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Houston-area clean energy projects lose more than $700M in federal funds

funding cut

The Department of Energy has axed federal funding for Houston-area clean energy projects from ExxonMobil, Calpine and Ørsted. Photo via exxonmobil.com

The federal government has canceled more than $700 million in funding for three clean energy projects in the Houston area.

In all, the U.S. Department of Energy (DOE) recently wiped out $3.7 billion in funding for 24 carbon capture and decarbonization projects across the country.

Houston-area projects that took a hit are:

It’s unclear how the loss of federal funding will affect the three Houston-area projects.

All $3.7 billion from the DOE was awarded in 2024 and 2025 during the Biden administration—in some cases days before President Trump took office.

“While the previous administration failed to conduct a thorough financial review before signing away billions of taxpayer dollars, the Trump administration is doing our due diligence to ensure we are utilizing taxpayer dollars to strengthen our national security, bolster affordable, reliable energy sources, and advance projects that generate the highest possible return on investment,” U.S. Energy Secretary Chris Wright said in a release.

Advocates for clean energy sharply criticized the DOE’s action:

  • Jessie Stolark, executive director of the Carbon Capture Coalition, said cancellation of the 24 DOE-funded projects “is a major step backward in the nationwide deployment of carbon management technologies. It is hugely disappointing to see these projects canceled — projects that had already progressed through a rigorous, months-long review process by technical experts at DOE.”
  • Iliana Paul, deputy director for the Sierra Club’s industrial transformation campaign, complained that the Trump administration “killed dozens of major investments in American competitiveness, good jobs, and cleaner air to support Trump’s tax cuts and line the pockets of billionaires. These projects were not just pro-climate; they were pro-jobs, pro-innovation, and pro-public health. American workers, fenceline communities, and forward-thinking companies have had the rug pulled out from under them.”
  • Conrad Schneider, senior U.S. director of the Clean Air Taskforce, said the DOE’s move “is bad for U.S. competitiveness in the global market and also directly contradictory to the administration’s stated goals of supporting energy production and environmental innovation. Canceling cutting-edge technology demonstrations, including support for carbon capture and storage projects, undercuts U.S. competitiveness at a time when there is a growing global market for cleaner industrial products and technologies.”
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Rice Wind Energy had a strong showing at the DOE's 2025 Collegiate Wind Competition. Photo courtesy Rice University.

Houston students take home top prizes at DOE wind energy competition

wind winners

The student-led Rice Wind Energy team clinched second place overall at the U.S. Department of Energy’s 2025 Collegiate Wind Competition (CWC), which challenges students nationwide to design and build wind turbines, develop wind energy projects and engage in public outreach to promote renewable energy.

“The Collegiate Wind Competition is such an incredible opportunity for students passionate about sustainability to gain industry-applicable, hands-on experience in the renewable energy space,” senior and team vice president Jason Yang said in a news release.

The event was hosted by the National Renewable Energy Laboratories at the University of Colorado Boulder campus. Over 40 teams entered the competition, with just 12 advancing to the final stage. The competition comprises four core contests: connection creation, turbine design, turbine testing and project development.

Rice Wind Energy had the largest team with 26 students advancing to the final stage of the competition. It picked up a first-place win in the connection creation contest, and also placed third in the project development, fourth in turbine testing and fifth in turbine design contests.

“This accomplishment is a testament to our focus, teamwork and unwavering determination,” senior Esther Fahel, Rice Wind Energy’s 2024-25 president, said in a news release. “It’s a remarkable experience to have watched this team progress from its inception to the competition podium. The passion and drive of Rice students is so palpable.”

In the Connection Creation contest, the team hosted a wind energy panel with Texas Tech University, invited local high school students to campus for educational activities, produced a series of Instagram reels to address wind energy misconceptions and launched its first website.

The team also developed an autonomous wind turbine and floating foundation design that successfully produced over 20 watts of power in the wind tunnel. They were also one of just a few teams to complete the rigorous safety test, which brought their turbine to below 10 percent of its operational speed within 10 seconds of pressing an emergency stop button. It also designed a 450-megawatt floating wind farm located 38 kilometers off the coast of Oregon by using a multi-decision criteria matrix to select the optimal site, and conducted technical modeling.

“I am amazed at the team’s growth in impact and collaboration over the past year,” senior Ava Garrelts, the team’s Connection Creation lead for 2024-25, said in a news release. “It has been incredible to see our members develop their confidence by building tangible skills and lifelong connections. We are all honored to receive recognition for our work, but the entire experience has been just as rewarding.”

