Federal Cuts Impact Plans To Grow Texas Grid; Advanced Energy Options Face Delays

AUSTIN — A push toward what President Donald Trump’s administration has called a “Golden Era of American Energy Dominance” could be in trouble. Experts warn that the development of new energy sources, like advanced nuclear reactors and cold fusion, could be facing delays as a result of budget cuts and defunding efforts in the federal government.

“Research universities are being caught up in a broader series of actions,” said Rob Bradner, a Washington D.C.-based attorney and partner with Holland & Knight.

In January, President Trump issued an executive order calling for a pause on federal grants. In February, the judicial branch ordered the administration to unfreeze the funds.

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“We are merely looking at parts of the big bureaucracy where there has been tremendous waste and fraud and abuse,” Trump said at the time.

However, according to Bradner, a pause on the issuance of new research grants is creating a pipeline problem that could see many new energy projects delayed. 

“Universities are starting to take preemptive action to cut back and to reduce the number of graduate students they’re bringing in for next year,” Bradner said, meaning fewer people who can focus on research projects.

Advanced nuclear reactors

“I think that ripple (effect) is going to come through in the next year,” said Associate Professor Kevin Clarno, with the University of Texas.

Clarno studies one of the new types of reactors that could power Texas. Molten salt nuclear reactors can provide greater heat than traditional nuclear reactors, produce more energy and can even be used to desalinate water.

“In a solid fuel traditional reactor, you’re worried about making sure the fuel doesn’t melt. In a Molten Salt Reactor, you start out with fuel that’s already melted, and so the worst case scenario is it has a leak, it has an accident. And when it hits the ground and it starts to solidify, it starts to cool off,” Clarno said.

One of these reactors will soon be built at Abilene Christian University. That reactor, built with private money, will serve as an example for future reactors. It will also provide data for engineers and researchers.

Clarno said the federal government funds several other nuclear power projects through the Department of Energy.

“They have been funding a lot of commercial companies to ‘Hey, let’s help you get to the process that you can commercialize these technologies,’” Clarno said.

Energy demand grows in Texas

The development of these new reactors is especially important in Texas.

In February, the Electric Reliability Council of Texas, or ERCOT, issued a new report that forecasted the Texas grid doubling in demand over the next 10 years.

“The Texas grid is about 85,000 megawatts. That’s been growing over time, and it’s generally expected to start growing even faster,” said Joshua Rhodes, a research scientist at the University of Texas.

Driving this demand is a push for new data centers in Texas.

“They want to have power 24/7. Power that doesn’t cycle up in the afternoon and down during the night like the residential sector does,” Rhodes said.

This is another advantage with nuclear power. Unlike wind and solar, whose energy generation changes throughout the day, nuclear power is consistent.

Currently, two nuclear power plants operate in Texas and they provide 10% of the state’s power supply.

Prioritizing new energy

The advancement of nuclear reactors is a priority of the Trump administration. At a recent press conference at Los Alamos in New Mexico, U.S. Energy Secretary Chris Wright said “almost nothing” has happened in nuclear development in decades.

Wright, who served on the board of a small nuclear reactor company called Oklo prior to joining the administration, included developing advanced nuclear reactors in his list of priorities.

That list was released on Feb. 5, 2025.

When will delays hit energy development?

Clarno said the work on new nuclear power will be delayed if cuts hit the National Labs. He said many private labs rely on these labs to perform necessary research as part of reactor development.

“There is risk, starting, really, in October, that the National Labs aren’t going to be able to deliver on those efforts that they’re doing to assist the companies,”  Clarno said. 

“The administration is expected to, more broadly, push for reductions in indirect costs on grants outside of (the National Institutes of Health) to National Science Foundation, Department of Energy, other major research funders,” Bradner said.

According to Bradner, the administration is also asking agencies not to pay on existing grants. He said this is mostly related to grants for green energy that were funded during the Biden administration.

“Unfortunately people are saying, ‘Well, I may have to trim back on that, and I may not be able to do research that has lots of regulatory compliance or lots of other administrative burdens,’” Bradner said.

All of this leads to more delays in the development of future energy, according to Clarno.

“We’re probably going to have to expand natural gas. You know, nuclear is probably a solution that’s more at least a decade away, but the AI revolution is here today, and it needs power today,” Rhodes said.

Solutions on Texas

There is some movement in Texas to help fund these projects. On March 7, Sen. Tan Parker, R-Flower Mound, filed Senate Bill 2060 as part of the 89th legislative session.

Called the Texas Advanced Nuclear Deployment Act, the bill would provide the Public Utility Commission access to the Texas Energy Fund. The commission can use these funds for grants to promote the development of advanced nuclear reactor projects in Texas.

That bill has not yet been referred to a committee.