The Texas Legislature concluded biennial sessions Without giving away a large amount of invoice It could have killed the state’s Boom Solar and Battery Sectorand, in addition, the ability to maintain Texas Grid running in extreme weather And then there was a surge in demand for electricity.
It passed legislation that could enhance the reliability of state electricity by promoting the construction of more microgrids – a combination of small-scale gas-fired power generation, solar and batteries that can be built quickly. Last week, Texas Senator Approved the long-awaited $1.8 billion fund To support the deployment of microgrids at hospitals, nursing homes, water treatment plants, police and fire departments, and other critical facilities throughout the state.
Texas Backup Power Package Program Since 2023, we have been waiting for funds since when it was created Some of the broader legislative packages. The goal is to help Texans protect themselves from extreme weather-driven grid emergencies like a disastrous blackout Winter Storm Wool 2021,or Wide power outages since Hurricane Beryl in 2024.
However, lawmakers failed to approve $1.8 billion in microgrid funds in 2023. Instead, the state moved forward with $5 billion for the Texas Energy Fund. It offers low interest rate loans to developers of large gas-fired power plants. The program I had a hard time. That was one of the projects that applied for funding. It turns out to be fraudulent. Others did Denied loan. and More projects I have it I’ve been eliminated from the competitionso that developers handle the same thing Gas turbine shortage and Cost rise It is the construction of gas across the country.
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This year, lawmakers ultimately approved the microgrid funding. This is part of the spending that is part of the remaining $5 billion in the Texas Energy Fund, and was officially approved during a slightly tied session. That’s a big deal, says Doug Lewin, president and author of Stoic Energy, a Texas-based energy consultancy. Texas Energy and Power Newsletter.
“Now these funds are probably starting to flow, and I think it’ll put us in the upper echelons of the state for microgrid policies,” he said.
Inside Failed invoice This session faced with opposition From the Environment, Business and Consumer Group There were two – SB 388 and SB 715 -It would have been forced to pay for new solar, wind and battery projects a large amount of new capacity from the fossil gas power plant.
Such policy issues are not merely Mis-aware Build gas power plants that warm more planets Ensures a more reliable gridindustry experts say. And so are companies like that Gas power plants cannot be built quickly enough To meet not only Texas, but also booming energy needs Nationwide. These bills have become blocks for many gigawatts of new solar, wind and battery developments in the state as gas power plants must be built along with renewable energy.
“One of the most important things that this session has happened is this very broad business coalition that communicates with those who have heard that these policies trying to limit the development of renewable energy are useless,” Lewin said.
Low-cost electricity from renewable energy and batteries is “a big deal for the oil and gas industry, which has been working with manufacturers, industrial customers and diesel generators for decades and is now connected to the grid,” he said.
Realizes microgrids
For years, Lewin has urged state leaders to focus on helping customers save energy and continue to flow electricity during hurricanes, heat waves and winter storms. He thinks microgrids are a good way to do that.
If a wider grid works well, facilities equipped with microgrids can use solar, batteries and generators to reduce grid power usage. However, when the grid goes down or gets seriously stressed, those facilities can rely on those resources to continue running.
Microgrids also help meet ballooning electricity demands from homes, businesses, factories, and especially from data centers that make up the AI ​​boom. A large portion of future load growth Predictions, he said. The Texas Electric Reliability Council, the state’s grid operator, predicts that electricity demand could peak in April More than doubled over the next five years. The number of data centers to be built in Texas will ultimately determine the new electricity the state actually needs.
The microgrid program limits individual projects to less than 2.5 megawatts, Lewin said. This is much smaller than the capacity of hundreds of megawatts that could come from a single gas-fired power plant. But because microgrid projects lack the size to compensate for at speeds of construction, many small backup power projects will do more to meet demand than large power plants that take more than five years to build, he said. That’s especially true if the microgrid is It’s located in the data center itself.
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To be clear, data centers are not the target of the Texas Backup Power Package program. Instead, the fund was established to support sites that cannot otherwise afford on-site backup power, explained Joel Yu, Senior Vice President of Policy and Foreign Affairs. The fascinating rock. The Houston-based microgrid operator runs 500 megawatt projects with grocery stores, truck stops and other large, large customers in Texas. Enchanted Rock has deployed gas-fired generators in water operators and irrigation areas, including Houston’s Northeast Water Purification Plant.
“$1.8 billion is a huge sum and is more ambitious than the programs we’ve seen in other jurisdictions,” Yu said. “However, since the winter storm has been around, it has been very in line with the state’s policies to improve resilience at key facilities.” I knocked out the power It exceeded 4.5 million people in a week in February 2021, leading to an estimated 200 people and more than $100 billion in real estate damage deaths.
Enchanted Rock’s existing customers tend to be large entities that can secure funding and clearly quantify the financial value of backup power generation, Yu said. The $1.8 billion microgrid program “unlocks opportunities for customers that are less refined and have nowhere to pay that extra cost,” he said.
Supporting facilities are excellent candidates for state-funded microgrids, given how deadly blackouts can be for seniors and medically compromised people. Alexa Schuman, representative of the state’s long-term care ombudsman office, told the Texas Public Utilities Commission. March Statement More than 80,000 residents in the state are at risk of extended blackouts, and “operators cite costs as a reason why they can’t install life-saving backup power sources in their locations.”
Yu rejected the names of the customers Enchanted Rock works with to leverage the fund. “However, there was a lot of interest from important facilities that may want to use this. We are trying to get involved in the program by talking to people in nursing homes, the assisted living industry, low-income housing and other important infrastructure.”
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Enchanted Rock is safe in what he called other backup generation providers such as Bloom Energy, Base Power, Cummins, Generac, Mainspring Energy, and Power “an informal group of like-minded companies.” It is known as Grid Resilience in Texas. Or grit for shortthe coalition is working with Texas’ Electric Reliability Council and the Utilities Committee on the $1.8 billion microgrid program, he said.
Most of these companies focus on gas-fueled power generation systems. These enchanting rock-like return engines Uses, Mainspring linear generatoror Fuel cells from Bloom Energy. Others are specialized Like startup base power, battery backup systemor combine solar, batteries, and energy control systems with generators, Similar to generac.
The law that creates the Texas Backup Power Package Program allows projects to look up state funds of up to $500 per kilowatt installed and require either solar, batteries, fossil gas or propane fuel production. But it is “not normative about mix proportions,” he added.
Different combinations can provide economics that are suitable for different types of customers. Some may find that many solar panels can help lower your daily utility bills, while others may want to maximize the generation of gas fuels to cover a multi-day winter outage when solar batteries aren’t very useful.
The legislation creating the program limits projects from actively playing in grid operator market programs, Yu added. This means that microgrid owners will face restrictions on the power they generate or the sale of grid balancing services they can provide to the market.
Still, using solar to offset utility power purchases, “there is room for customers to utilize their assets for behind-the-scenes value,” Yu said. “It’s going to be very important to make economics work.”