Rice faculty and industry sponsors included David Trevas and faculty advisers Gary Woods and Jose Moreto, Knape Associates, Hartzell Air Movement, NextEra Analytics, RWE Clean Energy, H&H Business Development and GE Vernova, Rice’s Oshman Engineering Design Kitchen, George R. Brown School of Engineering and Computing, Rice Engineering Alumni and Rice Center for Engineering Leadership.

The BYU Wind Energy Team took home the overall first-place prize. A team from the University of Texas at Dallas was the only other Texas-based team to make the 12-team finals.

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.”

Seven projects from Houston companies were granted more than $41 million in federal and non-federal funding through the Methane Emissions Reduction Program. Photo via Canva

Houston companies scoop up $31 million in funds from DOE, EPA methane emissions program

fresh funds

The U.S. Department of Energy and the U.S. Environmental Protection Agency announced the selection of seven projects from Houston companies to receive funding through the Methane Emissions Reduction Program.

The projects are among 43 others nationwide, including 12 from Texas, that reduce, monitor, measure, and quantify methane emissions from the oil and gas sector. The DOE and EPA awarded $850 million in total through the program.

The Houston companies picked up $31.7 million in federal funding through the program in addition to more than $9.5 million in non-federal dollars.

“I’m excited about the opportunities these will create internally but even more so the creation of jobs and training opportunities for the communities in which we work,” Scott McCurdy, Encino Environmental Services CEO, said in a news release. His company received awards for two projects.

“These projects will allow us to further support and strengthen the U.S. Energy industry’s ability to deliver clean, reliable, and affordable energy globally,” he added.

The Houston-area awards included:

DaphneTech USA LLC

Total funding: $5.8 million (approximately $4.5 million in federal, $1.3 million in non-federal)

The award was granted for the company’s Daphne and Williams Methane Slip Abatement Plasma-Catalyst Scale-Up project. Daphne will study how its SlipPure technology, a novel exhaust gas cleaning system that abates methane and exhaust gas pollution from natural gas-fueled engines, can be economically viable across multiple engine types and operating conditions.

Baker Hughes Energy Transition LLC 

Total funding: $7.47 million (approximately $6 million in federal, $1.5 million in non-federal)

The award was granted for the company’s Advancing Low Cost CH4 Emissions Reduction from Flares through Large Scale Deployment of Retrofittable and Adaptive Technology project. The project aims to develop a scalable, integrated methane emissions reduction system for flares based on optical gas imaging and estimation algorithms.

Encino Environmental Services

Total funding: $15.17 million (approximately $11 million in federal, $4.17 million in non-federal)

The award was granted for two projects. The Advanced Methane Reduction System: Integrating Infrared and Visual Imaging to Assess Net Heating Value at the Combustion Zone and Determine Combustion Efficiency to Enhance Flaring Performance project aims to develop and deploy an advanced continuous emissions monitoring system. It’s Advancing Methane Emissions Reduction through Innovative Technology project will develop and deploy a technology using sensors and composite materials to address emissions originating in storage tanks.

Envana Software Solutions

Total funding: $5.26 million (approximately $4.2 million in federal, $1 million in non-federal)

The award was granted for the company’s Leak Detection and Reduction Software to Identify Methane Emissions and Trigger Mitigation at Oil and Gas Production Facilities Based on SCADA Data project. It aims to improve its Recon software for monitoring methane emissions and develop partnerships with local universities and organizations.

Capwell Services Inc.

Total funding: $4.19 million (approximately $3.3 million in federal, $837,000 in non-federal)

The award was granted for its Methane Emissions Abatement Technology for Low-Flow and Intermittent Emission Sources project. It aims to to deploy and field-test a methane abatement unit and improve air quality and health outcomes for communities near production facilities and establish field technician internships for local residents.

Blue Sky Measurements 

Total funding: $3.41 million (approximately $2.7 million in federal, $683,000 in non-federal)

The award was granted for its Field Validation of Novel Fixed Position Optical Sensor for Fugitive Methane Emission Detection Quantification and Location with Real-Time Notification for Rapid Mitigation project. It aims to field test an optical sensing technology at six well sites in the Permian Basin.

Southern Methodist University, The University of Texas at Austin, Texas A&M Engineering Experiment Station and Hyliion Inc. were other Texas-based organizations to earn awards. See the full list of projects here.

Permascand USA's new Houston facility will manufacture high-performance electrodes from new and recycled materials. Photo via Getty Images

DOE grants $13.7M tax credit to power Houston clean hydrogen project

power move

Permascand USA Inc., a subsidiary of Swedish manufacturing company Permascand, has been awarded a $13.7 million tax credit by the U.S. Department of Energy (DOE) to expand across the country, including a new clean hydrogen manufacturing facility in Houston.

