Terraflow Energy, a relatively new energy storage company based in Katy, has announced an ambitious slate of investments along the Gulf Coast.
The startup, which formed a year ago, is planning a new 100,000-square-foot facility in Katy that would serve as its future headquarters and as a small-scale manufacturing site, executives announced at a glitzy showcase attended by various local elected officials Thursday evening.
But Terraflow’s “mic-drop” plans are in Victoria, a city along the Gulf Coast about 125 miles southwest of Houston, CEO Jon Parrella told his audience of a few hundred. There, the energy storage company has committed to developing a one-gigawatt project, capable of storing enough electricity to supply 250,000 homes for ten hours.
At a different site in Victoria, Parrella said the company plans to develop a second manufacturing facility, capable of producing up to two gigawatts of its product per year. The startup says the factory is expected to add more than 1,000 jobs to the area at full operation.
“It’s nothing short of a massive mountain we’ve got to move to get there,” Parrella told the audience.
A ‘shock absorber’ for AI data centers
For many years, long-duration energy storage technologies such as Terraflow’s have been touted as critical to decarbonizing the country’s power grids to mitigate worsening climate change. That’s because there are currently few ways to store excess wind and solar power across long periods of time for use during windless or cloudy days.
But Terraflow’s pitch focused on a different use-case, one that convinced Houston Republican Rep. Dan Crenshaw, a renewable energy skeptic, to endorse its vision: Adopting long-duration energy storage to support the Texas data center boom, as tech companies race to develop artificial intelligence.
AI data centers are massive warehouses hosting rows upon rows of computers. They require vast amounts of electricity — some demand as much power as hundreds of thousands of Texas households. Data center power consumption can also be extremely volatile, fluctuating wildly within the same minute, Parrella said in an interview.
In a worst-case scenario, such volatility could cause damage to other equipment connected to the grid, or even trigger rotating blackouts for Texas homes and businesses.
Terraflow’s technology offers data centers not only a stable source of backup power, but also a way to mitigate fluctuations in electricity usage, Parrella said.
“It basically acts as a shock absorber for all the power volatility, so the grid is not exposed to that,” he said.
The Victoria energy storage project would pair with an AI data center campus. The first gigawatt of capacity at the site is expected to take three to four years to complete, said Keith Borie, vice president of development at Optimus Technology Group, the company partnering with Terraflow to build the data center.
Terraflow declined to disclose any investment figures for its various announced projects, or a valuation for the startup. Optimus’ Borie said conversations are pending on which tech companies might be customers at the Victoria data center.
The ‘right time’ for long-duration energy storage
Terraflow’s energy storage technology differs from more commonplace battery storage projects, which have proliferated around the Houston area and across the state in recent years to support the strained Texas power grid.
Lithium-ion batteries can catch fire in rare circumstances, while Terraflow’s technology relies on vanadium, a less common metal with a much lower fire risk.
Significantly, most battery storage facilities only store up to four hours or so of electricity for discharge to the grid. Terraflow says its flow battery, which dissolves vanadium in a liquid solution, can discharge power for more than 10 hours.
Vanadium flow batteries are not new; the technology has been around for decades and has been successfully deployed across China and Europe. It has yet to scale in the United States, however, because lithium-ion batteries were favored for widespread use in everything from cell-phones to electric vehicles, and because of supply chain challenges in securing vanadium.
Terraflow, though, has already partnered with Georgia-based Storion Energy to secure vanadium, Parrella said. He believes his company can be the one to scale up the technology because tech companies would be willing to pay for the product, as the expected electricity needs of AI data centers are so massive in Texas.
Parrella also pointed to the recently-passed Senate Bill 6, a first-of-its-kind Texas law that would give ERCOT the ability to shut down data centers when electricity demand on the grid threatens to overwhelm available supply.
“We’re in the right place, the right time, the right political environment,” Parrella told the audience Thursday about the appetite for Terraflow’s product. “Senate Bill 6 came out, and it was like, holy cow, they just basically forced everybody to buy our batteries.”
Last month, Terraflow also announced plans to develop a 9.6 megawatt, five-hour duration energy storage project in Bellville, about 60 miles west of Houston. This project, which would connect to the Electric Reliability Council of Texas power grid, is expected to be operational in the first quarter of 2027, the company said.
‘More clean than green’
Terraflow’s many announcements come at an otherwise rough time for clean energy: Companies have canceled, closed or scaled back more than $22 billion in factories and clean energy projects in the first half of 2025, according to data from the environmental nonprofit E2, as the Trump administration’s tariffs and success in gutting clean energy tax credits take their toll.
Terraflow’s momentum, like that of other long-duration energy storage companies, seems to come from distancing itself from being known as a “green” energy product.
Instead, Terraflow is focusing on potential benefits for the expansion of AI data centers, a priority of President Donald Trump, and energy storage’s broader role in helping stabilize power grids.
“I would call it more clean than green,” Parrella said in an interview about Terraflow’s product, noting that it still requires mined minerals. The startup is also sourcing its flow battery solution from another startup, Quino Energy, which uses compounds from petroleum to make its product.
Indeed, Terraflow’s product is characteristic of Texas innovation, Rep. Crenshaw said in his remarks supporting an “all-of-the-above” approach to energy at the startup’s Thursday event.
Despite his “all-of-the-above” ethos, Crenshaw blamed renewable energy for the massive Texas blackouts of the 2021 freeze, without mentioning that natural gas shortages and natural gas power plant failures also contributed to much of the electricity crisis.
“Every once in a while, you have a technology that comes along where they don’t really make a lot of enemies,” Crenshaw said about Terraflow’s product.
In the lobby of a Houston hotel, Terraflow showed off a prototype of its flow battery, about the size of a small shed, of which no photos were allowed.
The lofty goal is — in just a few years — to scale the technology to the size of an Amazon distribution warehouse, company executives said.
“We went and got the orders first. Now we’re going to build the factories, and now we have to move,” Parrella told the audience.
Written by Claire Hao, Posted on Houston Chronicle
