DOE announces over $60M in federal funding for power grid improvement

show me the money

The United States Department of Energy is doling out over $200 million for grid improvements — and one of the largest portions will be coming to Texas. Photo via Getty Images

Texas is getting $60.6 million in federal grants to bolster the state’s frequently taxed power grid.

The funding, announced July 6 by the U.S. Department of Energy, totals over $200 million to be distributed across the country. The Lone Star State's chunk will be earmarked for pinpointing gaps in the grid’s dependability and reducing weather-related grid disruptions. The Texas Division of Energy Management will decide how to dole out the money.

“By itself, is $60 million going to be determinative to make our grid reliable? Of course not,” Doug Lewin, president of Austin-based energy consulting firm Stoic Energy, tells the Austin American-Statesman. “It’ll cost more than that, but every bit counts, and $60 million is not a small amount of money, so [the state] could probably do a lot of good with that.”

The Texas grid infamously came under intense scrutiny in February 2021 during and after the statewide deep freeze. The cold snap caused power plants and natural gas facilities to fail, leading to blackouts around the state and at least 200 deaths.

The February 2021 disaster “exposed the inability of the state’s energy supply chain to withstand extremely cold temperatures,” the Federal Reserve Bank of Dallas observes. The bank adds that “questions remain whether the electrical grid is now more resilient to winter weather.”

Although the grid has held up during this year’s heat wave, some observers wonder how long the grid can handle record-setting demand and still keep the lights (and air conditioning) on. So far, an abundance of wind and solar power has rescued Texas from the same fate that crippled the state in February 2021.

All eyes then and now are on the quasi-governmental Electric Reliability Council of Texas (ERCOT), which delivers power to about 90 percent of the state.

Since ERCOT’s winter debacle two years ago, state officials have beefed up weatherization requirements for power generation, power transmission, and natural gas facilities. Meanwhile, ERCOT underwent a management overhaul and bumped up its backup supply of thermal power.

During the state legislative session in 2021, a measure that would have earmarked $2 billion for weatherization of Texas power facilities passed in the House but stalled in the Senate.

This year, Texas lawmakers created a fund containing as much as $10 billion for loans and grants to encourage construction and maintenance of gas-fueled power plants. Gov. Greg Abbott signed that bill. But separate legislation that would have set aside billions of dollars to build a network of gas-powered backup plants died in the House.

A report published in 2022 by Rice University’s Baker Institute for Public Policy faulted ERCOT for the previous year’s winter chaos but didn’t pin sole blame on the organization. The report recommended better coordination among state regulators regarding the power grid, including potential formation of a state agency dedicated solely to energy issues. Today, the Texas Railroad Commission and Public Utility Commission of Texas largely share oversight of energy matters in the state.

“All forms of generation capacity experienced failures,” says the institute’s report on the 2021 winter catastrophe, “but bureaucratic failure in identifying and addressing risks along fuel supply chains was a major failure.”

Rising temps could result in rolling brownouts this summer–unless we work together to reduce the strain on the electric grid. Photo via Shutterstock

NERC warns of summer energy shortfalls–what you can do now

THINGS ARE HEATING UP

The North American Electric Reliability Council (NERC) issued a warning with the 2023 Summer Reliability Assessment yesterday – energy shortages could be coming this summer for two-thirds of North America if temperatures spike higher than normal.

“Increased, rapid deployment of wind, solar and batteries have made a positive impact,” Mark Olson, NERC’s manager of reliability assessments says in the release. “However, generator retirements continue to increase the risks associated with extreme summer temperatures, which factors into potential supply shortages in the western two-thirds of North America if summer temperatures spike.”

For Texans, the combined risk of drought and higher-than-normal temperatures could stress ERCOT system resources, especially in the case of reduced wind. But before there’s a mad rush on generators, keep in mind, electricity consumers can take simple actions to minimize the possibility of widespread shortfalls.

Electricity demand begins rising daily around 2 P.M. in the summer and peaks in the final hours of daylight. These hours are generally not only the warmest hours of the day but also the busiest. People return from work to their homes, crank down the air conditioner, turn on TVs, run a load of wash, and prepare meals using multiple electric-powered appliances.

If everyone takes one or two small steps to avoid unnecessary stress on the grid in the hours after coming home from work, we can prevent energy shortfalls. Modify routines now to get into the habit of running the dishwasher overnight, using the washer and dryer before noon or after 8 pm and pulling the shades down in the bright afternoon hours of the day.

Try to delay powering up devices – including EVs – until after dark. Turn off and unplug items to avoid sapping electricity when items are not in use. And if you can bear it, nudge that thermostat up a couple of degrees.

Energy sustainability demands consistent collaboration and coordination from every consumer of energy. Let’s get in the habit of acting neighborly now with conservative electricity practices before we start seeing temperatures–of both the literal and figurative kind–flare.

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Eyeing demand growth, ERCOT calls for energy investments across Texas

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With the Electric Reliability Council of Texas forecasting a big spike in demand for electricity over the next five to seven years, the operator of Texas’ massive power grid is embracing changes that it says will yield a “tremendous opportunity” for energy investments across the state.

