Developer SMT Energy has secured a US$135 million funding for its 160MW/320MWh battery energy storage system (BESS) located in Houston, Texas.
Known as SMT Houston IV, the BESS will participate in the wholesale market and supply ancillary services in the Electric Reliability Council of Texas (ERCOT) market. The BESS is expected operational in Q2 of 2026.
Macquarie Group and KeyBanc Capital Markets were joint lead arrangers in the US$100 million project financing. Macquarie’s Commodities and Global Markets business also provided a preferred equity investment and is mandated to sell the project’s investment tax credits (ITCs) of approximately US$62 million.
Speaking with Energy-Storage.news, SMT Energy co-founder and managing partner David Spotts said that system integrator FlexGen Power Systems is to thank for the “superb” up-time experienced in these projects.
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FlexGen is obtaining the equipment for the BESS and its energy management system (EMS) “HybridOS” will provide site integration, site control, and analytics services.
FlexGen was the first major system integrator to announce a deal with a non-lithium-ion battery company that ESN is aware of, announcing in December 2024 a joint development agreement (JDA) with Eos Energy Enterprises to develop a fully integrated BESS solution using Eos’ zinc batteries and Flexgen’s EMS.
In January, Kelcy Pegler, CEO of FlexGen spoke with Energy-Storage.news as part of our Year in Review Q&A series. When speaking about 2025’s challenges and opportunities for growth, Pegler said: “2025 will be shaped by a fundamental shift in power demand. The explosive growth of data centres is creating unprecedented energy needs, accelerating the deployment of all types of power generation.”
The energy storage market continues to grow in Texas, as the population continues to expand and large companies, such as Tesla, Oracle and Hewlett Packard, to name a few, continue to expand in or move into the state.
Along with an increasing population, rising energy demands from AI and data centres mean that energy storage is crucially needed in the state. ERCOT’s large ancillary services market has led to its emergence as the second-largest BESS market in the US, after California.
Writing for Energy-Storage.news, William Derasmo, partner at US law firm Troutman Pepper Locke highlighted the need to secure 24/7 dispatchable clean energy to prepare the grid for the demands of the hyperscale data centre boom and how grid-scale storage could play a key role.
FlexGen has made it clear that system reliability is a key piece of staying ahead in this changing market. Spotts’ comments on FlexGen’s capabilities echo this sentiment.
SMT says that with the closing of SMT Houston IV, it now has eighteen utility-scale BESS assets, totalling approximately 500MWh, in operation or construction. In addition, it has a 2GWh pipeline of BESS projects in ERCOT and Southwest Power Pool targeted for commercial operation by 2030. It has deployed projects in the state in partnership with investor SUSI Partners too, covered by Energy-Storage.news.
