Energy Resiliency in Williamson County: Community Microgrids as a Possible Solution
- Matt Pitcher
- Jul 21
- 15 min read
Updated: 3 days ago
As summer heats up here in central Texas, we turn our attention to the topic of energy resiliency, particularly that of our state energy grid and how policymakers who affect those of us living in Williamson County specifically can mitigate grid failures and look at solving the longer term problems associated with providing sustainable and affordable energy to ourselves and our neighbors.
This is a nonpartisan issue as the heat and cold (and water and electricity) don’t care if you’re a Democrat, Republican, Libertarian, or Independent. If the energy grid fails, it fails for all of us. And we're all at risk.
In fact, according to a March 2025 University of Texas poll of 1,200 registered Texas voters, 84% agreed that "improve the state energy grid" should be a primary concern of lawmakers (the highest percentage of problems Texans feel they have, with "reduce property taxes" being 2nd at 76% and "increase healthcare access" being third at 74%). This cut across demographics, party, and location. It's clearly a nonpartisan issue that a vast majority of Texans want to see addressed.
That's what we here at Pitcher's Mound are about discovering:
What are the main problems we feel we have here and what are some realistic solutions that we should be exploring?
Therefore, let's explore one such possible solution to help "improve the state energy grid": Microgrids.
What are Microgrids and Why Should I Care?
Microgrids are small-scale electricity networks that can operate independently or in conjunction with the main grid. They consist of interconnected loads and distributed energy resources, allowing them to power entire communities or specific sites like hospitals, data centers, and military bases, especially during power outages. Microgrids can generate their own power using renewable sources such as wind and solar, and they can operate in grid-connected or island mode, enhancing reliability and resilience to disturbances. Overall, microgrids play a crucial role in modern energy systems by providing localized energy solutions and improving energy security.
More Texans are investing in microgrids to avoid power outages
Microgrids generate and supply their own power in tandem with the grid and work as a backup option in case extreme weather knocks out power. The state continues to shore up its electric grid, while individuals and businesses have been springing for their own options when extreme weather knocks out power. It’s part of why the use of microgrids is on the rise, which the Dallas Fed noted in a recent report. While generators and microgrids both provide backup power, there’s a key difference between the two, according to Mahmoud Kabalan, an associate professor and director of the Center for Microgrid Research at the University of St. Thomas in Minnesota.
A generator “can be sitting there idling for many years until something happens and then it kicks in,” he said.
A microgrid, however, “is running 24/7.” A microgrid generates and supplies its own power in tandem with the grid — whether or not there’s an outage. It generates from sources like “diesel, natural gas in combination with renewable energy like solar,” explained Kabalan.
Microgrids are used by the military, he added. Other institutions where loss of power can be critical also utilize microgrids, per George Gross, a professor emeritus with the University of Illinois Urbana-Champaign.
“We’re seeing universities, for example, becoming a microgrid and hospitals,” he said. That’s increasingly the case for commercial enterprises, too. From 2016 to 2023, microgrid installation nearly doubled nationally, said Prithvi Kalkunte, an economic programmer with the Dallas Fed. While in Texas it’s “grown exponentially since like 2016,” Kalkunte said — from around 20 to 300 installations.
“We see the pickup after Hurricane Harvey. A lot of businesses, including H-E-B and Buc-ee’s, have chosen to add microgrids, partially for reliability, and then also so that they can have electricity close to the site, when outages are kind of costly for those businesses,” said Kalkunte. The electric grid has been around for nearly 140 years, but it’s yet to overcome it’s biggest nemesis: the weather. Texas is showcasing that point as it suddenly rivals California in proving the need for microgrids.
Remember What happened in Texas and how bad was it in the winter of 2021?
Very bad.
Struggling to keep the grid from collapse, the grid operator instituted rolling blackouts causing millions of Texans to lose electricity as bitter cold swept the state. Meant to last minutes, the power outages were elongating into hours and possibly days. More than 4.3 million electric customers lacked electricity brought about by what could go wrong did go wrong. It all started when severe and unusual cold caused power demand to rise as households consumed more energy to try to stay warm. The system set a new winter peak of demand of 69,222 MW.
Big power capitulates to the cold
Then, in rapid progression, large power plants began to trip off-line, which they are more apt to do under severe demand and in extreme cold. But the number that failed was staggering. The system lost 34,000 MW, most of them thermal or nuclear plants. Some wind farms also lost productivity as turbines succumbed to icing. The system reached a point where “electric demand was really just exceeding available supply,” said Dan Woodfin, senior director of system operations at ERCOT, the grid operator for most of Texas. At this point the reliability of the entire grid was in jeopardy. If an electric grid goes out of balance, it risks wide-scale blackouts. So to reduce demand, ERCOT instituted its highest energy emergency alert, which called upon utilities to begin controlled blackouts. These are temporary power outages, generally lasting minutes, meant to ease pressure on the grid. However, some Texans experienced much longer power outages for various reasons. There are the usual storm-related mishaps — ice and wind taking down distribution lines.
