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Zanskar’s second geothermal discovery is its first on untapped ground.
For the past five years or so, talk of geothermal energy has largely centered on “next-generation” or “enhanced” technologies, which make it possible to develop geothermal systems in areas without naturally occurring hot water reservoirs. But one geothermal exploration and development company, Zanskar, is betting that the scope and potential of conventional geothermal resources has been vastly underestimated — and that artificial intelligence holds the key to unlocking it.
Last year, Zanskar acquired an underperforming geothermal power plant in New Mexico. By combining exclusive data on the subsurface of the region with AI-driven analysis, the company identified a promising new drilling site, striking what has now become the most productive pumped geothermal well in the U.S. Today, the company is announcing its second reservoir discovery, this one at an undeveloped site in northern Nevada, which Zanskar is preparing to turn into a full-scale, 20-megawatt power plant by 2028.
“This is probably one of the biggest confirmed resources in geothermal in the last 10 years,” Zanskar’s cofounder and CEO Carl Hoiland told me. When we first connected back in August, he explained that since founding the company in 2019, he’s become increasingly convinced that conventional geothermal — which taps into naturally occurring reservoirs of hot water and steam — will be the linchpin of the industry’s growth. “We think the estimates of conventional potential that are now decades old just all need to be rewritten,” Hoiland told me. “This is a much larger opportunity than has been previously appreciated.”
The past decade has seen a lull in geothermal development in the U.S. as developers have found exploration costs prohibitively high, especially as solar and wind fall drastically in price. Most new projects have involved either the expansion of existing facilities or tapping areas with established resources, spurring geothermal startups such as Fervo Energy and Sage Geosystems to use next-generation technologies to unlock new areas for development.
But Hoiland told me that in many cases, conventional geothermal plants will prove to be the simplest, most cost-effective path to growth.
Zanskar’s new site, dubbed Pumpernickel, has long drawn interest from potential geothermal developers given that it’s home to a cluster of hot springs. But while both oil and gas companies and the federal government have drilled exploratory wells here intermittently since the 1970s, none hit hot enough temperatures for the reservoirs to be deemed commercially viable.
But Zanksar’s AI models — trained on everything from decades old geological and geophysical data sets to newer satellite and remote sensing databases — indicated that Pumpernickel did indeed have adequately hot reservoirs, and showed where to drill for them. “We were able to take the prior data that was seen to be a failure, plug it into these models, and get not just the surface locations that we should drill from, but [the models] even helped us identify what angle and which direction to drill the well,” Hoiland told me.
That’s wildly different from the way geothermal exploration typically works, he explained. Traditionally, a geologist would arrive onsite with their own mental model of the subsurface and tell the team where to drill. “But there are millions of possible models, and there’s no way humans can model all of those fully and quantitatively,” Hoiland told me, hence the industry’s low success rate for exploratory wells. Zanskar can, though. By modeling all possible locations for geothermal reservoirs, the startup’s tools “create a probability distribution that allows you to make decisions with more confidence.”
To build these tools, Hoiland and his cofounder, Joel Edwards, both of whom have backgrounds in geology, tracked down and acquired long forgotten analog data sets mapping the subsurface of regions that were never developed. They digitized these records and fed them into their AI model, which is also trained on fresh inputs from Zanksar’s own data collection team, a group the company launched three years ago. After adding all this information, the team realized that test wells had been drilled in only about 5% of the “geothermally prospective areas of the western U.S.,” leaving the startup with no shortage of additional sites to explore.
“It’s been nine years since a greenfield geothermal plant has been built in the U.S.,” Edwards told me, meaning one constructed on land with no prior geothermal development. “So the intent here is to restart that flywheel of developing greenfield geothermal again.” And while Zanskar would not confirm, Axios reported earlier this month that the company is now seeking to raise a $100 million Series C round to help accomplish this goal.
In the future, Zanskar plans to test and develop sites where exploratory drilling has never even taken place, something the industry essentially stopped attempting decades ago. But these hitherto unknown sites, Edwards said, is where he anticipates “most of the gigawatts” are going to come from in the future.
