New Tech Fuels Texas Power Surge

By Joanna Marsh

Surging energy demand in Texas is fueling major opportunities for the project sector, driving growth across the state’s expanding infrastructure and supply chains. Industry leaders from AAL and DHL Global Forwarding break down the evolving landscape.

From Issue 2, 2025 of Breakbulk Magazine.

The logistics industry in Texas is preparing for a significant increase in power production and consumption across the state, driven by the rapid expansion of data centers and sustained demand from the residential and manufacturing sectors. To meet these needs, Texas is exploring a mix of fossil fuel and renewable sources to ensure a reliable and growing supply.

In response, logistics experts told Breakbulk they are mobilizing resources to handle an expected surge in project cargo and transportation demands. “DHL has been deeply and heavily involved in the energy sector for decades,” says Charles Haymaker, regional sector head for renewables (Americas) at DHL Global Forwarding. “So, we understand the needs of our customers and we have to work with them as they grow, and as they create this new technology that’s driving all this new energy.”

According to the U.S. Energy Information Administration (EIA), Texas is the top crude oil and natural gas producing state in the U.S., accounting for 43% of U.S. crude production in 2023.

“The demand for energy is increasing drastically. More and more leading companies are now calling Texas their home, including the likes of Tesla, SpaceX and Blue Origin to name just a few, while the rise of artificial intelligence (AI) and the need for data centers are also driving this increased demand,” Henrik Hansen, general manager of Americas at AAL Shipping told Breakbulk.

“Alongside those developments, the LNG industry continues to thrive in Texas and in recent years this has been a particularly strong market with both the expansion of existing sites and the construction of new plants. We expect this to continue in the coming years.”

Texas is a leader in renewable energy, too. The state is actually the leading producer in wind-powered electricity generation, with a U.S. market share of 28%.

Energy Capital

“Texas is regarded by many as the energy capital of the world and the state has earned that moniker for several reasons, not least because of the concentration of expertise based there as well as its leading position in energy production,” Hansen said.

“While the state is typically associated with oil and gas, it has also become a leader in renewable energy, including wind and solar power, and is consistently ranked as the top energy producer in the U.S. for all of those segments.”

Haymaker echoed Hansen’s comments. “You don’t think of Texas as being a big renewable energy sector. But indeed, developers have made huge investments into Texas and renewable energy is blossoming very, very quickly,” he said.

Wind energy in particular has gained a lot of ground in the state, with energy production from wind occurring in Texas’ panhandle, Haymaker continued. Other areas within the alternative energy space also appear to be gaining traction, particularly nuclear energy.

In November 2024, Texas Governor Greg Abbott and the Public Utility Commission of Texas announced that the Texas Advanced Nuclear Reactor Working Group released its final report on how Texas can become a world leader in advanced nuclear power. Nuclear power currently represents about 5.3% of utility-scale net electricity generation in Texas, according to the U.S. EIA.

The report highlighted several reasons for developing advanced nuclear reactors, or ANRs. Among them is how ANRs could be used to enable enhanced energy security to all the sectors using electricity, including urban centers, ports, oil and gas, industrial facilities, data centers, and military bases.

Developing ANRs may also open an alternative to Chinese and Russian nuclear reactor technology for allies and partners, the report said, citing projections that the global nuclear market could triple by 2050.

Uranium Reserves

Texas could be a prime state for developing ANRs, in part because its uranium reserves account for 8% of known U.S. uranium - a preferred source of North American yellowcake, according to the report. Yellowcake can be transformed into uranium hexafluoride, which is a substance used in fabricating fuel for nuclear reactors, according to the U.S. Nuclear Regulatory Commission.

Texas may already be starting to grow its nuclear capacity. In February, the Texas A&M University System announced that it has offered land near the campus to four nuclear reactor companies to build small modular reactors, or SMRs. Clusters of these SMRs may supply the power needs for artificial intelligence endeavors, data centers and other projects, the university said.

“The agreements that the Texas A&M System has with Kairos, Natura, Terrestrial and Aalo are going to change the energy landscape for the whole country,” said Joe Elabd, vice chancellor for research at the Texas A&M System. “The Energy Proving Ground will allow these companies to safely test their SMRs and set the stage for deploying small nuclear reactors across the country.”

