Solar represented 14 percent of energy supplied to the ERCOT electric grid in 2025. Photo via bp.com

Solar barely eclipsed coal to become the third biggest source of energy generated for the Electric Reliability Council of Texas (ERCOT) in 2025, according to new data.

In 2024, solar represented 10 percent of energy supplied to the ERCOT electric grid. Last year, that number climbed to 14 percent. During the same period, coal’s share remained at 13 percent.

From the largest to smallest share, here’s the breakdown of other ERCOT energy sources in 2025 compared with 2024:

  • Combined-cycle gas: 33 percent, down from 35 percent in 2024
  • Wind: 23 percent, down from 24 percent in 2024
  • Natural gas: 8 percent, down from 9 percent in 2024
  • Nuclear: 8 percent, unchanged from 2024
  • Other sources: 1 percent, unchanged from 2024

Combined, solar and wind accounted for 37 percent of ERCOT energy sources.

Looking ahead, solar promises to reign as the star of the ERCOT show:

  • An ERCOT report released in December 2024 said solar is on track to continue outpacing other energy sources in terms of growth of installed generating capacity, followed by battery energy storage.
  • In December, ERCOT reported that more than 11,100 megawatts of new generating capacity had been added to its grid since the previous winter. One megawatt of electricity serves about 250 homes in peak-demand periods. Battery energy storage made up 47 percent of the new capacity, with solar in second place at 40 percent.

The mix of ERCOT’s energy is critical to Texas’ growing need for electricity, as ERCOT manages about 90 percent of the electric load for the state, including the Houston metro area. Data centers, AI and population growth are driving heightened demand for electricity.

In the first nine months of 2025, Texas added a nation-leading 7.4 gigawatts of solar capacity, according to a report from data and analytics firm Wood Mackenzie and the Solar Energy Industries Association.

“Remarkable growth in Texas, Indiana, Utah and other states ... shows just how decisively the market is moving toward solar,” says Abigail Ross Hopper, president and CEO of the solar association.

Time is of the essence in getting power plants online. Getty Images

Big Tech's soaring energy demands making coal-fired power plant sites attractive

Transforming Coal Power

Coal-fired power plants, long an increasingly money-losing proposition in the U.S., are becoming more valuable now that the suddenly strong demand for electricity to run Big Tech's cloud computing and artificial intelligence applications has set off a full-on sprint to find new energy sources.

President Donald Trump — who has pushed for U.S. “energy dominance” in the global market and suggested that coal can help meet surging power demand — is wielding his emergency authority to entice utilities to keep older coal-fired plants online and producing electricity.

While some utilities were already delaying the retirement of coal-fired plants, the scores of coal-fired plants that have been shut down the past couple years — or will be shut down in the next couple years — are the object of growing interest from tech companies, venture capitalists, states and others competing for electricity.

That’s because they have a very attractive quality: high-voltage lines connecting to the electricity grid that they aren’t using anymore and that a new power plant could use.

That ready-to-go connection could enable a new generation of power plants — gas, nuclear, wind, solar or even battery storage — to help meet the demand for new power sources more quickly.

For years, the bureaucratic nightmare around building new high-voltage power lines has ensnared efforts to get permits for such interconnections for new power plants, said John Jacobs, an energy policy analyst for the Washington, D.C.-based Bipartisan Policy Center.

“They are very interested in the potential here. Everyone sort of sees the writing on the wall for the need for transmission infrastructure, the need for clean firm power, the difficulty with siting projects and the value of reusing brownfield sites,” Jacobs said.

Rising power demand, dying coal plants

Coincidentally, the pace of retirements of the nation's aging coal-fired plants had been projected to accelerate at a time when electricity demand is rising for the first time in decades.

The Department of Energy, in a December report, said its strategy for meeting that demand includes re-using coal plants, which have been unable to compete with a flood of cheap natural gas while being burdened with tougher pollution regulations aimed at its comparatively heavy emissions of planet-warming greenhouse gases.

There are federal incentives, as well — such as tax credits and loan guarantees — that encourage the redevelopment of retired coal-fired plants into new energy sources.

Todd Snitchler, president and CEO of the Electric Power Supply Association, which represents independent power plant owners, said he expected Trump's executive orders will mean some coal-fired plants run longer than they would have — but that they are still destined for retirement.

Surging demand means power plants are needed, fast

Time is of the essence in getting power plants online.

Data center developers are reporting a yearlong wait in some areas to connect to the regional electricity grid. Rights-of-way approvals to build power lines can also be difficult to secure, given objections by neighbors who may not want to live near them.