Or, in other cases, as Woodfin noted, utilities are shutting down circuits to noncritical customers to ensure hospitals and other emergency services receive power. Meanwhile, ERCOT continued to struggle to keep the grid in balance as power plant operators worked to bring their units back online. Exactly what went wrong is why the Texas power system is put under the microscope.
One thing is immediately apparent. Microgrids are helping ease the problem, but Texas doesn’t have enough of them.
How microgrids help grids
“This is another great example of where microgrids can not only provide resiliency for their respective customers but also alleviate some of the load on the grid, allowing the utilities to maintain their own system reliability,” said Michael Bakas, executive vice president at Ameresco. He noted that if there were more microgrids – if they reached a critical mass – they could become a larger resource for utilities to call upon during periods of potential disruption.
“The utilities could reach out and request the microgrids to island. That would reduce the utilities’ load requirements and could potentially allow them to avoid rolling outages. This is a good example of where microgrids and utilities can coexist and benefit from each other,” he said. Or, as Mike Byrnes, senior vice president, Veolia North America put it: “At times of grid stress, the resiliency and societal benefits of microgrids really shine through.” Byrnes, whose company focuses on microgrids that use combined heat and power, said that such systems “will keep the local microgrid customers running while at the same time relieving stress on the grid, benefiting everyone. It is yet another reason that public policy should encourage microgrids.”
Like an insurance policy
Reliability is a key microgrid benefit during the kind of outage faced by Texas, but so is price management. Wholesale power prices have skyrocketed because of the electricity shortages, reaching ERCOT’s market cap of $9,000/MWh. To put that in perspective, the average annual price in Texas is about $30/MWh. Microgrid owners can earn or save money during these periods by providing much-needed services to the grid or by using on-site power from the microgrid to avoid paying the high grid costs.
“Microgrids are sometimes thought of too narrowly, as protecting from wildfires or from weather related outages in general. But microgrids are actually more like an insurance policy protecting you from any type of event, natural and otherwise, that may disrupt power flow. The fun part about microgrids is that this insurance policy can reduce costs and save money, too,” said Scott Kessler, who handles microgrid strategy and sales for Siemens.
Texas on the Verge of an Energy Catastrophe: How Microgrids are Helping
That insurance is likely to become more important in the face of climate change. And, as Mark Feasel, Schneider Electric’s president for smart grid, North America, pointed out, microgrids also have a role to play in mitigating climate change. “It continues to be proven that weather challenges can hit anywhere. The required portfolio of digitized, decarbonized and decentralized is essential to address our energy transformation. The greening of the grid is not enough when it comes to our resiliency needs. The decentralization of behind-the-meter microgrids provides the facility the resilience required while decreasing their overall carbon footprint,” he said.
A humanitarian technology
But, ultimately, the immediate concern is keeping our neighbors safe as some see the temperatures in their homes, with no heat or power, dip dangerously low. More microgrids in communities, shelters or even homes could help. As Texans’ demand for electricity soared, utility operators revealed how poorly prepared they were for extremely cold weather. The grid failed in a spectacular fashion and showcased how de-regulation can sometimes backfire.
Such scenarios are likely to grow in frequency and intensity as the impacts of climate change increasingly threaten infrastructure. Also, natural gas contributes to 51 per cent of electricity production in the state, with solar and wind having a combined total close to 30 per cent. In the winter months in Texas, wind produces only 10 per cent of the total. Diversification of energy sources could also be a mitigation solution.
Microgrids Double Benefit: Connecting Communities AND Improving Local Resiliency
An alternative to expanding existing grid infrastructure is to shift towards smart microgrids at the community level. Such systems can increase reliability and drive down carbon emissions when renewable energy is used. When combined with smart meters that reconcile inflows and outflows of electricity, microgrids provide real-time energy data. When a microgrid goes down, it only affects the local region and not an entire state or province. Because of their scalability and flexibility, microgrids may be less expensive to build when compared with energy mega projects and their associated transmission and distribution infrastructure.
But for this shift to succeed, interconnection standards need to be developed to optimize a two-way flow of electricity. Microgrids have the added benefit of being able to use a large percentage of existing wiring within communities to contain costs. Additionally, they may fit better with the wants and needs of communities, generate local employment opportunities, lower consumption of electricity and take advantage of regional energy sources. That said, research on various business models for them is still evolving, and work to make microgrids more secure from hackers is proving to be a challenge.
