Gavin Newsom Vetoes Landmark Geothermal Bill

Current conditions: A tropical rainstorm is forming in the Atlantic that’s forecast to barrel along the East Coast through early next week, threatening major coastal flooding and power outages • Hurricane Priscilla is weakening as it tracks northward toward California • The Caucasus region is sweltering in summer-like heat, with the nation of Georgia enduring temperatures of up to 93 degrees Fahrenheit in October.

THE TOP FIVE

1. Two deals worth billions highlight a bright spot for clean energy

Base Power, the Texas power company that leases batteries to homeowners and taps the energy for the grid, on Tuesday announced a $1 billion financing round. The Series C funding is set to supercharge the Austin-based company’s meteoric growth. Since starting just two years ago, Base has deployed more than 100 megawatts of residential battery capacity, making it one of the fastest growing distributed energy companies in the nation. The company now plans to build a factory in the old headquarters of the Austin American-Statesman, the leading daily newspaper in the Texan capital. The funding round included major investors who are increasing their stakes, including Valor Equity Partners, Thrive Capital, and Andreessen Horowitz, and at least nine new venture capital investors, including Lowercarbon, Avenir, and Positive Sum. “The chance to reinvent our power system comes once in a generation,” Zach Dell, chief executive and co-founder of Base Power, said in a statement. “The challenge ahead requires the best engineers and operators to solve it and we’re scaling the team to make our abundant energy future a reality.”

The deal came a day after Brookfield Asset Management, the Canadian-American private equity giant, raised a record $23.5 billion for its clean energy fund. At least $5 billion has already been spent on investments such as the renewable power operator Neoen, the energy developer Geronimo Power, and the Indian wind and solar giant Evren. “Energy demand is growing fast, driven by the growth of artificial intelligence as well as electrification in industry and transportation,” Connor Teskey, Brookfield’s president and renewable power chief, said in a press release. “Against this backdrop we need an ‘any and all’ approach to energy investment that will continue to favor low carbon resources.”

2. Orsted’s stock issuance raises $9.4 billion

Orsted has been facing down headwinds for months. The Danish offshore wind giant has absorbed the Trump administration’s wrath as the White House deployed multiple federal agencies to thwart progress on building seaward turbines in the Northeastern U.S. Then lower-than-forecast winds this year dinged Orsted’s projected earnings for 2025. When the company issued new stock to fund its efforts to fight back against Trump, the energy giant was forced to sell the shares at a steep discount, as I wrote in this newsletter last month. Despite all that, the company has managed to raise the money it needed. On Wednesday, The Wall Street Journal reported that Orsted had raised $9.4 billion. Existing shareholders subscribed for 99.3% of the new shares on offer, but demand for the remaining shares was “extraordinarily high,” the company said.

That wasn’t enough to stave off job cuts. Early Thursday morning, the company announced plans to lay off 2,000 employees between now and 2027. The cuts represented roughly one-quarter of the company’s 8,000-person global workforce. “This is a necessary consequence of our decision to focus our business and the fact that we'll be finalizing our large construction portfolio in the coming years — which is why we'll need fewer employees,” Rasmus Errboe, Orsted’s chief executive, said in a statement published on CNBC. "At the same time, we want to create a more efficient and flexible organization and a more competitive Orsted, ready to bid on new value-accretive offshore wind projects.”

3. Gavin Newsom blocks permitting reform for geothermal in California

California Governor Gavin Newsom. Mario Tama/Getty Images

California operates the world’s largest geothermal power station, The Geysers, and generates up to 5% of its power from the Earth’s heat. But the state is far behind its neighbors on developing new plants based on next-generation technology. Most of the startups racing to commercialize novel methods are headquartered or building pilot plants in states such as Utah, Nevada, and Texas. A pair of bills to make doing business in California easier for geothermal companies was supposed to change that. Yet while Governor Gavin Newsom signed one statute into law that makes it easier for state regulators to certify geothermal plants, he vetoed a permitting reform bill to which the industry had pegged its hopes. “Every geothermal developer and energy org I talked to was excited about this bill,” Thomas Hochman, who heads the energy program at the right-leaning Foundation for American Innovation, wrote in a post on X. “The legislature did everything right, passing it unanimously. They even reworked it to accommodate certain classic California concerns, such as prevailing wage requirements.”

In a letter announcing his veto, the governor claimed that the law would have added new fees for geothermal projects. But an executive at Zanskar — the startup that, as Heatmap’s Katie Brigham reported last month, is using new technology to locate and tap into conventional geothermal resources — called the governor’s argument “weak sauce.” Far from burdening the industry, Zanskar co-founder Joel Edwards said on X, “this was a clean shot to accelerate geothermal today, and he whiffed it.”

4. Generate Capital lays off staff after replacing CEO

Last month, Generate Capital trumpeted the appointment of its first new chief executive in its 11-year history as the leading infrastructure investment firm sought to realign its approach to survive a tumultuous time in clean-energy financing. Less publicly, as Katie wrote in a scoop last night, it also kicked off company-wide job cuts. In an interview with Katie, Jonah Goldman, the firm’s head of external affairs, said the company “grew quickly and made some mistakes,” and now planned to lay off 50 people.

Generate once invested in “leading-edge technologies,” according to co-founder Jigar Shah, who left the firm to serve as the head of the Biden-era DOE Loan Programs Office. That included investments in projects involving fuel cells, anaerobic digesters, and battery storage. But from the outside, he said on the Open Circuits podcast he now co-hosts, the firm appears to have moved away from taking these riskier but potentially more lucrative bets. “They ended up with 38 people in their capital markets team, and their capital markets team went out to the marketplace and said, Hey, we have all this stuff to sell. And the people that they went to said, Well, that’s interesting, but what we really would love is boring community solar.”

5. Boston’s public housing to install heat pumps

Three of New England’s largest public housing agencies signed deals with the heat pump manufacturer Gradient to replace aging electric heaters and air conditioners with the company’s 120-volt, two-way units that provide both heating and cooling. The Boston Housing Authority, New England’s largest public housing agency, will kick off the deal by installing 100 all-weather, two-way units that both heat and cool at the Hassan Apartments, a complex for seniors and adults with disabilities in Boston’s Mattapan neighborhood. The housing authorities in neighboring Chelsea and Lynn — two formerly industrial, working-class cities just outside Boston — will follow the same approach.

Public housing agencies have long served a vital role in helping to popularize new, more efficient appliances. The New York City Housing Authority, for example, is credited with creating the market for efficient mini fridges in the 1990s. Last year, NYCHA — the nation’s largest public housing system — signed a similar deal with Gradient for heat pumps. Months later, as Heatmap’s Emily Pontecorvo exclusively reported at the time, NYCHA picked a winner in its $32 million contest for an efficient new induction stove for its apartments.

THE KICKER

Three chemists — Susumu Kitagawa, Richard Robson, and Omar Yaghi — won the Nobel Prize for “groundbreaking discoveries” that "may contribute to solving some of humankind’s greatest challenges, from pollution to water scarcity.” Just a few grams of the so-called molecular organic frameworks the scientists pioneered could have as much surface area as a soccer field, which can be used to lock gas molecules in place in carbon capture or harvest freshwater from the atmosphere.