Stephen DeFrank, chairman of the Pennsylvania Public Utility Commission, said he believes rising energy demand has made retiring coal-fired plants far more valuable.

That's especially true now that the operator of the congested mid-Atlantic power grid has re-configured its plans to favor sites like retired coal-fired plants as a shortcut to meet demand, DeFrank said.

“That’s going to make these properties more valuable because now, as long as I’m shovel ready, these power plants have that connection already established, I can go in and convert it to whatever," DeFrank said.

Gas, solar and more at coal power sites

In Pennsylvania, the vast majority of conversions is likely to be natural gas because Pennsylvania sits atop the prolific Marcellus Shale reservoir, DeFrank said.

In states across the South, utilities are replacing retiring or retired coal units with gas. That includes a plant owned by the Tennessee Valley Authority; a Duke Energy project in North Carolina; and a Georgia Power plant.

The high-voltage lines at retired coal plants on the Atlantic Coast in New Jersey and Massachusetts were used to connect offshore wind turbines to electricity grids.

In Alabama, the site of a coal-fired plant, Plant Gorgas, shuttered in 2019, will become home to Alabama Power’s first utility-scale battery energy storage plant.

Texas-based Vistra, meanwhile, is in the process of installing solar panels and energy storage plants at a fleet of retired and still-operating coal-fired plants it owns in Illinois, thanks in part to state subsidies approved there in 2021.

Nuclear might be coming

Nuclear is also getting a hard look.

In Arizona, lawmakers are advancing legislation to make it easier for three utilities there — Arizona Public Service, Salt River Project and Tucson Electric Power — to put advanced nuclear reactors on the sites of retiring coal-fired plants.

At the behest of Indiana's governor, Purdue University studied how the state could attract a new nuclear power industry. In its November report, it estimated that reusing a coal-fired plant site for a new nuclear power plant could reduce project costs by between 7% and 26%.

The Bipartisan Policy Center, in a 2023 study before electricity demand began spiking, estimated that nuclear plants could cut costs from 15% to 35% by building at a retiring coal plant site, compared to building at a new site.

Even building next to the coal plant could cut costs by 10% by utilizing transmission assets, roads and buildings while avoiding some permitting hurdles, the center said.

That interconnection was a major driver for Terrapower when it chose to start construction in Wyoming on a next-generation nuclear power plant next to PacifiCorp’s coal-fired Naughton Power Plant.

Jobs, towns left behind by coal

Kathryn Huff, a former U.S. assistant secretary for nuclear energy who is now an associate professor at the University of Illinois Urbana-Champaign, said the department analyzed how many sites might be suitable to advanced nuclear reactor plants.

A compelling factor is the workers from coal plants who can be trained for work at a nuclear plant, Huff said. Those include electricians, welders and steam turbine maintenance technicians.

In Homer City, the dread of losing its coal-fired plant — it shut down in 2023 after operating for 54 years — existed for years in the hills of western Pennsylvania’s coal country.

“It’s been a rough 20 years here for our area, maybe even longer than that, with the closing of the mines, and this was the final nail, with the closing of the power plant,” said Rob Nymick, Homer City's manager. “It was like, ‘Oh my god, what do we do?’”

That is changing.

The plant's owners in recent weeks demolished the smoke stacks and cooling towers at the Homer City Generating State and announced a $10 billion plan for a natural gas-powered data center campus.

It would be the nation’s third-largest power generator and that has sown some optimism locally.

“Maybe we will get some families moving in, it would help the school district with their enrollment, it would help us with our population,” Nymick said. “We’re a dying town and hopefully maybe we can get a restaurant or two to open up and start thriving again. We’re hoping.”

Energy sources are often categorized as renewable or not, but perhaps a more accurate classification focuses on the type of reaction that converts energy into useful matter. Photo by simpson33/Getty Images

How is energy produced?

ENERGY 101

Many think of the Energy Industry as a dichotomy–old vs. new, renewable vs. nonrenewable, good vs. bad. But like most things, energy comes from an array of sources, and each kind has its own unique benefits and challenges. Understanding the multi-faceted identity of currently available energy sources creates an environment in which new ideas for cleaner and more sustainable energy sourcing can proliferate.

At a high level, energy can be broadly categorized by the process of extracting and converting it into a useful form.

Energy Produced from Chemical Reaction

Energy derived from coal, crude oil, natural gas, and biomass is primarily produced as a result of bonds breaking during a chemical reaction. When heated, burned, or fermented, organic matter releases energy, which is converted into mechanical or electrical energy.

These sources can be stored, distributed, and shared relatively easily and do not have to be converted immediately for power consumption. However, the resulting chemical reaction produces environmentally harmful waste products.

