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On permitting reform optimism, GM layoffs, and LA’s H2 conversion

Hurricane Melissa made landfall over Cuba with winds raging up to 120 miles per hour | If the Category 5 storm veers westward as it heads north, Melissa will bring roiling seas to Atlantic Canada; if it veers eastward, it will bring rain to the United Kingdom | Heavy snowfall in Tibet forced Chinese authorities to shut down access to Mount Everest.

China’s commerce ministry promised to suspend its latest export restrictions on rare earths for at least a year as part of a trade truce President Donald Trump brokered with President Xi Jinping. Under rules Beijing issued on October 8, Chinese companies were required to obtain the ministry’s permission before exporting equipment to process ore and technology for mining and refining rare earths, magnets made from the metals, and components for electric vehicle battery manufacturing. That doesn’t mean Beijing is dialing back all its restrictions on rare earths, over which China controls roughly 90% of the world’s refining capacity. “Importantly, China’s commerce ministry today made no mention of suspending its April 4 regulations, which require export licenses for seven kinds of rare earths and magnets made from them,” The New York Times’ Beijing bureau chief, Keith Bradsher, wrote Thursday morning. “The April rules continue to disrupt production at the many factories in the United States and Europe that need Chinese materials.”
That’s bad news for Western rare earth companies whose stocks have been on a tear since China announced the latest export controls. But it’s good news for clean-energy companies who need access to the minerals — and not their only cause for optimism this morning. The Federal Reserve cut its benchmark interest rate by a quarter of a percentage point, bringing the cost of borrowing down to its lowest level in three years. The move came amid a flurry of economic uncertainty from the United States’ ongoing trade conflicts, accusations from the Trump administration’s over jobs and inflation reports, and the ongoing government shutdown. For the first time since 2019, two Fed officials dissented over the rate cut decision — one who wanted a larger, half-point cut, and the other who called for holding steady at the current level. The political upheaval aside, any cut is good news for renewable energy developers. As Heatmap’s Matthew Zeitlin wrote after last month’s quarter-point cut, the move may “provide some relief to renewables developers and investors, who are especially sensitive to financing costs.” But it still “may not be enough” to erase the challenges from higher tariffs.
On Wednesday, General Motors pinkslipped more than 3,400 workers who build electric vehicles and batteries as the company “rapidly adjusts to new policy under President Donald Trump and sluggish interest among U.S. buyers,” The Detroit News reported. The automaker’s Detroit-area all-electric assembly plant, called Factory Zero, will be the hardest hit, with 1,200 cuts.
GM had emerged this year as the best-selling electric vehicle maker in the country, with record sales in the most recent quarter. By eliminating the $7,500 federal tax credit for electric vehicles last month as part of his One Big Beautiful Bill Act, however, Trump cost GM “1.6 billion,” as Andrew Moseman wrote last week in Heatmap.
Just over a week ago, as I wrote here, Rhode Island Senator Sheldon Whitehouse warned that his vote on the bipartisan permitting reform ideas he helped put forward depended on the Trump administration easing up on what we’ve frequently called in this newsletter the “total war on wind.” Secretary of the Interior Doug Burgum balked at the idea. And yet, talks seem to be progressing. On Wednesday, E&E News reported that Whitehouse, the top Democrat on the Environment and Public Works Committee and a longstanding climate hawk, said talks were "pretty constant right now” and that the Senate planned to release a framework by the end of the year. He added that “there’s good faith on all four corners, referring to Environment and Public Works Chair Shelley Moore Capito, a West Virginia Republican, Energy and Natural Resources Chair Mike Lee, a Utah Republican, and ranking member Martin Heinrich, a New Mexico Democrat. “I don’t think we necessarily have to be down to legislative language, but it has to be clear enough to where we’re going so our colleagues have a chance to look at it and kick the tires and see what their concerns are.”
Kentucky is reeling from the looming halt to federal food stamps. Now the Trump administration wants to let the nation’s biggest grid operator charge Kentuckians to keep aging fossil fuel stations open in other states? No way, say one of the state’s biggest utilities and its attorney general. As Utility Dive reported, East Kentucky Power Cooperative, which serves nearly a quarter of the state’s ratepayers, and Attorney General Russell Coleman are challenging the PJM Interconnection’s plan to make utilities across its system pay for the Department of Energy’s emergency orders to keep coal-, oil-, and gas-fired power plants set to close this year open past their expiry dates. Much like the coal plant the agency ordered to stay open in Michigan, the Energy Department recently directed utilities in the PJM service area to keep two gas- and oil-fired units online near Philadelphia and a 400-megawatt oil-fired plant going near Baltimore. In August, the Federal Energy Regulatory Commission rejected East Kentucky Power Cooperative’s arguments against having to pay for PJM’s overall costs. But now the utility and the attorney general, a Republican, are fighting back against the latest filings.
