Reshaping the Texas grid: The impact of EVs, AI, renewables, and extreme weather

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While our grid may be showing its age, this is the perfect time to shift from reacting to problems to getting ahead of them.

Did you catch those images of idle generators that CenterPoint had on standby during Hurricane Beryl? With over 2 million people in the Houston area left in the dark, many were wondering, "if the generators are ready, why didn’t they get used?" It seems like power outages are becoming just as common as the severe storms themselves.

But as Ken Medlock, Senior Director of the Baker Institute Center for Energy Studies (CES) explains, it's not a simple fix. The outages during Hurricane Beryl were different from what we saw during Winter Storm Uri. This time, with so many poles and wires down, those generators couldn’t be put to use. It’s a reminder that each storm brings its own set of challenges, and there’s no one-size-fits-all solution when it comes to keeping the lights on. While extreme weather is one of the leading threats to our electric grid, it's certainly not the only one adding strain on our power infrastructure.

The rapid rise of artificial intelligence (AI) and electric vehicles (EVs) is transforming the way we live, work, and move. Beneath the surface of these technological marvels lies a challenge that could define the future of our energy infrastructure: they all depend on our electrical grid. As AI-powered data centers and a growing fleet of EVs demand more power than ever before, our grid—already under pressure from extreme weather events and an increasing reliance on renewable energy—faces a critical test. The question goes beyond whether our grid can keep up, but rather focuses on how we can ensure it evolves to support the innovations of tomorrow without compromising reliability today. The intersection of these emerging technologies with our aging energy infrastructure poses a dilemma that policymakers, industry leaders, and consumers must address.

Julie Cohn, Nonresident Fellow at the Center for Energy Studies at the Baker Institute for Public Policy, presents several key findings and recommendations to address concerns about the reliability of the Texas energy grid in her Energy Insight. She suggests there’s at least six developments unfolding that will affect the reliability of the Texas Interconnected System, operated by the Electric Reliability Council of Texas (ERCOT) and the regional distribution networks operated by regulated utilities.

Let’s dig deeper into some of these issues:

AI

AI requires substantial computational power, particularly in data centers that house servers processing vast amounts of data. These data centers consume large amounts of electricity, putting additional strain on the grid.

According to McKinsey & Company, a single hyperscale data center can consume as much electricity as 80,000 homes combined. In 2022, data centers consumed about 200 terawatt-hours (TWh), close to 4 percent, of the total electricity used in the United States and approximately 460 TWh globally. That’s nearly the consumption of the entire State of Texas, which consumed approximately 475.4 TWh of electricity in the same year. However, this percentage is expected to increase significantly as demand for data processing and storage continues to grow. In 2026, data centers are expected to account for 6 percent, almost 260 TWh, of total electricity demand in the U.S.

EVs

According to the Texas Department of Motor Vehicles, approximately 170,000 EVs have been registered across the state of Texas as of 2023, with Texas receiving $408 million in funding to expand its EV charging network. As Cohn suggests, a central question remains: Where will these emerging economic drivers for Texas, such as EVs and AI, obtain their electric power?

EVs draw power from the grid every time they’re plugged in to charge. This may come as a shock to some, but “the thing that’s recharging EV batteries in ERCOT right now, is natural gas,” says Medlock. And as McKinsey & Company explains, the impact of switching to EVs on reducing greenhouse gas (GHG) emissions will largely depend on how much GHG is produced by the electricity used to charge them. This adds a layer of complexity as regulators look to decarbonize the power sector.

Depending on the charger, a single EV fast charger can pull anywhere from 50 kW to 350 kW of electricity per hour. Now, factor in the constant energy drain from data centers, our growing population using power for homes and businesses, and then account for the sudden impact of severe environmental events—which have increased in frequency and intensity—and it’s clear: Houston… we have a problem.

The Weather Wildcard

Texas is gearing up for its 2025 legislative session on January 14. The state's electricity grid once again stands at the forefront of political discussions. The question is not just whether our power will stay on during the next winter storm or scorching summer heatwave, but whether our approach to grid management is sustainable in the face of mounting challenges. The events of recent years, from Winter Storm Uri to unprecedented heatwaves, have exposed significant vulnerabilities in the Texas electricity grid, and while legislative measures have been taken, they have been largely patchwork solutions.

