< PreviousIt didn’t take Hurricane Beryl coming ashore in southeast Texas to remind everyone about the vulnerability of the Texas electric power grid, but the widespread outages that lingered for a week following the catastrophic July storm sure did. “Power is probably the biggest factor impacting Texas right now,” says Susan Arledge, senior managing director for Newmark in Dallas. “ e Electric Reliability Council of Texas (ERCOT) predicts that Texas’s electricity demand could almost double in the next six years due to the growth of data centers and artifi cial intelligence. ERCOT experts say that demand could reach gigawatts by , which is nearly double the gigawatts of demand recorded in . Data centers and AI are expected to account for more than half of the increased demand.” A change in the prediction model used by ERCOT precipitated these updated numbers, says Arledge. “Before now, they had to base their predictions for growth on contracts they had in place,” she says. “House Bill allows operators to count potential users without a signed agreement. It unties the hands of ERCOT.” e net eff ect is that the new predictions point to “our power demands doubling over the next six years, and it is coming from data centers, bitcoin miners and AI companies,” says Arledge. “Many Texas communities are second-guessing whether they want a data center or a bitcoin mining company to come in and suck up power.” e U.S. Energy Information Administration recently reported that Texas trails only Virginia in the growth of commercial sector electricity consumption from to . During that period, Texas demand grew by over , gigawatt hours (GWh). Waco-based economist Ray Perryman says that “the dynamic Texas economy and its growing population — and cold by RON STARNER ron.starner@siteselection.com Texas S T A TE SPO TLIGHT 142 SEPTEMBER 2024 S I T E S EL E C T I O N What Large Power Users Need to Know About What Large Power Users Need to Know What Large Power What Large Power Users Need to Know About by RON STARNER ron.starner@siteselection.com by RON STARNER About Photo: Adobe Stock Entergy Texas has proposed new power plants in Southeast Texas. Rendering courtesy of Entergy Texas144 SEPTEMBER 2024 S I T E S EL E C T I O N winters and hot summers — require increases in electric generation and transmission capacity well beyond what was expected even a few years ago. Basic patterns of growing power needs in response to population and economic expansion have been in place for decades. However, there are profound changes underway which are shifting power demand growth into an entirely new gear. e recent and projected surge in electricity-intensive industries is driving rapid increases in current and projected demand.” Besides data centers, Perryman points to emerging industries such as the Tesla gigafactory in Austin and LNG (liquefi ed natural gas) facilities across the Gulf Coast. All of them require substantial electricity. “Developments on the horizon to deal with climate issues, such as hydrogen production and carbon capture, will also require enormous resources,” he says. “It is probably not surprising that Texas is at the forefront of many of these trends given the economic development success of the state in recent years and its regulatory framework that is conducive to emerging industries. While electric vehicle adoption will likely be slower in Texas than elsewhere, the area is a leader in data centers — including those developed to support AI — and crypto mining. It also has a strong and growing presence in electric vehicle manufacturing across the supply chain.” About a third of the increased demand is expected to come from the Permian Basin where oil and gas companies are converting from gas and diesel to operations run on electricity. Expert: ‘All of the Above’ Approach is Needed e solution to the state’s power needs will have to be comprehensive and multi-faceted, says Perryman. “Texas will need generation and transmission capacity. ERCOT has , active generation interconnection requests totaling GW planned for the next few years, including GW of solar, GW of wind, GW of gas and GW facilitated by battery capacity. Benefi ts of this diversity of sources are that they can be built faster and with more location options. However, given that GW is dependent on wind or sun, the batteries, as well as additional gas-fi red capacity, will be crucial to dealing with surges in demand in response to weather extremes. It will necessitate an ‘all of the above’ approach, and policy should accommodate all types of power resources.” John Boyd Jr., principal of e Boyd Company Inc., a national site selection consulting fi rm with offi ces in New Jersey and South Florida, says that “it is incumbent upon cities in Texas and elsewhere to be able to provide the peak power needs of site-seeking companies as peak power requirements have become leading-edge