Plans to expand energy production in the state come as Texas officials seek to keep pace with commercial demand for electricity, especially from the tech and manufacturing sectors.

“Texas has the industrial and development needs — from oil and gas production to data centers and a burgeoning Artificial Intelligence sector — with demand growth projected at 8% a year for the next decade,” wrote Commissioner Jimmy Glotfelty with the Public Utility Commission of Texas.

Hansen provided some examples of where that demand is coming from within the tech sector. “A recently formed joint venture between OpenAI, SoftBank and Oracle said that it will invest up to US$500 billion in AI-related infrastructure and is targeting several locations in Texas for the expansion of data centers,” he said.

“The main grid operator in Texas therefore forecasts that power demand will nearly double by 2030 in part due to more requests to plug into the grid from data centers, crypto mining facilities, hydrogen production plants and oil and gas companies.”

DHL’s Haymaker added: “Data center projects are going to be huge consumers of electricity, not just to run the server farm but also to cool the facilities, such as immersion cooling.”

Meanwhile, demand for electricity from the commercial and manufacturing sectors will only continue to grow, Haymaker continued. “The refineries and oil production—those plants take a lot of power. None of this stuff happens without energy. So, even to produce energy, takes energy.”

Getting Ready

To prepare for the anticipated growth in energy production, Texas also needs adequate infrastructure to support both the production and consumption of energy. And to that end, local companies and ports have been preparing for what lies ahead.

The Port of Galveston has imported 979 wind blades and tower pieces totaling more than 32,000 tons for a US$5 billion wind farm being built in New Mexico, according to Galveston Wharves, a city entity affiliated with the port aimed at generating and reinvesting port revenues into the local community. To prepare for anticipated growth in wind energy, the port is investing more than US$90 million to expand and improve its cargo complex.

On the west bank of the Calcasieu Ship Channel and near Cameron Parish, Louisiana, Kimmeridge Texas Gas (KTG) has been approved to proceed with a 9.5 million tons per annum liquefied natural gas export terminal. Energy Secretary Chris Wright recently granted KTG’s Commonwealth LNG project new export authorization for non-free trade agreement countries, the company said in February.

Supply chain professionals are also preparing for this increase in energy production and consumption in Texas. AAL’s Hansen said his company continuously monitors market conditions and cargo flows to optimize fleet deployment and meet customers’ evolving needs.

“Our long-term strategy remains focused on maintaining a large, flexible fleet that can be adjusted as required. This approach allows us to adapt swiftly to shifting demand and support our clients with reliable, high-capacity shipping solutions,” Hansen said.

“Over the past five years we have positioned ourselves to be a premium provider of project, heavy-lift shipping solutions in Texas and in the U.S. Last year, we celebrated our 10th anniversary of our Houston office and over the years have been involved in several significant energy projects, building a strong client base.

“To be prepared for the years to come, we have embarked on our third-generation newbuilding program to take delivery of eight multipurpose, heavy-lift vessels, the Super B-Class. We are excited and confident.”

DHL Global Forwarding said it supports the supply chain by helping to move infrastructure assets, particularly large-scale industrial assets such as big cracker units for the oil and gas industry.

Jake Swanson, vice president at DHL Industrial Projects, said the company has been tracking progress within that sector and investing in in-house knowledge and expertise to manage such projects. DHL has grown its team in Houston by 15% over the last two years and added experts in the renewable and technology sectors, noted Swanson, adding that Houston is a regional home not only for project forwarders, but also for DHL’s customers.

DHL has also expanded its team in Austin as well as near the U.S.-Mexico border, where the company works with mining customers to facilitate cross-border movement of cargo.

Expanding DHL’s focus on renewable energy projects is part of a wider company-wide strategy to invest in new energy, according to Swanson.

“How can DHL Global Forwarding partner with other organizations that are trying to develop these new energy projects, whether it’s green hydrogen, whether it’s solar, wind energy?” Swanson said. “We want to be a part of it, not just moving the project cargo - but actually consuming that type of clean energy.”

Breakbulk Americas 2025 is happening on Sep 30-Oct 02 in Houston.

TOP PHOTO: deugro Houston delivers critical petrochemical equipment to Scott Bay Texas. CREDIT: deugro