Elsewhere in the PJM territory, chip giant Nvidia is investing in a data center built to smooth out power use as demand for artificial intelligence surges. The project, announced in Axios, is “the first commercial rollout of software that adjusts energy draw in real time.” Nvidia is set to deploy grid-regulating software by the startup Emerald AI at a server farm under construction in Virginia. Once completed, the facility will be “the first built to a new industry-wide certification on flexible power.”
The Los Angeles Department of Water and Power board voted unanimously to approve a contentious plan for an $800 million conversion of two units at the Scattergood Generating Station. The 3 to 0 decision to sign off on the plant’s environmental impact report clears the way for the city’s largest gas-fired plant to burn both natural gas and hydrogen. While the regulators said the plan was in line with the city’s goal of running on 100% renewables by 2035, since green hydrogen is made with clean electricity, opponents told the Los Angeles Times that the project would prolong the use of fossil fuels in the city and contribute to local pollution from nitrogen oxides.
If successful, the conversion will be one of the country’s biggest experiments in swapping gas for hydrogen. On Long Island in New York, utility giant National Grid announced a plan in August to install the world’s first linear generator that will run entirely on green hydrogen. Yet the efforts come as the Trump administration has eliminated federal funding for two of the seven regional hydrogen hubs set up under the bipartisan Infrastructure Investment and Jobs Act that were specifically designed to commercialize green hydrogen. And now, as Heatmap’s Emily Pontecorvo wrote, a list of rumored cuts that could come once the government shutdown ends puts the other five hubs on the chopping block.
Artificial intelligence is starting to decode the language of whales. Now biologist David Gruber of the Cetacean Translation Initiative, who has spent decades trying to understand marine life, said that the work his research outfit is doing to detect patterns in whale songs could “dramatically strengthen legal protections for nonhuman life,” Inside Climate News reported. Already, Gruber’s work has uncovered a sperm whale “alphabet,” finding that click patterns shift with conversational context, and discovered that whales even have dialects with pods from different parts of the ocean “vocalizing as differently as a New Yorker and a Texan.”
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The attacks on Iran have not redounded to renewables’ benefit. Here are three reasons why.
The fragility of the global fossil fuel complex has been put on full display. The Strait of Hormuz has been effectively closed, causing a shock to oil and natural gas prices, putting fuel supplies from Incheon to Karachi at risk. American drivers are already paying more at the pump, despite the United States’s much-vaunted energy independence. Never has the case for a transition to renewable energy been more urgent, clear, and necessary.
So despite the stock market overall being down, clean energy companies’ shares are soaring, right?
Wrong.
First Solar: down over 1% on the day. Enphase: down over 3%. Sunrun: down almost 8%; Tesla: down around 2.5%.
Why the slump? There are a few big reasons:
Several analysts described the market action today as “risk-off,” where traders sell almost anything to raise cash. Even safe haven assets like U.S. Treasuries sold off earlier today while the U.S. dollar strengthened.
“A lot of things that worked well recently, they’re taking a big beating,” Gautam Jain, a senior research scholar at the Columbia University Center on Global Energy Policy, told me. “It’s mostly risk aversion.”
Several trackers of clean energy stocks, including the S&P Global Clean Energy Transition Index (down 3% today) or the iShares Global Clean Energy ETF (down over 3%) have actually outperformed the broader market so far this year, making them potentially attractive to sell off for cash.
And some clean energy stocks are just volatile and tend to magnify broader market movements. The iShares Global Clean Energy ETF has a beta — a measure of how a stock’s movements compare with the overall market — higher than 1, which means it has tended to move more than the market up or down.
Then there’s the actual news. After President Trump announced Tuesday afternoon that the United States Development Finance Corporation would be insuring maritime trade “for a very reasonable price,” and that “if necessary” the U.S. would escort ships through the Strait of Hormuz, the overall market picked up slightly and oil prices dropped.
It’s often said that what makes renewables so special is that they don’t rely on fuel. The sun or the wind can’t be trapped in a Middle Eastern strait because insurers refuse to cover the boats it arrives on.
But what renewables do need is cash. The overwhelming share of the lifetime expense of a renewable project is upfront capital expenditure, not ongoing operational expenditures like fuel. This makes renewables very sensitive to interest rates because they rely on borrowed money to get built. If snarled supply chains translate to higher inflation, that could send interest rates higher, or at the very least delay expected interest rate cuts from central banks.