Though the processes to extract these organic sources of energy have been refined for many years to achieve reliable and cheap energy, they can be risky and are perceived as invasive to mother nature.

According to the 2022 bp Statistical Review of World Energy, approximately 50% of the world’s energy consumption comes from petroleum and natural gas; another 25% from coal. Though there was a small decline in demand for oil from 2019 to 2021, the overall demand for fossil fuels remained unchanged during the same time frame, mostly due to the increase in natural gas and coal consumption.

Energy Produced from Mechanical Reaction

Energy captured from the earth’s heat or the movement of wind and water results from the mechanical processes enabled by the turning of turbines in source-rich environments. These turbines spin to produce electricity inside a generator.

Solar energy does not require the use of a generator but produces electricity due to the release of electrons from the semiconducting materials found on a solar panel. The electricity produced by geothermal, wind, solar, and hydropower is then converted from direct current to alternating current electricity.

Electricity is most useful for immediate consumption, as storage requires the use of batteries–a process that turns electrical energy into chemical energy that can then be accessed in much the same way that coal, crude oil, natural gas, and biomass produce energy.

Energy Produced from a Combination of Reactions

Hydrogen energy comes from a unique blend of both electrical and chemical energy processes. Despite hydrogen being the most abundant element on earth, it is rarely found on its own, requiring a two-step process to extract and convert energy into a usable form. Hydrogen is primarily produced as a by-product of fossil fuels, with its own set of emissions challenges related to separating the hydrogen from the hydrocarbons.

Many use electrolysis to separate hydrogen from other elements before performing a chemical reaction to create electrical energy inside of a contained fuel cell. The electrolysis process is certainly a more environmentally-friendly solution, but there are still great risks with hydrogen energy–it is highly flammable, and its general energy output is less than that of other electricity-generating methods.

Energy Produced from Nuclear Reaction

Finally, energy originating from the splitting of an atom’s nucleus, mostly through nuclear fission, is yet another way to produce energy. A large volume of heat is released when an atom is bombarded by neutrons in a nuclear power plant, which is then converted to electrical energy.

This process also produces a particularly sensitive by-product known as radiation, and with it, radioactive waste. The proper handling of radiation and radioactive waste is of utmost concern, as its effects can be incredibly damaging to the environment surrounding a nuclear power plant.

Nuclear fission produces minimal carbon, so nuclear energy is oft considered environmentally safe–as long as strict protocols are followed to ensure proper storage and disposal of radiation and radioactive waste.

Nuclear to Mechanical to Chemical?

Interestingly enough, the Earth’s heat comes from the decay of radioactive materials in the Earth’s core, loosely linking nuclear power production back to geothermal energy production.

It’s also clear the conversion of energy into electricity is the cleanest option for the environment, yet adequate infrastructure remains limited in supply and accessibility. If not consumed immediately as electricity, energy is thus converted into a chemical form for the convenience of storage and distribution it provides.

Perhaps the expertise and talent of Houstonians serving the flourishing academic and industrial sectors of energy development will soon resolve many of our current energy challenges by exploring further the circular dynamic of the energy environment. Be sure to check out our Events Page to find the networking event that best serves your interest in the Energy Transition.


------

Lindsey Ferrell is a contributing writer to EnergyCapitalHTX and founder of Guerrella & Co.

Ad Placement 300x100
Ad Placement 300x600

CultureMap Emails are Awesome

Houston startup launches groundbreaking mineral hydrogen pilot

pilot project

Houston climatech company Vema Hydrogen recently completed drilling its first two pilot wells in Quebec for its Engineered Mineral Hydrogen (EMH) pilot. The company says the project is the first EMH pilot of its kind.

Vema’s EMH technology produces low-cost, high-purity hydrogen from subsurface rock formations. It has the capacity to support e-fuel and clean mobility industries and the shipping and air transport markets. The pilot project is the first field deployment of the company’s technology.

“This pilot will provide the critical data needed to validate Engineered Mineral Hydrogen at commercial scale and demonstrate that Quebec can lead the world in this emerging clean energy category,” Pierre Levin, CEO of Vema Hydrogen, said in a news release.

Levin added that the sample collected thus far in the pilot is “exactly what we expected, and is very promising for hydrogen yields.”

Through the pilot, Vema will collect core samples and begin subsurface analysis to evaluate fluid movement and monitor hydrogen production from the wells. The data collected from the pilot will shape Vema's plans for commercialization and provide documentation for proof of concept in the field, according to the news release.