Winter Storm Uri in 2021 was a wake-up call, but it wasn’t the first or last extreme weather event to test the Texas grid. With deep freezes, scorching summers, and unpredictable storms becoming the norm rather than the exception, it is clear that the grid’s current state is not capable of withstanding these extremes. The measures passed in 2021 and 2023 were steps in the right direction, but they were reactive, not proactive. They focused on strengthening the grid against cold weather, yet extreme heat, a more consistent challenge in Texas, remains a less-addressed threat. The upcoming legislative session must prioritize comprehensive climate resilience strategies that go beyond cold weather prep.

“The planners for the Texas grid have important questions to address regarding anticipated weather extremes: Will there be enough energy? Will power be available when and where it is needed? Is the state prepared for extreme weather events? Are regional distribution utilities prepared for extreme weather events? Texas is not alone in facing these challenges as other states have likewise experienced extremely hot and dry summers, wildfires, polar vortexes, and other weather conditions that have tested their regional power systems,” writes Cohn.

Renewable Energy and Transmission

Texas leads the nation in wind and solar capacity (Map: Energy, Environment, and Policy in the US), however the complexity lies in getting that energy from where it’s produced to where it’s needed. Transmission lines are feeling the pressure, and the grid is struggling to keep pace with the rapid expansion of renewables. In 2005, the Competitive Renewable Energy Zones (CREZ) initiative showed that state intervention could significantly accelerate grid expansion. With renewables continuing to grow, the big question now is whether the state will step up again, or risk allowing progress to stall due to the inadequacy of the infrastructure in place. The legislature has a choice to make: take the lead in this energy transition or face the consequences of not keeping up with the pace of change.

Conclusion

The electrical grid continues to face serious challenges, especially as demand is expected to rise. There is hope, however, as regulators are fully aware of the strain. While our grid may be showing its age, this is the perfect time to shift from reacting to problems to getting ahead of them.

As Cohn puts it, “In the end, successful resolution of the various issues will carry significant benefits for existing Texas industrial, commercial, and residential consumers and have implications for the longer-term economic attractiveness of Texas. Suffice it to say, eyes will be, and should be, on the Texas legislature in the coming session.”

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Scott Nyquist is a senior advisor at McKinsey & Company and vice chairman, Houston Energy Transition Initiative of the Greater Houston Partnership. The views expressed herein are Nyquist's own and not those of McKinsey & Company or of the Greater Houston Partnership. This article originally ran on LinkedIn on September 11, 2024.

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According to a new report, the existing energy infrastructure of Texas makes it a great spot to lead the development of the hydrogen economy. Photo via Getty Images

Report: Texas is the best place to lead hydrogen economy

as the experts say

All signs point to Texas leading the development of a hydrogen market, says one new report out of Rice University.

The Baker Institute for Public Policy released a new report this week about the hydrogen economy and the role Texas will play in it. According to the experts, Texas’ legacy energy industry — as well as its geology — makes it an ideal hub for hydrogen as an energy source. Ken Medlock, senior director of the Baker Institute’s Center for Energy Studies, and Shih Yu (Elsie) Hung, research manager at the center, wrote the report.

“Texas is in a very advantageous position to play a leading role in driving hydrogen market growth, but the evolution of policy and market structure will dictate whether or not this comes to pass,” write the co-authors.

Medlock and Hung make the case for hydrogen's impact on the energy transition in the report.

“It can be produced in a number of different ways — including steam-methane reforming, electrolysis and pyrolysis — so it can leverage a variety of comparative advantages across regions,” they write.

The report explains that — with the state's existing and robust oil and gas infrastructure — Texas is the best spot to affordably develop hydrogen while managing economic challenges. Plus, Texas's coastal geology is an advantageous spot for storage and transport.

One factor to be determined, write the authors, is whether or not the policy will support the industry's growth.

“(Hydrogen’s) expansion as an energy carrier beyond its traditional uses in industrial applications will depend heavily on significant investment in infrastructure and well-designed market structures with appropriate regulatory architectures,” they write. “A lack of either will risk coordination failure along hydrogen supply chains and, thus, threaten to derail any momentum that may currently be building.”