The council, known as ERCOT, now estimates an extra 40,000 megawatts of growth in demand for electricity by 2030 compared with last year’s outlook. According to ERCOT data, 40,000 megawatts of electricity would power roughly 8 million Texas homes during peak demand.

ERCOT has been under intense scrutiny in the wake of recent summertime and wintertime debacles involving power emergencies or outages. The organization manages 90 percent of Texas’ power supply.

“As a result of Texas’ continued strong economic growth, new load is being added to the ERCOT system faster and in greater amounts than ever before,” Pablo Vegas, president and CEO of ERCOT, says in a news release. “As we develop and implement the tools provided by the prior two [legislative sessions], ERCOT is positioned to better plan for and meet the needs of our incredibly fast-growing state.”

Meeting the increased demand will create opportunities for energy investments in Texas, says ERCOT. These opportunities will undoubtedly lie in traditional energy production as well as in renewable energy segments such as solar, wind, and “green” hydrogen.

Some of the opportunities might be financed, at least in part, by the newly established Texas Energy Fund. The fund, which has been allotted $5 billion for 2025-26, will provide loans and grants for construction, maintenance, modernization, and operation of power-generating facilities in Texas.

ERCOT is also working with partners to develop tools aimed at improving grid reliability and market efficiency.

ERCOT says changes in its operations that’ll be required to fulfill heightened demand for power will position the nonprofit organization “as a significant component of the economic engine driving the national economy.”

Katy-based US Silica agrees to go private in $1.85B acquisition by asset management firm

M&A move

U.S. Silica has agreed to go private in an all-cash acquisition by Apollo Global Management, a New York asset management firm that primarily invests in alternative assets. The deal values the industrial minerals company at about $1.85 billion.

In a Friday announcement, U.S. Silica said that shareholders would receive $15.50 in cash for each share owned as of the deal's closing. Once the deal closes, U.S. Silica's stock will no longer be listed on the New York Stock Exchange.

Founded in the late 1800s, U.S. Silica produces commercial silica used in the oil and gas industry and other industrial applications. It operates 26 mines and processing facilities and two additional exploration stage properties.

The Katy, Texas-based company is still set to operate under the U.S. Silica name and brand, and will continue to be led by its current CEO Bryan Shinn. In a prepared statement, Shinn said that partnering with Apollo will give U.S. Silica “significant resources, deep industry expertise and enhanced flexibility as a private company."

U.S. Silica said that the transaction — which has been unanimously approved by its board of directors — is expected to close in the third quarter, subject to regulatory approval and other customary conditions.

The agreement also includes a 45-day “go-shop” period that allows U.S. Silica to seek out other proposals until June 10.

Shares of U.S. Silica Holdings Inc. climbed nearly 20 percent Friday morning, shortly after the company reported net income of $13.7 million for its first quarter. The commercial silica producer posted revenue of $325.9 million in the period.

Apollo Global Management's stock was up about 0.18 percent.

From events to a new climate-focused report, here are 3 things to know in Houston energy transition news

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Editor's note: Dive headfirst into the new week with three quick things to catch up on in Houston's energy transition: a roundup of events not to miss, a new study puts a dollar sign to Texas' disasters per capita, and three organizations are teaming up for an August event.

When it comes to weather-related events, Texas is expensive

Texas — home to everything from tornadoes to hurricanes — cracks the top 10 of a new report ranking states based on impact from weather-related events.

SmartAsset's new report factored in a myriad of data from the Federal Emergency Management Agency to identify which states face the most financial risk due to various weather events. In the report, the states were ranked by the total expected annual financial losses per person. Texas ranked at No. 10. In Texas, the total expected annual loss per person is estimated as $283.15. Click here to see that figure broken down.

3 organizations in Houston receive funding for DOE-backed programming

Later this year, a Wells Fargo Foundation-backed event that's co-administered by the United States Department of Energy's National Renewable Energy Laboratory will feature programming from three Houston organizations.

The Wells Fargo Innovation Incubator, a $50 million program, announced its eighth cycle of IN2 Channel Partner Strategic Awards. The program is distributing $767,000 across 15 organizations within the Channel Partner network to create impactful workshops at the upcoming Camp Cleantech event in August at CSU Spur in Denver, Colorado.

Houston-based Rice Alliance Clean Energy Accelerator, as well as Activate Global and Greentown Labs, which each have Houston locations, have been named among the awards recipients. The organizations will present workshops aimed at providing critical tools and insights for clean tech startups. Read more about the event and grants.

Events not to miss

Put these Houston-area energy-related events on your calendar.

Center for Houston’s Future and the Houston Energy Transition Initiative present a panel and attendee Q&A on Wednesday, May 1, from 9 to 11 a.m. at Partnership Tower 701 Avenida de las Americas, Suite 900. The program will be on the National Petroleum Council’s new report on hydrogen: “Harnessing Hydrogen: A Key Element of the U.S. Energy Future.” Register.
Offshore Technology Conference returns to Houston May 6 to 9. Register.
Greentown Houston's next Transition on Tap, a monthly networking event, is Wednesday, May 8. Register.
The University of Houston is hosting a professional-level course focused on hydrogen. The course is open for registration now, and the orientation event will take place on May 15. Learn more.

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