3 things to know this week: Energy startups announce big wins, evaluating the IRA's first year, and more

hou knew?

How the IRA is affecting clean energy project development, events not to miss, and more things to know this week. Photo via Getty Images

Editor's note: It's a new week — start it strong with three quick things to know in Houston's energy transition ecosystem. Three energy tech startups are celebrating big wins, experts evaluate the IRA's first year, and events not to miss this week.

Eyes on the IRA

How did the IRA affect energy transition project development? Experts discussed the positive impacts — as well as the challenges still to overcome. Photo courtesy of Renewable Energy Alliance Houston

August 16 marked one year of the Inflation Reduction Act's enactment, and many have taken this first anniversary as an opportunity to look back on its effectiveness and where it's fallen short.

For Carbon Clean, a United Kingdom-founded company, the IRA made all the difference in its expansion into the United States — by way of Houston.

"The impact of the IRA cannot be overstated for our industry, especially for point source carbon capture technology companies like Carbon Clean," Co-Founder, Chair, and CEO Aniruddha Sharma shares with EnergyCapital in an interview. "The momentum created by the law's passage, along with our existing activity in North America, led to the opening of our US headquarters in Houston in March this year. We will double our US headcount to meet demand for CycloneCC, our breakthrough, fully modular carbon capture technology."

At a recent event at Rice University, experts zeroed in on the effect on clean energy project development. While the IRA opened doors for new funding, it also revealed shortcomings when it came to permitting.

"The IRA for developers has been very positive. It provided certainty and allowed developers and investors alike to plan long term," says Omar Aboudaher, senior vice president of development for Leeward Renewable Energy. "With that comes challenges, including exacerbating some existing problems with permitting."

Energy tech startup wins

These three startups have something to celebrate. Photo via Getty Images

Three energy tech startups had some big wins last week — let's take a look.

Nauticus Robotics, a Houston-based tech company providing software and hardtech solutions for industrial and government entities, secured a $2.1 million contract extension with one of its biggest clients. Read more.
France-based Engie announced that it will acquire Houston-based battery storage startup Broad Reach Power in $1 billion deal. The company launched in 2019 with backing from EnCap Energy Transition, an arm of Houston-based private equity firm EnCap Investments. Read more.
Austin-based energy software company P6 Technologies closed a $3.25 million seed round of funding with support from a handful of Houston investors from GOOSE Capital, Artemis Energy Partners, Tupper Lake Partners, and Veritec Ventures. Read more.

Upcoming events to put on your radar

Mark your calendars. Photo via Getty Images

Plan the rest of your August accordingly.

August 28-30 — Industrial IMMERSIVE Week attracts the most industrial, energy, and engineering tech professionals making investment, strategy and tactical decisions, or building, scaling and executing pioneering XR/3D/Simulations, digital twin, reality capture, edge /spatial computing, AI/ML, connected workforce & IIoT projects within their enterprise.
August 30 — 2023 Energy Research Day will be a showcase of outstanding energy-related research by University of Houston graduate and postdoctoral students. Sponsored by the Division of Research and Graduate School, the event gives industries in the Greater Houston area a chance to see UH research up close and network with future collaborators.
August 30-31 — Carbon & ESG Strategies Conference, presented by Hart Energy, will highlight carbon capture and storage projects and technologies onshore and offshore, direct air capture, enhanced oil recovery, responsibly sourced gas, renewable natural gas, federal funding challenges and insurance issues, ESG initiatives, regulatory concerns and much more.

An Austin-based energy software company just scored funding from Houston investors. Photo via Getty Images

Houston VCs back energy software startup in $3.25M seed round

fresh funding

Houston-based investment firm Goose Capital led a $3.25 million round of seed funding revealed recently by Austin-based cleantech software company P6 Technologies.

Other participants in the round are Houston-based investment firms Artemis Energy Partners, Tupper Lake Partners, and Veritec Ventures. The seed round represents the first outside funding for P6, which maintains an office in Houston.

In conjunction with the seed funding:

Artemis founder and CEO Bobby Tudor has joined P6’s board of directors. He is an investor in Goose Capital.
Paal Kibsgaard, managing partner of Veritec, also has joined the P6 board. Kibsgaard is former chairman and CEO of Houston-based oilfield services company Schlumberger, which now does business as SLB.

Joe Berti, CEO of P6, says Kibsgaard’s “unparalleled experience” will benefit his company.

“Veritec’s strategic vision and active support of energy transition solutions align perfectly with our goals, and I am confident their contribution will be instrumental in shaping our future success,” Berti says in a news release.

Berti is former chief product officer of IBM’s sustainability software unit.

P6, founded in 2022, sells enterprise software to businesses in the energy, transportation fuel, and petrochemical sectors. The startup’s software for product lifecycle assessment enables measurement of the product-level intensity of greenhouse gas (GHG) emissions as energy companies try to achieve sustainability goals.

Tudor applauds P6 for helping fossil fuel-anchored companies reduce GHG emissions.

“Energy is the sector that needs a solution like P6 the most,” says Tudor. “P6 has the right approach and is going to make a step-change improvement to how product-level carbon intensity and GHG emissions are tracked today.”

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Property Showcase

Telsa eyes Houston area for $10 billion solar manufacturing plant

under review

Electric vehicle and clean energy company Tesla is considering building a new $10.1 billion solar cell manufacturing facility in Fort Bend County, according to documents filed with the Texas Comptroller’s Office.

If approved, the plant, called Project Sun City, would be located on a 3,050-acre site off FM 762 and FM 1994 in Richmond, Texas. Tesla aims to finish construction in 2028, with the plant being operational by early 2029.

