The Texas Legislature has approved $1.8 billion in funding for the deployment of microgrids across critical facilities, marking a significant shift toward distributed energy resilience in the state’s broader electricity reliability strategy.
The newly funded Texas Backup Power Package Program will support the development of small-scale, on-site energy systems combining solar battery storage and gas fired generation at essential locations including hospitals, water treatment plants, nursing homes, police and fire stations. The program is designed to bolster grid reliability and mitigate risks associated with power outages caused by extreme weather events such as 2021’s Winter Storm Uri and Hurricane Beryl in 2024.
The legislation had been in development since 2023 but initially failed to secure funding. In the interim, the state prioritized a $5 billion allocation to the Texas Energy Fund to promote large scale gas generation. However, many of those centralized projects have stalled due to rising costs, supply shortages and regulatory challenges.
UH Energy Fellow Ed Hirs pointed out the growing risks to grid stability, noting, “ERCOT pointed out in November of last year, if we had a winter storm similar to Winter Storm Uri in February 2021, there was an 80% likelihood of rolling blackouts. Prior to that 2021 storm, the likelihood was only 5%.” This stark increase in the risk of blackouts underscores the need for more resilient energy solutions, and the renewed investment in microgrids aims to provide a critical safeguard against power disruptions caused by the far-too-frequent extreme weather events in Texas.
Microgrids offer a faster and more flexible alternative to traditional power plants. While individual projects are limited to no larger than 2.5 megawatts in capacity, the speed of construction and ability to operate independently of the main grid make them an important tool for enhancing resilience at critical sites.
This funding aims to make backup power accessible to facilities that otherwise might not be able to afford it, such as assisted living centers, where power outages can pose serious risks to vulnerable populations. The program encourages a mix of solar batteries and fossil fuel generation, providing options tailored to different operational and economic needs.
As Texas confronts rising electricity demand from population growth and expanding data centers, the microgrid program marks a strategic step forward in improving the reliability and resilience of the state’s strained energy infrastructure.