Art and technology, culture and commerce, a new generation and established industry can share the same stage—and help more people see themselves in the work ahead.

Perhaps no activation made the “Power of &” more immediate and real than the Houston, We Have Solutions open mic night. At Creatopia’s Innovation Studio, people took the mic—or simply listened—to share what they were building, the problem they could not stop thinking about, and the connection they hoped to make. It put founders, artists, community builders, researchers and future-makers in one room. That is collaboration in real time: different kinds of expertise meeting before anyone knows exactly what the solution will be.

FOX26 helped carry that story beyond the rooms we convened, hosting Erthos COO Jessica Knight, Mars Materials co-founder Aaron Fitzgerald, and investors Taylor Chapman and Juliana Garaizar to discuss building and backing the future in Houston. Our region should be proud—not as self-congratulation, but because the world is beginning to experience energy and climate solutions firsthand.

This was also a week to give back. Allies in Energy awarded $27,500 to nine organizations advancing energy and climate literacy, civil dialogue, workforce pathways and community action. NRG Energy’s Brighter Communities provided a founding gift to expand the week and fund local grants. It took partners, hosts, sponsors, volunteers, funders and community organizations. That is the “Power of &”: collaboration that leaves a stronger community behind.

The “Power of &” cannot stop at Houston’s city limits. Louisiana’s participation—through its support of the Digital Delta Symposium & Expo—made clear that Houston’s builder ecosystem is regional by necessity. Gulf Coast infrastructure, supply chains, talent, and industrial decisions do not recognize state lines. Neither should our collaboration. If we are serious about building more energy with fewer emissions, we must align capital, resources and opportunity across the entire Gulf Coast.

That same commitment to practical collaboration means listening, learning and adjusting. A builder’s mindset does not protect a plan simply because it came first; it improves the conditions for the work to succeed. That is why Houston Energy and Climate Week will move to April 4–10, 2027—better weather, more time and space for connection, and a stronger city-wide experience for the people building what comes next.

But the real test begins now. Can we keep widening the circle? Can we continue to turn research into projects, pilots into infrastructure, capital into good jobs and climate ambition into results that families and communities can see? Can we make every new solution stronger by bringing in the people who must finance it, build it, operate it, live beside it and benefit from it?

That is the work ahead. Turner understood that Houston does not move forward by asking who wins the argument. It moves forward by asking who is ready to solve the problem. His legacy—and the promise of the “&”—is an invitation to choose collaboration over division, action over performance and possibility over false choices.

The future does not need another city to talk about it. It needs Houston to keep building it. And it will only be built if we keep choosing the "&."

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Katie Mehnert is the CEO of The Bee Suite, and a recent partner to The Builder’s Movement.

Texas Gov. Abbott broadens crackdown on data centers by halting all permits

data center crackdown

Responding to public outcry, Gov. Greg Abbott has stepped up his campaign against data centers by temporarily halting approval of environmental permits for data center projects.

This and previous moves by Abbott essentially amount to a temporary freeze on the development of new data centers in Texas. His actions come at a time when Texas’ stature as a data center hub has been soaring.

On Monday, Abbott directed the Texas Commission on Environmental Quality to stop issuing permits for data center developments until the Electric Reliability Council of Texas (ERCOT) and Public Utility Commission of Texas complete their review of projects seeking power grid connections.

With regulatory reviews underway and environmental permitting now frozen, state regulators currently cannot approve or deny requests from data center developers, Abbott said.

In a letter to the environmental quality commission’s executive director, Kelly Keel, Abbott said this directive is “consistent with my whole-of-government approach to ensure Texans’ natural resources and way of life are protected.”

Abbott previously ordered the Texas Water Development Board to require data centers to meet reporting requirements for water use. He also told the board to impose penalties for failure to comply with those requirements and to collaborate with ERCOT on its review.

Abbott launched his crackdown on data centers in August by ordering the Public Utility Commission and ERCOT to review data center projects in Texas. The audits will examine all data centers in the queue for interconnections before any more projects can move forward. Interconnections enable data centers to share power, data and computing resources.

In calling for those audits, Abbott cited concerns over data centers’ use of water and electricity, and the centers’ effect on infrastructure expenses and consumers’ utility rates.

“Simply put, Texans must come first,” the governor said.

During next year’s legislation session, Abbott will push for the elimination of state financial incentives for data center projects.

Ed Hirs, an energy fellow ⁠at the University of Houston, told Reuters that Abbott was backtracking on “his earlier pronouncements about data centers leading to lower electricity prices.”

Abbott’s actions come amid growing public backlash over data centers. A recent University of Houston survey found that nearly 63 percent of Houston-area residents opposed construction of a data center within a mile of their home.

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