ERCOT steps up grid innovation efforts to support growing power demand

grid boost

ERCOT has launched its new Grid Research, Innovation, and Transformation (GRIT) initiative to help resolve grid challenges and meet growing demand. Photo via Getty Images

As AI data centers gobble up more electricity, the Electric Reliability Council of Texas (ERCOT) — whose grid supplies power to 90 percent of Texas — has launched an initiative to help meet challenges presented by an increasingly strained power grid.

ERCOT, based in the Austin suburb of Taylor, said its new Grid Research, Innovation, and Transformation (GRIT) initiative will tackle research and prototyping of emerging technology and concepts to “deeply understand the implications of rapid grid and technology evolution, positioning ERCOT to lead in the future energy landscape.”

“As the ERCOT grid continues to rapidly evolve, we are seeing greater interest from industry and academia to collaborate on new tools and innovative technologies to advance the reliability needs of tomorrow’s energy systems,” ERCOT President and CEO Pablo Vegas said in a news release. “These efforts will provide an opportunity to share ideas and bring new innovations forward, as we work together to lead the evolution and expansion of the electric power grid.”

In conjunction with the GRIT initiative, ERCOT launched the Research and Innovation Partnership Engagement (RIPE) program. The program enables partners to work with ERCOT on developing technology aimed at resolving grid challenges.

To capitalize on ideas for grid improvements, the organization will host its third annual ERCOT Innovation Summit on March 31 in Round Rock. The summit “brings together thought leaders across the energy research and innovation ecosystem to explore solutions that use innovation to impact grid transformation,” ERCOT said.

“As the depth of information and industry collaboration evolves, we will continue to enhance the GRIT webpages to create a dynamic and valuable resource for the broader industry to continue fostering strong collaboration and innovation with our stakeholders,” said Venkat Tirupati, ERCOT’s vice president of DevOps and grid transformation.

ERCOT’s GRIT initiative comes at a time when the U.S. is girding for heightened demand for power, due in large part to the rise of data centers catering to the AI boom.

A study released in 2024 by the Electric Power Research Institute (EPRI) predicted electricity for data centers could represent as much as 9.1 percent of total power usage in the U.S. by 2030. According to EPRI, the share of Texas electricity consumed by data centers could climb from 4.6 percent in 2023 to almost 11 percent by 2030.

A report issued in 2024 by the federal government’s Lawrence Berkeley National Laboratory envisions an even faster increase in data-center power usage. The report projected data centers will consume as much as 12 percent of U.S. electricity by 2028, up from 4.4 percent in 2023.

In 2023, the EPRI study estimated, 80 percent of the U.S. electrical load for data centers was concentrated in two states, led by Virginia and Texas. The University of Texas at Austin’s Center for Media Engagement reported in July that Texas is home to 350 data centers, second only to Virginia.

“The U.S. electricity sector is working hard to meet the growing demands of data centers, transportation electrification, crypto-mining, and industrial onshoring, while balancing decarbonization efforts,” David Porter, EPRI’s vice president of electrification and sustainable energy strategy, said. “The data center boom requires closer collaboration between large data center owners and developers, utilities, government, and other stakeholders to ensure that we can power the needs of AI while maintaining reliable, affordable power to all customers.”

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A new white paper from the University of Houston cautions that Texas faces a potential electricity shortfall of up to 40 gigawatts annually by 2035 if the grid doesn’t expand. Photo courtesy UH.

New UH white paper details Texas grid's shortfalls

grid warning

Two University of Houston researchers are issuing a warning about the Texas power grid: Its current infrastructure falls short of what’s needed to keep pace with rising demand for electricity.

The warning comes in a new whitepaper authored by Ramanan Krishnamoorti, vice president of energy and innovation at UH, and researcher Aparajita Datta, a Ph.D candidate at UH.

“As data centers pop up around the Lone Star State, electric vehicles become more commonplace, industries adopt decarbonization technologies, demographics change, and temperatures rise statewide, electricity needs in Texas could double by 2035,” a UH news release says. “If electrification continues to grow unconstrained, demand could even quadruple over the next decade.”

Without significant upgrades to power plants and supporting infrastructure, Texas could see electricity shortages, rising power costs and more stress on the state’s grid in coming years, the researchers say. The Electric Reliability Council of Texas (ERCOT) grid serves 90 percent of the state.

“Texas, like much of the nation, has fallen behind on infrastructure updates, and the state’s growing population, diversified economy and frequent severe weather events are increasing the strain on the grid,” Datta says. “Texas must improve its grid to ensure people in the state have access to reliable, affordable, and resilient energy systems so we can preserve and grow the quality of life in the state.”