site factors for many fi rms.” For Texas, Boyd notes, the power factor takes on heightened importance. “Keep in mind that Texas is a land of climate extremes, ranging from frigid winter storms that paralyze power plants to blistering summer days that overload the grid, not to mention the state’s exposure to severe storms like tornadoes along with hurricanes coming off the Gulf of Mexico, like we have seen recently.” Moreover, he says, Texas is in a unique position because of its independent grid. “Texas, unlike every other state, has its own power grid and lacks major connections to other regional power grids outside its borders,” Boyd says. “ is doubles down on its vulnerability to the wide range of severe weather that Texas deals with. Developing additional in-state power generation has been a B Y THE NUMBERS TEXAS Higher Ed. R&D Expenditure in $000s: 7,444,647 Number of NCRCs: 36,812 | Percent Improved 2022–23: 6.30% Business Tax Climate Rank Change 2023–2024: 0 Industrial power cost per kWh: $7.13 Total Rev. as Share of Total Expenses, FY 2007-21: 107.2% 2023 Workers’ Comp Index Rate: 0.88 Selected Top Projects by Capital Investment COMPANY CITY INVESTMENT $M Element Fuels Holdings Brownsville 3,000 Energy Transfer Equity Nederland 1,800 Eastman Chemical Co. Longview 1,200 Cormorant Clean Energy Port Arthur 1,200 X 8 Rivers Capital Port Arthur 1,000 Source: Conway Projects Database Power is probably the biggest factor impacting Texas right now.” — Susan Arledge, Senior Managing Director, Newmark, Dallas Power is probably the S I T E S E L E C T I O N SEPTEMBER 2024 145 focus of the Abbott administration and the legislature, especially since that over- the-top winter storm three years ago that almost brought the state power structure to its knees and blacked out a large portion of Texas.” Boyd was referring to the winter storm deep freeze of February 2021, when Texas suffered its worst energy infrastructure failure in state history. Widespread shortages of water, food and heat lasted for days and even weeks in some portions of the state. Compared to that disaster, the weeklong power outages in Greater Houston following Hurricane Beryl in early July were less severe, but they were no less impactful as they led directly to strong reactions from those in charge. Governor Abbott is Seeking Answers On July 16, Texas Gov. Greg Abbott fired off a stern letter to the CEO of CenterPoint Energy demanding answers and accountability. “In the wake of Hurricane Beryl’s landfall, CenterPoint Energy has lost the faith and trust of Texans,” the letter stated. “Indeed, nearly 2.2 million residential and commercial customers in Southeast Texas lost power during the peak of the storm, and many continue to suffer without electricity more than a week after the storm. Texans deserve better from their electrical companies, especially during hurricane season. The adequacy of your preparation will be analyzed in the coming months, but the time is now for CenterPoint Energy to improve its practices.” Abbott was not alone. Harris County Commissioner Rodney Ellis blasted both state and Public Utilities Commission officials in the aftermath of Beryl. “The state’s response was clearly inadequate this go-round,” Ellis told TV station WFAA in Dallas-Fort Worth. “It’s going to have an impact on economic development for this state. And this state is such a driver, is such an engine for economic development in America. I think that’s why you’re going to see state leaders willing to make some investment on their end.” (Continued on page 152)146 SEPTEMBER 2024 S I T E S EL E C T I O N Already ranked second in the nation both for semiconductor manufacturing and semiconductor employment, Texas has hundreds of billions of dollars’ worth of chipmaking fabs that are poised to come online in the coming years. To continue to sta these massive labs of immense complexity, leaders from government, industry and academia are coming together in a statewide e ort to train new legions of semiconductor workers. These educational initiatives are sprouting with increasing frequency from K-12 systems up to master’s level programs. According to the University of Texas at Austin, the Lone Star State accounts for 17.5% of all semiconductor employment in the U.S., amounting to more than 43,000 semiconductor workers. More than a quarter of those jobs require a graduate degree, UT says, with a third of the workforce expected to retire within the next decade. The math says Texas will need to pad its robust semiconductor workforce within the neighborhood of a thousand new master’s graduates each year. In response, UT is unveiling a new master’s level semiconductor program that’s to launch in the fall of 2025. A collaboration of the school’s Cockrell School of Engineering and its College of Natural Sciences, the program will o er a new Master of Science in Engineering with