The plant will manufacture photovoltaic (PV) solar cells and modules that can convert sunlight into electricity. PV Magazine reports that the facility is "the largest single manufacturing investment Tesla has proposed on paper."

Advisory and consulting firm Kroll submitted the documents to the Texas Comptroller of Public Accounts and noted if an agreement regarding tax incentives isn't reached, the project will exit Texas.

Tesla has requested credits under the Jobs, Energy, Technology, and Innovation (JETI) Act. The incentive program aims to attract large, capital-intensive economic development projects by lowering the property taxes an entity must pay over 10 years if it meets requirements related to job creation and investment. For example, pharmaceutical giant Bristol Myers Squibb Co. recently announced that its forthcoming $2.3 billion Houston-area manufacturing site is a qualified project under the JETI program.

Kroll predicts that the facility would create 9,712 new full-time jobs, over 1,100 construction jobs and billions of dollars in future property tax revenue, the documents show. Additionally, it says the project will spur $1.1 billion in local business expenditures and that Texas would increase its GDP by approximately $107 billion as a result of the project activities.

Tesla opened its $200 million Megafactory in Brookshire, Texas, last year. The company is continuing its goal to deploy 100 gigawatts of solar manufacturing in the U.S before the end of 2028. According to the U.S. Energy Information Administration, 100 gigawatts is equal to about 8 percent of the country's power grid capacity.

Houston researchers land $10M grant to study how climate change drives disease threats

climate health research

Researchers from Rice University, Baylor College of Medicine and the University of Texas School of Public Health have received a $10 million grant to support research and public education on how climate change is linked to public health.

The funding comes from North Carolina-based Burroughs Wellcome Fund and is known as the organization’s Climate + Health Excellence (CHEX) award. It will be used over the next five years to launch the new FORECAST initiative, led by Rice professors and co-investigators Sylvia Dee and Joseph Campan.

FORECAST will “study how a rapidly changing environment and weather drive the emergence and expansion of deadly pathogens in human populations,” according to a release from Rice.

“This grant supports novel research linking climate change projections to health care solutions while simultaneously ensuring the next generation of scientists, leaders and policymakers have the training to assess and respond to the climate change risks that we already know are increasing every year,” Dee said in the release.

The funding will go toward a variety of new initiatives and centers.

At Rice, the funding will help launch the new Center for Climate and Environmental Health, as well as cross-campus multidisciplinary collaborations, seed grants, postdoctoral and graduate positions, and more, according to the university.

The grant will also support the statewide “Middle to Medical” climate-health educational program for youth. The program will focus on teaching how pathogens spread and how climate change plays a role in the process.

“FORECAST will prepare youth across Texas to make informed health decisions that protect themselves and their families and communities from extreme weather and disease-related risks,” Nancy Moreno, a professor of education, innovation and technology at Baylor College of Medicine and co-investigator on this grant, added in the release.

Anthony Maresso, professor of molecular virology and microbiology at Baylor College of Medicine, will share expertise in viral pathogen sewage detection that was developed during the COVID-19 pandemic; while Eric Boerwinkle, dean of the UT School of Public Health, will share insights from the Texas Wastewater Environmental Biomonitoring Network, which tracks disease-causing viruses and bacteria by testing wastewater weekly at Texas sites.

“Hotter days, bigger storms, new disease threats — Texas’s future demands preparation,” Boerwinkle added in the release. “With support from the Burroughs Wellcome Fund, the FORECAST team is helping Texas detect threats earlier and respond faster, saving lives and strengthening our economy.”

EV surge could shutter 40 refineries by 2040, Wood Mackenzie report warns

ev outlook

The rise of electric vehicles could spell trouble for Houston’s oil and gas sector, a new report suggests. But the oil and gas industry stands to benefit from potential sluggishness in U.S. adoption of EVs.

If worldwide EV adoption rises as expected, global oil demand could fall by five million barrels per day by 2040, accelerating the closure of about 40 oil refineries, says the report, published by energy research and consulting firm Wood Mackenzie. The firm’s North American hub is in Houston.

Those closures might spell trouble for refinery operators with a sizable Houston-area presence, including BP, ExxonMobil, Marathon, Saudi Aramco, and Valero. In 2025, the five companies collectively earned roughly $33 billion from downstream operations, including refineries. One caveat: Each company assigns a different definition to “downstream.”

Refineries in Organization for Economic Co-operation and Development (OECD) countries, including the U.S. but excluding Middle Eastern heavyweights, “are most at risk due to their high energy costs and carbon prices,” the Wood Mackenzie report says.

On the flip side, an abundant U.S. oil supply means American drivers have less of an incentive to switch from traditional cars to electric vehicles, despite stubbornly high fuel prices, according to the report.

Wood Mackenzie predicts EVs will account for 20 percent of the U.S. personal and commercial vehicle fleet in 2040, up from three percent in 2025. That compares with a global forecast of 25 percent in 2040, up from 4 percent last year.

Another U.S. roadblock to EV adoption cited in the report: the country’s relative lack of advanced battery manufacturing.

“Without advanced battery technologies, the U.S. auto sector is at risk of ceding its home market to non-Chinese EVs and falling behind competitors internationally,” the report says.

Furthermore, according to the report, Chinese investment in EV manufacturing in the U.S. probably will remain a no-go and tariffs on Chinese EV imports likely won’t be lifted, even if Democrats resurrected EV incentives following a White House win in 2028.

“Competition among EV manufacturers in international markets will only intensify,” the report notes. “Companies that can offer competitive products in high-growth markets will be best positioned for long-term success.”

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