Sustained inflation due to high energy prices “likely pushes interest rate cuts out,” Jain told me, which means higher costs for renewables projects.
While in the long run it may make sense to respond to an oil or natural gas supply shock by diversifying your energy supply into renewables, political leaders often opt to try to maintain stability, even if it’s very expensive.
“The moment you start thinking about energy security, renewables jump up as a priority,” Jain said. “Most countries realize how important it is to be independent of the global supply chain. In the long term it works in favor of renewables. The problem is the short term.”
In the short term, governments often try to mitigate spiking fuel prices by subsidizing fossil fuels and locking in supply contracts to reinforce their countries’ energy supplies. Renewables may thereby lose out on investment that might more logically flow their way.
The other issue is that the same fractured supply chain that drives up oil and gas prices also affects renewables, which are still often dependent on imports for components. “Freight costs go up,” Jain said. “That impacts clean energy industry more.”
As for the Strait of Hormuz, Trump said the Navy would start escorting ships “as soon as possible.”
“It is difficult to imagine more arbitrary and capricious decisionmaking than that at issue here.”
A federal court shot down President Trump’s attempt to kill New York City’s congestion pricing program on Tuesday, allowing the city’s $9 toll on cars entering downtown Manhattan during peak hours to remain in effect.
Judge Lewis Liman of the U.S. District Court for the Southern District of New York ruled that the Trump administration’s termination of the program was illegal, writing, “It is difficult to imagine more arbitrary and capricious decisionmaking than that at issue here.”
So concludes a fight that began almost exactly one year ago, just after Trump returned to the White House. On February 19, 2025, the newly minted Transportation Secretary Sean Duffy sent a letter to Kathy Hochul, the governor of New York, rescinding the federal government’s approval of the congestion pricing fee. President Trump had expressed concerns about the program, Duffy said, leading his department to review its agreement with the state and determine that the program did not adhere to the federal statute under which it was approved.
Duffy argued that the city was not allowed to cordon off part of the city and not provide any toll-free options for drivers to enter it. He also asserted that the program had to be designed solely to relieve congestion — and that New York’s explicit secondary goal of raising money to improve public transit was a violation.
Trump, meanwhile, likened himself to a monarch who had risen to power just in time to rescue New Yorkers from tyranny. That same day, the White House posted an image to social media of Trump standing in front of the New York City skyline donning a gold crown, with the caption, "CONGESTION PRICING IS DEAD. Manhattan, and all of New York, is SAVED. LONG LIVE THE KING!"
New York had only just launched the tolling program a month earlier after nearly 20 years of deliberation — or, as reporter and Hell Gate cofounder Christopher Robbins put it in his account of those years for Heatmap, “procrastination.” The program was supposed to go into effect months earlier before, at the last minute, Hochul tried to delay the program indefinitely, claiming it was too much of a burden on New Yorkers’ wallets. She ultimately allowed congestion pricing to proceed with the fee reduced from $15 during peak hours to $9, and thereafter became one of its champions. The state immediately challenged Duffy’s termination order in court and defied the agency’s instruction to shut down the program, keeping the toll in place for the entirety of the court case.
In May, Judge Liman issued a preliminary injunction prohibiting the DOT from terminating the agreement, noting that New York was likely to succeed in demonstrating that Duffy had exceeded his authority in rescinding it.
After the first full year the program was operating, the state reported 27 million fewer vehicles entering lower Manhattan and a 7% boost to transit ridership. Bus speeds were also up, traffic noise complaints were down, and the program raised $550 million in net revenue.
The final court order issued Tuesday rejected Duffy’s initial arguments for terminating the program, as well as additional justifications he supplied later in the case.
“We disagree with the court’s ruling,” a spokesperson for the Transportation Department told me, adding that congestion pricing imposes a “massive tax on every New Yorker” and has “made federally funded roads inaccessible to commuters without providing a toll-free alternative.” The Department is “reviewing all legal options — including an appeal — with the Justice Department,” they said.
Current conditions: A cluster of thunderstorms is moving northeast across the middle of the United States, from San Antonio to Cincinnati • Thailand’s disaster agency has put 62 provinces, including Bangkok, on alert for severe summer storms through the end of the week • The American Samoan capital of Pago Pago is in the midst of days of intense thunderstorms.