The new Houston facility will manufacture high-performance electrodes from new and recycled materials.

"We are proud to receive the support of the U.S. Department of Energy within their objective for clean energy," Permascand CEO Fredrik Herlitz said in a news release. "Our mission is to provide electrochemical solutions for the global green transition … This proposed project leverages Permascand’s experience in advanced technologies and machinery and will employ a highly skilled workforce to support DOE’s initiative in lowering the levelized cost of hydrogen.”

The funding comes from the DOE’s Qualifying Advanced Energy Project Credit program, which focuses on clean energy manufacturing, recycling, industrial decarbonization and critical materials projects.

The Permascand proposal was one of 140 projects selected by the DOE with over 800 concept papers submitted last summer. The funding is part of $6 billion in tax credits in the second round of the Qualifying Advanced Energy Project Credit program that was deployed in January.

So far credits have been granted to approximately 250 projects across more than 40 states, with project investments over $44 billion dollars, according to the Department of Treasury. Read more here.
Envana Software Solutions' tech allows an oil and gas company to see a full inventory of greenhouse gases. Photo via Getty Images

Houston joint venture secures $5.2M for AI-powered methane tracking tech

fresh funds

Houston-based Envana Software Solutions has received more than $5.2 million in federal and non-federal funding to support the development of technology for the oil and gas sector to monitor and reduce methane emissions.

Thanks to the work backed by the new funding, Envana says its suite of emissions management software will become the industry's first technology to allow an oil and gas company to obtain a full inventory of greenhouse gases.

The funding comes from a more than $4.2 million grant from the U.S. Department of Energy (DOE) and more than $1 million in non-federal funding.

“Methane is many times more potent than carbon dioxide and is responsible for approximately one-third of the warming from greenhouse gases occurring today,” Brad Crabtree, assistant secretary at DOE, said in 2024.

With the funding, Envana will expand artificial intelligence (AI) and physics-based models to help detect and track methane emissions at oil and gas facilities.

“We’re excited to strengthen our position as a leader in emissions and carbon management by integrating critical scientific and operational capabilities. These advancements will empower operators to achieve their methane mitigation targets, fulfill their sustainability objectives, and uphold their ESG commitments with greater efficiency and impact,” says Nagaraj Srinivasan, co-lead director of Envana.

In conjunction with this newly funded project, Envana will team up with universities and industry associations in Texas to:

  • Advance work on the mitigation of methane emissions
  • Set up internship programs
  • Boost workforce development
  • Promote environmental causes

Envana, a software-as-a-service (SaaS) startup, provides emissions management technology to forecast, track, measure and report industrial data for greenhouse gas emissions.

Founded in 2023, Envana is a joint venture between Houston-based Halliburton, a provider of products and services for the energy industry, and New York City-based Siguler Guff, a private equity firm. Siguler Gulf maintains an office in Houston.

“Envana provides breakthrough SaaS emissions management solutions and is the latest example of how innovation adds to sustainability in the oil and gas industry,” Rami Yassine, a senior vice president at Halliburton, said when the joint venture was announced.

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1PointFive secures new buyer for Texas CO2 removal project​

seeing green

Houston’s Occidental Petroleum Corp., or Oxy, and its subsidiary 1PointFive have secured another carbon removal credit deal for its $1.3 billion direct air capture (DAC) project, Stratos.

California-based Palo Alto Networks has agreed to purchase 10,000 tons of carbon dioxide removal (CDR) credits over five years from the project, according to a news release.

The company joins others like Microsoft, Amazon, AT&T, Airbus, the Houston Astros and the Houston Texans that have agreed to buy CDR credits from 1Point5.

"Collaborating with 1PointFive in this carbon removal credit agreement highlights our proactive approach toward exploring innovative solutions for a greener future,” BJ Jenkins, president of Palo Alto Networks, said in the release.

The Texas-based Stratos project is slated to come online this year near Odessa. It's being developed through a joint venture with investment manager BlackRock and is designed to capture up to 500,000 metric tons of CO2 per year. The U.S Environmental Protection Agency recently approved Class VI permits for the project.

DAC technology pulls CO2 from the air at any location, not just where carbon dioxide is emitted. Under the agreement with Palo Alto Networks and others, the carbon dioxide that underlies the credits will be stored in a below-the-surface saline aquifer and won’t be used to produce oil or gas.

“We look forward to collaborating with Palo Alto Networks and using Direct Air Capture to help advance their sustainability strategy,” Michael Avery, president and general manager of 1PointFive, said in the release. “This agreement continues to build momentum for high-integrity carbon removal while furthering DAC technology to support energy development in the United States.”