GTI Energy and The Cynthia and George Mitchell Foundation funded this report.

Last summer, the Center for Houston's Future reported how Houston-based assets can be leveraged to lead a global clean hydrogen innovation. The Houston region already produces and consumes a third of the nation’s hydrogen, according to the report, and has more than 50 percent of the country’s dedicated hydrogen pipelines. These assets can be utilized to accelerate a transition to clean hydrogen, and the report lays out how.

"Using this roadmap as a guide and with Houston’s energy sector at the lead, we are ready to create a new clean hydrogen economy that will help fight climate change as it creates jobs and economic growth,” says Center for Houston’s Future CEO Brett Perlman. “We are more than ready, able and willing to take on these goals, as our record of overwhelming success in energy innovation and new market development shows.”

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This article originally ran on InnovationMap.

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Energy AI startup chooses Houston for first U.S. office after $20M raise

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London-based AI firm Applied Computing has announced a $20 million Series A round and a new office in Houston.

The new Bayou City office is Applied Computing’s first in the United States and part of its North American expansion. The company is known for its Orbital AI platform, which is tailored for energy operations.

The funding round was led by Houston-based KBR Inc., with participation from San Francisco-based Databricks Ventures. KBR’s investment was first announced in March.

KBR and Applied Computing have also entered into a multi-year agreement to deliver exclusive AI products for the energy sector. KBR already has integrated Orbital into its INSITE 3.0 platform for energy projects, and is also using the product for ammonia production.

Applied Computing’s Orbital platform combines physics-grounded intelligence with models across chemical engineering, time-series forecasting and language, according to the company. The system analyzes sensor readings and can recognize a facility’s equipment constraints and operator activity. The platform can also allow technicians to run simulations of how a change to a facility could affect the rest of its operations.

According to TechCrunch, Applied Computing will use the $20 million to further explore projects and deployments with the energy sector, hire engineering and research positions, and continue to expand internationally, potentially into the Middle East.

The company is also working on deals with a major U.S. stream operator, TechCrunch reports. And Applied Computing shared on LinkedIn that it plans to announce its first partnership with a major European oil company in the coming weeks.

“Yesterday we showed Orbital live in deployments at our demo day at the Energy Institute in London,” Callum Adamson, CEO and co-founder of Applied Computing, posted on LinkedIn on July 16. “Today, we're announcing the capital to scale it globally as well as the launch of our new offices in Houston and Bangalore. In the weeks following, there will be more announcements on our progress, partnerships and deployments.”

The company opened its Bangalore offices in December.

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This article originally appeared on our sister site, InnovationMap.com.

Automakers enter the energy space with vehicles offering backup power

Power Boost

Winter Storm Uri, the multiday freeze that slammed Texas in February 2021 and pummeled the state's power grid, has been on Kenneth Kovar's mind ever since. Though the resident of New Braunfels didn't lose power at the time, he wasn't able to run his septic tank — it is independent from local systems. He had to fill his toilets with water from his backyard pool.

So when Kovar, 64, bought a Ford F-150 last fall, his hope was to be better prepared for any new crisis.

“I was interested in trying to find some sort of power backup situation,” he said.

Now, Kovar has a setup from Ford that allows drivers of certain F-150 models to plug their vehicle directly into their electric meter to power parts of their home during an outage.

It is the latest example of automakers broadly adapting their electrification technologies to the home energy business, especially as demand on the grid increases and sales of electric vehicles slow. Car companies are looking to leverage their multibillion dollar EV investments to tap into a promising market in vehicle, home and grid technology, both for backup power and for supporting electrical grid resiliency.

“They’re trying to look for other businesses that they might sell into,” said Parth Vaishnav, assistant professor of sustainable systems at the University of Michigan.

Ford's latest connects F-150 drivers to their meter

Drivers of the F-150 PowerBoost hybrid and F-150 Lightning electric pickup trucks can now plug in a one-foot long adapter to a 240-volt outlet onboard. That adapter — which Ford made with company Global Power Products — makes the vehicle compatible to plug into a longer, separate cable. That cable connects to a transfer switch installed directly on one's electric meter.

