The recently published whitepaper was co-authored by UH VP of Energy and Innovation, Ramanan Krishnamoorti along with researcher Aparajita Datta.
"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 . . ." says Datta. “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 problem isn’t just in power generation—it’s about the delivery system too. Much of the development is occurring in rural West and North Texas, where demand has historically been low. Now, these regions are attracting massive energy-intensive operations without having the pipeline or transmission capacity to keep up. That geographic mismatch is creating logistical and economic constraints that affect everything from site selection to long-term business planning.
The current grid, powered by a mix of natural gas (40%), wind (29%), coal (12%), nuclear (10%), and solar (8%), is diversified, but not necessarily prepared for this scale of demand. The consequences of underestimating these pressures were clear during Winter Storm Uri in 2021, when millions lost power and critical systems like water treatment and transportation shut down.
Electricity isn’t the only resource under stress—water scarcity is emerging as a parallel crisis. The same research forecasts that Texas could see a water deficit of up to 3,600 million cubic meters by 2035, largely due to increased usage by power generators and data centers requiring constant cooling.
This dual pressure on energy and water resources poses a particular challenge for businesses in sectors like tech, manufacturing, and logistics. With the operational needs of AI facilities and hyperscale data centers skyrocketing, companies are being forced to reassess location strategies, cooling technologies, and sustainability planning. The availability and cost of both electricity and water are now essential variables in long-term investment decisions.
Competition between municipal needs, industrial operations, and power production could drive costs even higher and heighten regulatory scrutiny. Businesses must navigate this evolving landscape while accounting for both resource availability and infrastructure capacity.
While market forces continue to push demand higher, policy responses are starting to take shape. Senate Bill 6, signed into law in June 2025, introduces new requirements for large energy users—including mandatory demand response programs and clearer rate structures. The goal: shift load without throttling growth.
At the same time, the state’s renewable pipeline is gridlocked. Over 360 gigawatts of solar and battery storage projects are stuck in the ERCOT interconnection queue, hampered by bureaucratic delays and outdated permitting systems. Similarly, the development of new gas-fired plants has slowed due to financing challenges and regulatory uncertainty.
The bill’s focus on flexible energy usage—not fixed consumption caps—reflects an intent to maintain Texas’s pro-growth stance. But successful execution will depend on industry collaboration, policy enforcement, and timely infrastructure upgrades. For now, the burden is shifting toward businesses to understand these constraints and prepare accordingly.