Houston researchers develop strong biomaterial that could replace plastic

plastic problem

Collaborators from two Houston universities are leading the way in engineering a biomaterial into a scalable, multifunctional material that could potentially replace plastic.

The research was led by Muhammad Maksud Rahman, an assistant professor of mechanical and aerospace engineering at the University of Houston and an adjunct assistant professor of materials science and nanoengineering at Rice University. The team shared its findings in a study in the journal Nature Communications earlier this month. M.A.S.R. Saadi, a doctoral student in material science and nanoengineering at Rice, served as the first author.

The study introduced a biosynthesis technique that aligns bacterial cellulose fibers in real-time, which resulted in robust biopolymer sheets with “exceptional mechanical properties,” according to the researchers.

Biomaterials typically have weaker mechanical properties than their synthetic counterparts. However, the team was able to develop sheets of material with similar strengths to some metals and glasses. And still, the material was foldable and fully biodegradable.

To achieve this, the team developed a rotational bioreactor and utilized fluid motion to guide the bacteria fibers into a consistent alignment, rather than allowing them to align randomly, as they would in nature.

The process also allowed the team to easily integrate nanoscale additives—like graphene, carbon nanotubes and boron nitride—making the sheets stronger and improving the thermal properties.

“This dynamic biosynthesis approach enables the creation of stronger materials with greater functionality,” Saadi said in a release. “The method allows for the easy integration of various nanoscale additives directly into the bacterial cellulose, making it possible to customize material properties for specific applications.”

Ultimately, the scientists at UH and Rice hope this discovery could be used for the “next disposable water bottle,” which would be made by biodegradable biopolymers in bacterial cellulose, an abundant resource on Earth.

Additionally, the team sees applications for the materials in the packaging, breathable textiles, electronics, food and energy sectors.

“We envision these strong, multifunctional and eco-friendly bacterial cellulose sheets becoming ubiquitous, replacing plastics in various industries and helping mitigate environmental damage,” Rahman said the release.

America's only rare earth producer announces $500M agreement with Apple

Digging In

MP Materials, which runs the only American rare earths mine, announced a new $500 million agreement with tech giant Apple on Tuesday to produce more of the powerful magnets used in iPhones as well as other high-tech products like electric vehicles.

This news comes on the heels of last week’s announcement that the U.S. Defense Department agreed to invest $400 million in shares of the Las Vegas-based company. That will make the government the largest shareholder in MP Materials and help increase magnet production.

Despite their name, the 17 rare earth elements aren’t actually rare, but it’s hard to find them in a high enough concentration to make a mine worth the investment.

They are important ingredients in everything from smartphones and submarines to EVs and fighter jets, and it's those military applications that have made rare earths a key concern in ongoing U.S. trade talks. That's because China dominates the market and imposed new limits on exports after President Donald Trump announced his widespread tariffs. When shipments dried up, the two sides sat down in London.

The agreement with Apple will allow MP Materials to further expand its new factory in Texas to use recycled materials to produce the magnets that make iPhones vibrate. The company expects to start producing magnets for GM's electric vehicles later this year and this agreement will let it start producing magnets for Apple in 2027.

The Apple agreement represents a sliver of the company's pledge to invest $500 billion domestically during the Trump administration. And although the deal will provide a significant boost for MP Materials, the agreement with the Defense Department may be even more meaningful.

Neha Mukherjee, a rare earths analyst with Benchmark Mineral Intelligence, said in a research note that the Pentagon's 10-year promise to guarantee a minimum price for the key elements of neodymium and praseodymium will guarantee stable revenue for MP Minerals and protect it from potential price cuts by Chinese producers that are subsidized by their government.

“This is the kind of long-term commitment needed to reshape global rare earth supply chains," Mukherjee said.

Trump has made it a priority to try to reduce American reliance on China for rare earths. His administration is both helping MP Materials and trying to encourage the development of new mines that would take years to come to fruition. China has agreed to issue some permits for rare earth exports but not for military uses, and much uncertainty remains about their supply. The fear is that the trade war between the world’s two biggest economies could lead to a critical shortage of rare earth elements that could disrupt production of a variety of products. MP Materials can't satisfy all of the U.S. demand from its Mountain Pass mine in California’s Mojave Desert.

The deals by MP Materials come as Beijing and Washington have agreed to walk back on their non-tariff measures: China is to grant export permits for rare earth magnets to the U.S., and the U.S. is easing export controls on chip design software and jet engines. The truce is intended to ease tensions and prevent any catastrophic fall-off in bilateral relations, but is unlikely to address fundamental differences as both governments take steps to reduce dependency on each other.

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