We are only four days into the bombing campaign the United States and Israel began Saturday in a bid to topple the Islamic Republic’s regime. Oil prices closed Monday nearly 9% higher than where trading started last Friday. Natural gas prices, meanwhile, spiked by 5% in the U.S. and 45% in Europe after Qatar announced a halt to shipments of liquified natural gas through the Strait of Hormuz, which tapers at its narrowest point to just 20 miles between the shores of Iran and the United Arab Emirates. It’s a sign that the war “isn’t just an oil story,” Heatmap’s Matthew Zeitlin wrote yesterday. Like any good tale, it has some irony: “The one U.S. natural gas export project scheduled to start up soon is, of all things, a QatarEnergy-ExxonMobil joint venture.” Heatmap’s Robinson Meyer further explored the LNG angle with Eurasia Group analyst Gregory Brew on the latest episode of Shift Key.
At least for now, the bombing of Iranian nuclear enrichment sites hasn’t led to any detectable increase in radiation levels in countries bordering Iran, the International Atomic Energy Agency said Monday. That includes the Bushehr nuclear power plant, the Tehran research reactor, and other facilities. “So far, no elevation of radiation levels above the usual background levels has been detected in countries bordering Iran,” Director General Rafael Grossi said in a statement.
Financial giants are once again buying a utility in a bet on electricity growth. A consortium led by BlackRock subsidiary Global Infrastructure Partners and Swedish private equity heavyweight EQT announced a deal Monday to buy utility giant AES Corp. The acquisition was valued at more than $33 billion and is expected to close by early next year at the latest. “AES is a leader in competitive generation,” Bayo Ogunlesi, the chief executive officer of BlackRock’s Global Infrastructure Partners, said in a statement. “At a time in which there is a need for significant investments in new capacity in electricity generation, transmission, and distribution, especially in the United States of America, we look forward to utilizing GIP’s experience in energy infrastructure investing, as well as our operational capabilities to help accelerate AES’ commitment to serve the market needs for affordable, safe and reliable power.” The move comes almost exactly a year after the infrastructure divisions at Blackstone, the world’s largest alternative asset manager, bought the Albuquerque-based utility TXNM Energy in an $11.5 billion gamble on surging power demand.
China’s output of solar power surpassed that of wind for the first time last year as cheap panels flooded the market at home and abroad. The country produced nearly 1.2 million gigawatt-hours of electricity from solar power in 2025, up 40% from a year earlier, according to a Bloomberg analysis of National Bureau of Statistics data published Saturday. Wind generation increased just 13% to more than 1.1 gigawatt-hours. The solar boom comes as Beijing bolsters spending on green industry across the board. China went from spending virtually nothing on fusion energy development to investing more in one year than the entire rest of the world combined, as I have previously reported. To some, China is — despite its continued heavy use of coal — a climate hero, as Heatmap’s Katie Brigham has written.
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Canada and India have a longstanding special friendship on nuclear power. Both countries — two of the juggernauts of the 56-country Commonwealth of Nations — operate fleets that rely heavily on pressurized heavy water reactors, a very different design than the light water reactors that make up the vast majority of the fleets in Europe and the United States. Ottawa helped New Delhi build its first nuclear plants. Now the two countries have renewed their atomic ties in what the BBC called a “landmark” deal Monday. As part of the pact, India signed a nine-year agreement with Canada’s largest uranium miner, Cameco, to supply fuel to New Delhi’s growing fleet of seven nuclear plants. The $1.9 billion deal opens a new market for Canada’s expanding production of uranium ore and gives India, which has long worried about its lack of domestic deposits, a stable supply of fuel.
India, meanwhile, is charging ahead with two new reactors at the Kaiga atomic power station in the southwestern state of Karnataka. The units are set to be IPHWR-700, natively designed pressurized heavy water reactors. Last week, the Nuclear Power Corporation of India poured the first concrete on the new pair of reactors, NucNet reported Monday.
The Spanish refiner Moeve has decided to move forward with an investment into building what Hydrogen Insight called “a scaled-back version” of the first phase of its giant 2-gigawatt Andalusian Green Hydrogen Valley project. Even in a less ambitious form, Reuters pegged the total value of the project at $1.2 billion. Meanwhile in the U.S., as I wrote yesterday, is losing major projects right as big production facilities planned before Trump returned to office come online.
Speaking of building, the LEGO Group is investing another $2.8 million into carbon dioxide removal. The Danish toymaker had already pumped money into carbon-removal projects overseen by Climate Impact Partners and ClimeFi. At this point, LEGO has committed $8.5 million to sucking planet-heating carbon out of the atmosphere, where it circulates for centuries. “As the program expands, it is helping to strengthen our understanding of different approaches and inform future decision-making on how carbon removal may complement our wider climate goals,” Annette Stube, LEGO’s chief sustainability officer, told Carbon Herald.