Monetizing renewable energy trading
Market mechanisms including peer-to-peer energy trading based on blockchain technologies can be used within microgrids to track transactions and to increase market penetration. This has been demonstrated in Australia where owners of household solar arrays were able to buy and sell energy at an agreed upon price using real-time data. When combined with a strategy to increase the adoption of electric vehicles, microgrids can take advantage of vehicle-to-grid technology by using energy stored in batteries of vehicles to reduce peak demand.
De-gridding and setting up a microgrid is challenging
Although microgrids have a lot of potential, they still face some challenges before they achieve wide-scale support. Energy storage remains expensive. The cost of lithium ion batteries has dropped to about $175 per kilowatt hour (kWh) of storage in 2019 from $1,200 per kWh in 2010. But many industry experts say the cost must fall below $100 per kWh to be competitive. That said, other storage options exist, including small-scale pumped hydro, compressed air, and flywheel technology. There are also several financial challenges, given the absence of a long track record.
So far, investors have been reluctant to support microgrids, but this may be shifting. Schneider Electric is now partnering with investors to focus on microgrids to offer a hedge to companies who want longer term security with respect to the price they pay for electricity. Legislation challenges also represent a barrier, and new regulatory frameworks and standardization are essential. Work to improve electrical codes for interconnecting with other grids will ensure safe operation of microgrids.
Additionally, governments need to recognize that this approach can provide critical infrastructure to lower-income communities and regions most likely to be impacted by climate change. Microgrids represent a form of climate change adaptation. In short, climate change represents a significant threat to electrical utilities and the communities they serve. It also offers the greatest opportunity for innovation, community development and risk minimization. Smart microgrids are a leap forward in how we generate, transmit and consume electricity. We have the potential to make grid failures like what happened here a thing of the past.
The Future of Microgrids in Texas
In fact, in a remarkable transformation over the past five years, Texas has witnessed its commercial microgrid count skyrocket from just 17 to over 300. While financial incentives and infrastructure improvements have largely contributed, the huge need for dependable power in a weather-vulnerable region has been the main driving force. Notably, prominent companies like H-E-B and Buc-ee’s have invested in their own microgrid systems, which further fuels this expansion. With the rise of microgrid installations, Texas underscores that strong, localized power systems are increasingly vital to the fabric of society. With ongoing investment and innovative breakthroughs, Texas seems primed to set the standard for energy independence and sustainability on a national scale.
Side Note: Other than population growth, what's driving the unprecedented demands of energy needs?
In a word (well 2): data centers!
As of 2024, 4.4 percent of all energy consumed in the US went toward data centers. Meanwhile, data centers' carbon intensity — the amount of iceberg-melting exhaust spewed relative to energy used — became 48 percent higher than the US average. There are 3,500 data centers in Texas, (15 in Williamson County alone!)
Williamson County is experiencing significant growth in data centers, with multiple projects underway. In fact, the potentially largest data center campus in not only Texas, but one of the largest in the US has been approved in Hutto and has now broken ground.
The current status of the Hutto data center project includes:
- Skybox Datacenters and Prologis have received approval from the Hutto City Council to build a 159-acre data center campus in the Hutto Megasite, with a total area of 3.9 million square feet.
- The project is expected to bring $10 billion in capital investment and will consist of six buildings.
- The campus will feature 600 megawatts through two private substations, making it one of the most scalable data center campuses in the United States.
This project is poised to be one of the largest economic developments in Central Texas. In total, there are up to 20 data centers planned across the United States, with Texas serving as a central hub. Additionally, there are 8-10 individual operating companies expected to be part of the Hutto development. This indicates a robust and expanding data center landscape in Williamson County.
And what's driving the need for so many data centers?
AI.
While data center power use remained mostly steady across the US between 2005 and 2017, their power consumption doubled by 2023, our first full year with mass-market AI. A recent MIT study says "that figure is poised to skyrocket, given rising AI demands, potentially hitting 21% by 2030, when costs related to delivering AI to consumers are factored in". Water needs to cool these systems and our water systems will also be tremendously impacted, boosting the further need for resuability requirements and possibly (nontoxic) alternative coolants (but that is another blog for another time).
Federal Funding for Microgrids and DERs is Disappearing. Here are Some Other Funding Options
While federal funding for microgrids and distributed energy resources (DER) is shrinking, microgrid seekers–especially municipalities and schools– are looking into state and local funding options, saying they need microgrids to provide energy resilience.
