SMT Energy has secured $135 million in financing for its energy storage project deployed in Houston, Texas. This project features a 160 MW/320 MWh battery storage system and includes a 10 MW Santa Rosa battery storage project, known as the SMT Houston IV battery storage project. This initiative will participate in the wholesale market in Texas and provide ancillary services within the Electric Reliability Council of Texas (ERCOT) market. The project is anticipated to commence operations in the second quarter of 2026.
The financing for this project was co-led by Macquarie Group and KeyBanc Capital Markets. Additionally, Macquarie’s commodities and global markets business provided a preferred equity investment and was authorized to sell approximately $62 million in Investment Tax Credits (ITC) related to the project.
According to David Spotts, co-founder and managing partner of SMT Energy, the project deployment involved FlexGen, which supplied the battery storage system. FlexGen’s energy management system, known as HybridOS, will deliver on-site integration, control, and analytics services. FlexGen became the first system integrator to announce a joint development agreement (JDA) with a non-lithium battery company, partnering with Eos Energy to deploy a fully integrated battery storage system.
In a recent interview, Kelcy Pegler, CEO of FlexGen, discussed the challenges and growth opportunities for 2025, stating, “The year 2025 will be influenced by a fundamental shift in power demand. The explosive growth of data centers is creating unprecedented energy needs, accelerating the deployment of various power generation facilities.”
The Texas energy storage market continues to expand, driven by a growing population and the influx of major companies like Tesla, Oracle, and HP, which are either expanding their operations or relocating to the state. The ancillary services market provided by ERCOT positions it as the second-largest battery storage market in the United States, following California.
William Derasmo, a partner at the law firm Troutman Pepper Locke, emphasized the importance of ensuring dispatchable clean energy to meet the rising demand from large-scale data centers, noting that operating large energy storage systems can play a crucial role in this transition. FlexGen has stated that system reliability is vital for maintaining a competitive edge in this evolving market.
SMT Energy announced that after the launch of the SMT Houston IV battery storage project, the company will have 18 utility-scale battery storage systems in operation and deployment. Furthermore, the company plans to deploy 2 GWh battery storage projects across ERCOT and the Southwest Power Pool markets, with expectations for commercial operation by 2030. SMT Energy is also collaborating with SUSI Partners to deploy multiple battery storage projects across the state.
