With New Microgrid Funding, Texas Seeks to Avoid the Devastation of Storms Like Winter Storm Uri
In Early 2021, Winter Storm Uri knocked out power to two out of three Texans and shut off water to nearly half. The Texas Department of Public Health linked 210 deaths to the deep freeze.
Now many in the state are working to ensure that, with microgrids, critical facilities will continue to have power during such storms.
A $1.8 billion funding program targeting critical facilities
To help provide funding for some of the state’s 31,000 critical facilities–some of which can’t afford to deploy microgrids on their own–the state legislature in early June funded a $1.8 billion backup power program as part of the $5 billion Texas Energy Fund. The resilience program was created through SB 2627, which was approved but not funded in 2023.
The funding effort, which was established with input from Enchanted Rock as part of the group Grid Resilience in Texas, could still be vetoed by Governor Greg Abbott, said Joel Yu, senior vice president of policy and external affairs at microgrid provider Enchanted Rock. The time period for vetoing the bill has not yet passed, he said.
Texas resilience efforts are growing. Deployment of commercial microgrids in Texas has more than doubled in the past 5 years.
The $1.8 billion in funding that’s expected to be available from the state is for resilience investments specifically for critical facilities that can’t pay for their own microgrids.
Smaller facilities will benefit from the funding
“Small facilities, small municipal water facilities, nursing homes or assisted living facilities have said cost is one of the big hurdles to deploying backup power,” Yu said. “This creates a subsidy to support those facilities.”
Texas is home to 8,922 police and fire stations and 5,985 hospitals, medical facilities and nursing homes, according to a report prepared by consultant Patrick Engineering for the Public Utility Commission of Texas.
The report also identified 2,842 wastewater/sewage treatment plants, 1,901 storm and homeless shelters, 7,957 public schools and municipal buildings that provide critical services and 3,155 grocery stores and evacuation route fuel stations.
Loans a possibility for helping pay for projects
The statute implementing the funding calls for a cap of $500/kW per grant. “It’s possible that additional dollars could go to help finance the remainder through loans. It’s up in the air,” Yu said. “We will have to see what comes of the utility commission’s implementation rulemaking.”
With grants capped at that amount, it’s unlikely the funding will subsidize the full cost of individual “backup power packages”--the term the state is using to describe the microgrids, he added.
To receive funding, projects must include solar, storage and propane or gas generation, but the program doesn’t specify how much of each generation source must be deployed.
Program calls for 2.5 MW or less of load, 48 hours of backup
Participating facilities can only aggregate 2.5 MW or less of load. Resilience packages must provide at least 48 hours of continuous power without refueling or bringing in new power sources, Yu said.
The projects that receive funding are prohibited from using their microgrid assets to participate in the market. That’s because some of the stakeholders in the proceeding worried that subsidized resources providing grid and other services could distort those markets.
But the hope is that microgrid providers can earn income from other programs.
“We’ve been advocating for flexibility in program design to leverage the assets for economic value behind the meter to help offset the cost,” Yu said. That might include having the subsidized microgrids participate in the state’s emergency response service, which is an emergency demand response program.
With standard size generators of 5 MW, Enchanted Rock has focused to date on larger projects.
Opportunities for microgrid providers with small generators
“There’s a floor to what we can service economically. But some companies with smaller generators sized to residential loads will have a lot of opportunities out there,” he said.
A number of microgrid projects in Texas are being planned at critical service facilities.
For example, Enchanted Rock is deploying microgrids at numerous critical facilities in Texas, including 12 Houston neighborhoods that need resiliency for police, fire, water and other critical services. Efforts will begin with a 500-kW microgrid at the Kashmere Multi-Service Center, located in an historically African American neighborhood.
In an interview with Microgrid Knowledge in late 2024, Angela Blanchard, chief recovery and resilience officer for the city of Houston, said, “Houston has to step up its game on the resiliency front. We need to be prepared for high wind and high water, heat and flooding.”
In central Texas, RPower is developing a 10 MW microgrid for Bell County Water Control and Improvement District (WCID) #1.
“There’s huge potential here,” Yu said. But it’s important for stakeholders to get the program design right, he added. “With the $1.8 billion, there is a lot we can do for the state.”