Through the adapter and cable series, homeowners can connect their vehicle essentially right to their home’s breaker box. The homeowner simply turns on and off which breaker switches they want for which devices they want powered.

“The way we think about it, especially for customers who already have a compatible vehicle is, you already own the power source, it’s in your driveway,” said Amanda Roraff, Ford's grid and energy services business acceleration lead.

The Lightning might provide power for two to three days, depending on what home devices are being used, and the PowerBoost Hybrid, up to five days on a single tank of gas.

The automaker says its solution is a less expensive way to supply backup power. Conventional, diesel-powered portable generators and full-home standby setups require expensive installation, costing several thousands of dollars. This solution, which also requires professional installation at the meter, starts around $1,100.

The setup only applies to about 200,000 vehicles so far, and it is also exclusively for outages. Ford also offers its Home Integration System for bidirectionality, sending power both from the vehicle to the home and from the home to the vehicle, while also being able to feed the grid.

The capability is an important lifeline amid EV sales slowdown

Not only is this business critical amid growing grid demand and increasing power outages, experts say automakers need to pivot with the EV market less active under current U.S. federal policy. Pure EV sales in the U.S. year-over-year are down 23.8%, according to a July Cox Automotive report on the first half of 2026. This demonstrates what an asset that EV and hybrid ownership can be.

The tech is not without challenges.

On the industry side, these systems have to undergo third-party testing to ensure they meet safety standards, and the vehicle and the charger need to be programmed to communicate. It also requires the approval of the utility where the capability is being used. It could take years to get an interconnect agreement.

On the customer side, homeowners need to understand their vehicles' abilities and how to self-manage their system. It also just brings another generator of power into the home mix.

Still, experts see opportunity, especially with interest in EV sales high outside of the U.S.

“We already know during an outage, its impact, providing electricity to the home,” said Scott Samuelsen, engineering professor emeritus at the University of California, Irvine. “This is going to become very, very popular.”

Rice, UH join major quantum, nuclear energy initiatives

energy impact

Rice University and the University of Houston will be playing a part in the future of energy in Texas and beyond, as Rice has joined the U.S. Department of Energy Quantum Science Center and UH has been added to the Texas Nuclear Alliance.

Rice’s role with the DOE Quantum Science Center will expand the university’s work in helping to develop “fault-tolerant quantum computers capable of solving scientific problems,” according to Rice. Tirthak Patel, an assistant professor of computer science, will develop and evaluate quantum error-correction decoding methods on high-performance computing platforms. Patel’s team will receive $900,000 over 5 years from a DOE-funded center at Oak Ridge National Laboratory.

The Quantum Science Center was established in 2020 under the National Quantum Initiative Act, and brings together national laboratories, universities and industry partners like IBM, AMD, IQM, Quantinuum and Riverlane, and others to advance quantum information science. The Quantum Science Center is one of the DOE’s five National Quantum Information Science Research Centers, and has planned funding of $125 million over 5 years.

“Reliable error correction is one of the biggest challenges in making quantum computing useful for accelerating scientific discovery,” Patel said in a news release. “Our work is focused on developing methods that can scale to future systems and support practical scientific applications.”

Meanwhile, as power demand continues to rise in Texas and North America, the Texas Nuclear Alliance brings industry, academic, and government leaders together to advance nuclear technologies to meet growing energy demands, support economic efforts, bolster domestic manufacturing, and protect overall energy security.

UH brings expertise to the Texas Nuclear Alliance from UH Energy, the Texas Center for Superconductivity at UH (TcSUH), and the Advanced Manufacturing Institute (AMI). UH says that 11 of its 16 colleges will contribute research to the alliance.

“Texas and the University of Houston have long led the nation in energy innovation and research,” Ramanan Krishnamoorti, vice president of energy and innovation, said in a news release. “As demand for reliable, affordable and secure energy continues to grow, advanced nuclear technologies will become increasingly important. The University of Houston is uniquely positioned to contribute through world-class research and deep industry partnerships that help transform breakthrough discoveries into real-world solutions. We look forward to working with the Texas Nuclear Alliance to accelerate technologies that will shape the future of the energy industry.”

Projects from both Rice and UH were selected this week to participate in the DOE's Genesis Mission. Read more here.

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