a major in semiconductor science and engineering. It will leverage UT’s history of semiconductor education and its ties to industry leaders such as Samsung Austin Semiconductor, with which it formally partners on workforce development. “Nowhere else will students have the opportunities to work with leading semiconductor companies, access to world- class facilities for education and research, and the chance to conduct hands-on research like they will as part of our semiconductor science and engineering program,” said Roger Bonnecaze, dean of the Cockrell School of Engineering. In addition to the master’s program, the Cockrell School and Texas Engineering Executive PUTS ITS STAMP ON SEMICONDUCTOR TRAINING Already ranked second in the nation both for semiconductor semiconductor employment, semiconductor employment in the U.S., amounting to more than 43,000 semiconductor workers. More than a quarter of those jobs require a graduate degree, UT says, with a third of than 43,000 semiconductor workers. More than a quarter of those jobs require a graduate degree, UT says, with a third of Already ranked second in the nation both for semiconductor semiconductor employment in the U.S., amounting to more Texas is a national chipmaking leader. Getty Images/SweetBunFactory148 SEPTEMBER 2024 S I T E S EL E C T I O N Education (TxEEE) — the school’s professional development and continuing education arm — are to offer a new certificate providing training in semiconductor manufacturing and a path to enter the industry from other fields. Federal Funds Coalesce for Coalitions Led by UT Austin and funded by the Texas Legislature to the tune of $552 million, the Texas Institute for Electronics (TIE) is a consortium of state and local governments, semiconductor companies, national labs and academic institutions focused on semiconductor and semiconductor workforce development. Founded in 2021, TIE’s industry partners include Intel, Micron Technology, Applied Materials and Advanced Micro Devices. In March, TIE was announced as a partner with UT and Austin Community College District in a program that’s to serve as a one-stop shop to address multiple skillsets across the semiconductor workforce continuum. At the center of the effort is the joint Semiconductor Training Center (STC), envisioned as a delivery system for hands- on training combined with academic theory designed to transition current workforce talent into the semiconductor industry and to advance the careers of incumbent workers. The first training programs are expected to launch in January. In July, TIE was chosen by the Defense Advanced Research Project Agency (DARPA) to receive $840 million to build a DOD Microelectronics Manufacturing Center. “Under the agreement, TIE will establish a national open access R&D and prototyping fabrication facility that will enable DOD to create higher performance, lower power, light weight and compact defense systems,” said a release. “Such technology could apply to radar, satellite imaging, unmanned aerial vehicles or other systems.” Austin Community College is a player in its own right in semiconductor workforce development. Late last year, ACC developed the Semiconductor Technician Advanced Rapid Start (STARS) program, a four- week upskilling curriculum in collaboration with the Austin Regional Manufacturing Association and regional employers including Samsung, NXP, Applied Materials, Tokyo Electron and Infineon. The short-term program is designed to create pathways to entry- level employment in the semiconductor manufacturing sector as equipment maintenance and repair technicians. “Austin Community College is a regional leader for workforce development training programs that build direct paths for students to train and get the skills needed to meet the growing needs for Central Texas’ manufacturing workforce,” said Jon Taylor, corporate vice president, Samsung Austin Semiconductor. In late July, the Texoma Semiconductor Tech Hub of North Central Texas and Southern Oklahoma (TSTH) — one of 31 federal Tech Hubs designated last October under the Biden Administration’s CHIPS and Science Act — was awarded a $500,000 Consortium Accelerator Award from the U.S. Economic Development Administration. Coupled with a $400,000 federal strategy development grant the consortium received last fall, the awards will support the hub’s aim of creating equitable training opportunities — particularly targeting historically underserved communities such as women, girls and rural communities. The TSTH consortium is led by Southern Methodist University. The centerpiece of its strategy is the construction and distribution of “fablets,” shared mobile lab facilities, to provide communities across 29 counties with access to semiconductor training resources typically available only to those with access to expensive clean rooms. — Gary Daughters Photo courtesy of SamsungNext >