SMT Energy has secured $135 million in funding for its 160MW/320MWh battery energy storage system (BESS) in Houston, Texas. The project, named SMT Houston IV, will operate in the Electric Reliability Council of Texas (ERCOT) market, supporting the grid with wholesale market participation and ancillary services. The system is expected to be operational in Q2 2026.

The financing includes $100 million in project funding, arranged jointly by Macquarie Group and KeyBanc Capital Markets. Additionally, Macquarie’s Commodities and Global Markets division provided a preferred equity investment and is facilitating the sale of $62 million in investment tax credits (ITCs).

FlexGen Power Systems will serve as the system integrator, sourcing equipment and deploying its HybridOS energy management system (EMS) for site integration, control, and analytics. David Spotts, co-founder and managing partner at SMT Energy, praised FlexGen for ensuring high system uptime in previous projects.

Texas continues to see significant energy storage growth, driven by population increases and rising energy demand from AI and data centers. The ERCOT market is now the second-largest BESS market in the U.S., following California.

With the completion of SMT Houston IV, SMT Energy now has 500MWh of utility-scale BESS in operation or construction and a 2GWh pipeline planned for ERCOT and the Southwest Power Pool by 2030.