As the Trump Administration begins eliminating federal funding for microgrid and other distributed energy resources (DER), municipalities, tribes, schools and developers are seeking state and local funding, while at the same time reducing their projects’ costs. In spite of the funding cuts, microgrids are seen as critical resources for achieving energy resilience to cope with climate-change induced storms and wildfires. Municipalities especially want backup power for critical services such as schools, libraries, community centers, cooling centers, emergency response efforts and police stations.
Municipal governments seeking to deploy microgrids explore funding options
“When it comes to microgrids, we’re getting a lot of requests to produce feasibility studies, specifically in the municipal space,” said Marc Starkey, program manager at Schneider Electric North America’s sustainability business. About a third to one half of the municipalities that approach Schneider Electric in California are looking to include microgrids in their projects, he said. The company is also seeing demand from military bases, counties and school districts. Organizations interested in microgrids aren’t necessarily putting projects on hold in response to the Trump administration’s cuts to clean energy funding. They’re taking time to explore all state and local opportunities, he said. They include bond funding and state programs.
Stacking funding options in wildfire-prone California as a potential model for Texas?
In California, stackable funding opportunities include low-interest loans from the California Energy Commission, the state’s self-generation incentive program (SGIP) and the Community Energy Reliability and Resilience Investment Program, Starkey said. Schneider Electric has some opportunities with school districts in California that are seeking to avoid wildfire-related outages, he said. These school districts plan to use bond funds approved by local taxpayers to invest in microgrids to keep schools open so they can provide daily instruction and receive funding that’s based on their average daily attendance, Starkey said.
Other Funding Model Options: Projects funded by state clean energy, green bank dollars
Numerous state programs are helping fund microgrids, said Lesley Jantarasami, vice president of research & industry strategy at the Smart Electric Power Alliance.
Some examples:
• The Snohomish Tribe of Indians’ project to deploy a 31-kW solar and storage microgrid and a separate 55-kW solar and storage system received $1.75 million from the Washington State Department of Commerce’s Clean Energy Fund. The project aims to reduce energy costs and create more affordable housing by adding renewable energy to the state’s grid.
• A naval submarine base microgrid-ready project received $8 million in debt financing from the Connecticut Green Bank.
• The Steil Club Electrification and Microgrid Project received a $1.28 million grant from the Michigan Public Service Commission’s Renewable Energy and Electrification Infrastructure Enhancement and Development grant program. In addition to the Connecticut Green Bank’s program, funding is also coming from New England states that want to move forward on climate progress, said Sean Burke, director of policy, BlueWave, which develops renewable energy projects. New England funding programs include:
• New York State Energy Research and Development Authority’s Retail Storage Incentive Program, which offers incentives for grid-connected residential and commercial customers to install either standalone energy storage or systems paired with a new or existing on-site renewable generation system.
• Connecticut Energy Storage Solutions program, which provides incentives to reduce the cost of deploying energy storage for homes, businesses and contractors.
• Massachusetts Clean Peak Standard, which offers incentives for deploying clean energy technologies that can supply electricity or reduce demand during seasonal peak demand periods. DER industry members are also keeping an eye on New York State’s ASAP Act, which aims to accelerate the use of solar.
Lowering costs with flexible interconnection
Along with taking advantage of such incentive and grant programs, developers are looking to reduce the costs of clean energy projects. For example, Massachusetts and New York have flexible interconnection programs that allow clean energy developers to speed the interconnection process by agreeing to reduce demand when the utility system is stressed. This gives utilities more control. Customers agree to curtail their load under certain circumstances in exchange for a less expensive, faster connection.
Grant-free models that are sustainable and scalable
While some developers are cutting costs and looking for state and local grants, microgrid developer Enchanted Rock doesn’t rely on grant funding. “Grants can support early innovation, but true resiliency at scale requires a model that is sustainable and repeatable,” said Allan Schurr, chief commercial officer at the company. Enchanted Rock has deployed more than 385 microgrids, including a 30-MW system at Houston’s Northeast Water Purification Plant, a 2.4- MW system at Marine Corps Base Quantico and 12 MW of power systems supporting levee improvement across Fort Bend, Texas. Recently, the company’s microgrids covered more than 165 hours of power outages across Texas, Schurr said.
While federal funding is disappearing for microgrid and DER projects, these technologies are needed more than ever, SEPA’s Jantarasami said.
“Across the country, microgrids are helping communities—from tribal nations to military installations—strengthen resilience, reduce energy burdens and integrate clean energy into the grid,” Jantarasami said. “These projects, many supported by state and local funding, demonstrate the practical and equitable value of distributed energy solutions.”
Municipal Case Study
Model Legislation
Resources
Further Reading
- "With New Microgrid Funding, Texas Seeks to Avoid the Devastation of Storms Like Winter Storm Uri"
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