The whitepaper’s authors caution that Texas faces a potential electricity shortfall of up to 40 gigawatts annually by 2035 if the grid doesn’t expand, with a more probable shortfall of about 27 gigawatts. And they allude to a repeat of the massive power outages in Texas during Winter Storm Uri in February 2021.

One gigawatt of electricity can power an estimated 750,000 homes in Texas, according to the Texas Solar + Storage Association.

The state’s current energy mix includes 40 percent natural gas, 29 percent wind, 12 percent coal, 10 percent nuclear and eight percent solar, the authors say.

Despite surging demand, 360 gigawatts of solar and battery storage projects are stuck in ERCOT’s queue, according to the researchers, and new natural gas plants have been delayed or withdrawn due to supply chain challenges, bureaucratic delays, policy uncertainties and shifting financial incentives.

Senate Bill 6, recently signed by Gov. Greg Abbott, calls for demand-response mandates, clearer rate structures and new load management requirements for big users of power like data centers and AI hubs.

“While these provisions are a step in the right direction,” says Datta, “Texas needs more responsive and prompt policy action to secure grid reliability, address the geographic mismatch between electricity demand and supply centers, and maintain the state’s global leadership in energy.”

Engie and CBRE IM have partnered on a portfolio of 31 projects in ERCOT and California-based CAISO territories. Photo via Getty Images

Engie partners on major Texas, California battery storage portfolio

power partners

Houston’s Engie North America has partnered with New York-based CBRE Investment Management on a 2.4-gigawatt portfolio of battery storage assets in Texas and California.

The portfolio consists of 31 projects operating in the Electric Reliability Council of Texas (ERCOT) and California Independent System Operator (CAISO) territories. According to a company statement, the transaction represents one of Engie’s largest operating portfolio partnerships in the U.S.

“We are delighted that ENGIE and CBRE IM are partnering in this industry-leading transaction, supporting 2.4 GW of storage that will support the growing demand for power in Texas and California,” Dave Carroll, Chief Renewables Officer and SVP, ENGIE North America, said in the news release.

The deal is also one of the sector’s largest sales completed to date. Engie will retain a controlling share in the portfolio and will continue to operate and manage the assets.

“The scale of this portfolio reflects ENGIE’s commitments to meeting the energy needs of the U.S. and increasing the resilience of the ERCOT and CAISO grids,” Carroll added in the news release. “CBRE IM’s investment reflects their confidence in ENGIE’s proven track record in developing, building, operating and financing renewable assets, both in North America and globally.”

In North America, ENGIE currently has more than 11 gigawatts of renewable production and battery storage in operation or construction. Last year, Engie added 4.2 gigawatts of renewable energy capacity worldwide, bringing the total capacity to 46 gigawatts as of December 31. It also recently made a preliminary deal to supply wind power to a Cipher Mining data center in Texas.

As of March 31, 2025, CBRE IM had $149.1 billion in assets under management and operated in 20 countries.

“We are excited to partner with ENGIE on this high-quality, scaled battery storage portfolio with a strong operating track record,” Robert Shaw, managing director, private infrastructure strategies at CBRE Investment Management, said in the release.

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Texas awards $73M for Houston-area grid resilience project

grid funding

Texas Gov. Gregg Abbott announced millions in funding for energy resilience projects around this state this week, with one major project set to impact the greater Houston area.

As part of the Texas Energy Fund's Outside of ERCOT Grant Program, the state announced a roughly $73 million agreement with the Sam Houston Electric Cooperative to replace and upgrade more than 9,000 electric poles and improve other equipment in Montgomery, Liberty and Hardin counties. The agreement is the first for the fund's Outside of ERCOT Grant Program, which supports state projects outside of the state's largest grid.

The multibillion-dollar Texas Energy Fund aims to "finance the construction, maintenance, and modernization of electric facilities across Texas." It was approved by voters in 2023. Other programs within the fund include the:

In-ERCOT Generation Loan Program
Completion Bonus Grant Program
Texas Backup Power Package Program

“The Texas Energy Fund delivers real results for Texans and strengthens the electric systems that families, businesses, and communities depend on,” Abbott said in a news release. “This grant to Sam Houston Electric Cooperative will replace thousands of vulnerable utility poles to better withstand severe weather and ensure a more reliable and resilient grid in East Texas.”

