grubby fatal error: unable to find a suitable template

Somewhat of a late response, but just faced the same problem with CentOS 7 minimal install.

Solution was to run: grub2-mkconfig -o /boot/grub2/grub.cfg after upgrading the kernel.

Note that does not set the new kernel as the default in the boot menu.

It works fine for me:

mv /boot/grub/grub.conf /boot/grub/bk_grub.conf
yum -y update && yum -y reinstall kernel