“Vema Hydrogen perfectly embodies the spirit of the grey to green movement: transforming mining liabilities into drivers of innovation and ecological transition,” Ludovic Beauregard, circular economy commissioner at the Thetford Region Economic Development Corporation, added in the release.

“This project demonstrates that it is possible to reconcile the revitalization of mining regions, clean energy and sustainable economic development for these areas.”

In addition to its pilot in Canada, Vema also recently signed a 10-year hydrogen purchase and sale agreement with San Francisco-based Verne Power to supply clean hydrogen for data centers across California. The company was selected as a Qualified Supplier by The First Public Hydrogen Authority, which will allow it to supply clean hydrogen at scale to California’s municipalities, transit agencies and businesses through the FPH2 network.

Vema aims to produce Engineered Mineral Hydrogen for less than $1 per kilogram. The company, founded in 2024, is working toward a gigawatt-scale hydrogen supply in North America.

Houston startup wins funding through new Bezos Earth Fund initiative

global winner

A Houston-based climatech startup is one of the first 16 companies in the world to receive funding through a new partnership between The Bezos Earth Fund and The Earthshot Prize.

Mati Carbon will receive $100,000 through the Bezos Earth Fund’s Acceleration Initiative. The initiative will provide $4.8 million over three years to support climate and nature solutions startups. It's backed by The Bezos Earth Fund, which was founded through a $10 billion gift from Amazon founder Jeff Bezos and aims to "transform the fight against climate change."

The Acceleration Initiative will choose 16 startups each year from The Earthshot Prize’s global pool of nominations that were not selected as finalists. The Earthshot Prize, founded by Prince William, awards £1 million to five energy startups each year over a decade.

"The Earthshot Prize selects 15 finalists each year, but our wider pool of nominations represents a global pipeline of innovators and investable solutions that benefit both people and planet. Collaborating with the Bezos Earth Fund to support additional high-potential solutions is at the heart of commitment to working with partners who share our vision," Jason Knauf, CEO of The Earthshot Prize, said in a news release. "By combining our strengths to support 48 carefully selected grantees from The Earthshot Prize’s pool of nominations, our partnership with the Bezos Earth Fund means we will continue to drive systemic change beyond our annual Prize cycle, delivering real-world impact at scale and speed.”

Mati Carbon was founded in 2022 by co-directors Shantanu Agarwal and Rwitwika Bhattacharya. It removes carbon through its Enhanced Rock Weathering (ERW) program and works with agricultural farms in Africa and India. Mati Carbon says the farmers it partners with are some of the most vulnerable to the impacts of climate change.

"As one of the first 16 organizations selected, this support enables us to expand our operations, move faster and think bigger about the impact we can create," the company shared in a LinkedIn post.

The other grantees from around the world include:

  • Air Protein Inc.
  • Climatenza Solar
  • Instituto Floresta Viva
  • Forum Konservasi Leuser
  • Fundación Rewilding Argentina
  • Hyperion Robotics
  • InPlanet
  • Lasso
  • Mandai Nature
  • MERMAID
  • Asociación Conservacionista Misión Tiburón
  • Simple Planet
  • Snowchange Cooperative
  • tHEMEat Company
  • UP Catalyst

Mati Carbon also won the $50 million grand prize in the XPRIZE Carbon Removal competition, backed by Elon Musk’s charitable organization, The Musk Foundation, last year.

Texas' oil and gas foundation could boost its geothermal future, UH says

future of geothermal

Equipped with the proper policies and investments, Texas could capitalize on its oil and gas infrastructure and expertise to lead the U.S. in development of advanced geothermal power, a new University of Houston white paper says.

Drilling, reservoir development and subsurface engineering are among the Texas oil and gas industry’s capabilities that could translate to geothermal energy, according to a news release. Furthermore, oil and gas skills, data, technology and supply chains could help make geothermal power more cost-effective.

Up to 80 percent of the investment required for a geothermal project involves capacity and skills that are common in the oil and gas industry, the white paper points out.

Building on its existing oil-and-gas foundation, Texas could help accelerate production of geothermal energy, lower geothermal energy costs and create more jobs in the energy workforce, according to the news release.

The paper also highlights geothermal progress made by Houston-based companies Fervo Energy, Quaise Energy and Sage Geosystems, as well as Canada-based Eavor Technologies Inc.

UH’s Division of Energy published the white paper, Advanced Geothermal: Opportunities and Challenges, in partnership with the C.T. Bauer College of Business’ Gutierrez Energy Management Institute.

“Energy demand, especially electricity demand, is continuing to grow, and we need to develop new low-carbon energy sources to meet those needs,” Greg Bean, executive director of the institute and author of the white paper, said of geothermal’s potential.