The Houston-area project, nicknamed Steel Anchor, is expected to be completed by June 2031. According to the release from the governor's office, the Sam Houston Electric Cooperative’s territory is one of the most hurricane-prone service areas in the state. The cooperative serves more than 38,000 Texas consumers

“Over the past decade, Sam Houston EC has strategically replaced poles to improve the strength of its electricity distribution system. This grant will boost the Cooperative’s ongoing grid-hardening and resiliency program,” Doug Turk, CEO of the Sam Houston Electric Cooperative, added in the release.

Following the announcement of the Sam Houston funding, Abbott's office also awarded another $200 million from the Outside of ERCOT Grant Program to upgrade approximately 700 miles of power equipment in Northeast Texas. The equipment is operated by Southwestern Electric Power Company, which serves more than 192,000 Texas consumers. The project will include improvements to 200 circuits, replacing aging copper wire with aluminum alloy conductors and replacing existing utility poles.

Additionally, the state announced its seventh Texas Energy Fund loan agreement for a 570 megawatt natural gas power plant in Sherman, Texas. The 20-year loan of up to $411 million is between the Public Utility Commission of Texas and Rayburn Electric Cooperative and is part of the fund's In-ERCOT Generation Loan Program. Rayburn will build the facility near its existing Rayburn Energy Station 1 in the Texoma region. It will connect to the ERCOT North Load Zone.

“When Texas voters overwhelmingly approved the Texas Energy Fund, they gave us a mandate to secure new, reliable power generation for Texas,” PUCT Chairman Thomas Gleeson added in a release. “The TxEF is delivering on that promise, and Rayburn Electric Cooperative’s new 570 MW power plant is proof. We are ensuring Texas families and businesses have power they can depend on for years to come.”

Solar manufacturer announces massive new facility in Houston area

coming soon

SEG Solar has announced plans to open a new 1.15 million-square-foot solar module facility in Tomball—its third in the Houston area.

The news comes just weeks after the Houston-based solar manufacturer announced its second facility, which will be located in Cypress. It’s expected to open in August.

The latest 4.6-gigawatt facility in Tomball will include an assembly factory and a warehouse. Construction is slated to wrap in March 2027, with commercial panel production planned to begin in May 2027. Once completed, the facility will bring SEG’s annual U.S. module manufacturing capacity to 10.6 gigawatts, according to a news release from the company, one of the largest totals in the country.

The facility will produce heterojunction technology (HJT) modules, which the company says will add to the number of n-type solar panels made in the U.S. HJT modules are known to be more durable and are well suited for hotter climates.

“Designed to support next-generation HJT technology and FEOC-compliant production, the facility ensures reliable, high-efficiency solar solutions,” Raymond Bailey, sales manager at SEG Solar, said in a LinkedIn post. “ Alongside upstream integration in Indonesia and potential U.S. cell manufacturing, we are strengthening supply chain resilience amid evolving trade policies.”

SEG opened its $60 million, 250,000-square-foot facility in Houston in 2024 to house its production workshops, raw material warehouses, administrative offices, finished goods warehouses, and supporting infrastructure. The continued expansion is part of SEG’s long-term goal of becoming one of the largest 100 percent U.S.-owned module manufacturers.

Houston chemical co. completes successful field trial of cleaner natural gas processing tech

successful trial

Houston-based Merichem Technologies has announced successful results from the field trial of its new hydrogen sulfide (H2S) removal technology in the Permian Basin.

The technology, known as ECOTREAT, removed more than 99 percent of hydrogen sulfide gas from natural gas streams, or “sour gas,” without producing solid waste during the month-long trial. It also showed sustained performance even when operating above the unit’s design capacity, according to a news release.

“The industry is continually seeking to reduce both the price and complexity of removing hydrogen sulfide from gas production, especially since oil production has shifted to increasingly sour sources, higher gas ratios, and higher water ratios,” Jeff Gomach, SVP, Merichem Technologies, said in a news release. “ECOTREAT met all its field trial objectives and provides a highly effective method for removing hydrogen sulfide to prevent equipment corrosion, ensure worker safety, meet environmental regulations, and maintain product quality for transport.

H2S found in natural gas can turn the gas toxic or hazardous and lead to corrosion in pipelines and processing equipment. However, standard H2S removal technologies create high levels of solid waste. ECOTREAT resolves many of those issues by using an aqueous-phase proprietary catalytic process that converts H2S into dissolved thiosulfate.

Next, Merichem says it plans to move the technology out of the pilot stage to full-scale commercialization.

Merichem, an 80-plus-year-old company, initially launched as a soap and industrial cleaning company. It eventually transitioned to focus on energy technology.

In 2024, Black Bay Energy acquired a portion of Merichem Process Technologies and Merichem Catalyst Products, which would become Merichem Technologies.

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