Hoiland credits all this to advances in AI, which he believes will allow geothermal “to become the cheapest form of energy on the planet,” he told me. Because “if you knew exactly where to drill today, it already would be.”
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“We grew quickly and made some mistakes,” Generate executive Jonah Goldman told Heatmap.
In a tumultuous time for clean energy financing, leading infrastructure investment firm Generate Capital is seeking to realign its approach. Last month the firm trumpeted its appointment of a new CEO, the first in its 11-year history. Less publicly, it also implemented firm-wide layoffs, representatives confirmed to Heatmap.
“Like many others in our space, we grew quickly and made some mistakes,” Jonah Goldman, Generate’s head of external affairs, told me. He was responding to a report from infrastructure and energy intelligence platform IJ Global, which last week reported that Generate had “shut down its equity investing arm” and laid off 50 people. While Goldman confirmed that there were indeed layoffs earlier this summer, he would not specify how many employees were let go, and disputed the claim that any particular team was dissolved. “We have not ‘shut down’ any strategies,” he told me. “Our investment team continues to find opportunities across the capital stack.”
Goldman’s comments echoed those of the firm’s new CEO, David Crane, a former undersecretary for infrastructure at the Department of Energy. In an article published to Generate’s website a few weeks ago, Crane admitted that the firm had “deviated from our operational roots,” a reference to the firm’s unconventional investment strategy.
Generate is unique as a sustainability-focused investor, in that it often acts as an owner and operator for the projects it finances rather than taking a passive equity stake The firm also provides tailored project financing options for its partners to help manage risk.
But over the past few years, Generate made a number of large equity investments in companies whose projects it did not directly oversee. These included utility-scale solar and energy storage developer Pine Gate Renewables, which is on the verge of bankruptcy, and green hydrogen developer Ambient Fuels, which was recently acquired by Electric Hydrogen amidst tumult in the industry.
“While other investors had no choice but to act as pure investors, we were distracted from who we are and what we were good at,” Crane wrote, noting that this distraction led to “poor performance in one component of our investment portfolio.” That would appear to be its equity division.
Generate’s model is designed to bridge a critical gap in the climate tech ecosystem known as the “missing middle,” the phase at which a company with some proven tech has outgrown early-stage venture capital but is still considered too risky for most traditional infrastructure investors. Historically, the firm has generated high returns by backing “leading-edge technologies,” Jigar Shah, the firm’s co-founder and former director of the DOE’s Loan Programs Office, said on the Open Circuit podcast he co-hosts. These include investments in projects involving fuel cells, anaerobic digesters, and battery storage.
Shah hasn’t worked at Generate since he joined the Biden administration in 2021. But from the outside, he says, 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,“ Shah said on the podcast. As he saw it, Generate began making equity investments into lower-risk projects such as community solar, which naturally generated stable but lower returns. Then once interest rates went up post-Covid, that put downward pressure on equity returns.
Shah said it’s these slipping returns that have made it harder for Generate to raise capital over the past two years. Axios Pro recently reported that the firm is now exploring an IPO to bring in additional funding, following hesitation from some of its existing backers to reinvest.
While Goldman acknowledged that “there is some skepticism in the capital markets about our space now,” he disagreed with the idea that Generate has abandoned its focus on leading-edge technologies. “We have invested over the last number of years in a lot of assets that are predictable assets with predictable cash flows that have performed very strongly for our investors. And we continue to have the creativity of the team that’s focused on trying to bring newer technologies to the market to bridge the bankability gap,” he told me.
By way of example, he highlighted two of the firm’s most recent investments, a $200 million loan to Pacific Steel Group for the first green steel mill in California and a $100 million scalable credit facility for green data center developer Soluna, which allows the company to increase its borrowing capacity as new projects come online.
The latter deal was announced just weeks after Crane stepped into his new role. Having served as the CEO of five publicly traded energy companies before joining Generate, Crane is now promising to turn around the firm’s fortunes. With the Trump administration rolling back federal support for clean energy infrastructure and investors remaining cautious, Crane has said that now is the time to jump on undervalued opportunities.
“Right now, there’s a lot of noise telling people to stop writing checks. But this is precisely the time to invest in the infrastructure that will power the next twenty years,” he wrote. Goldman backed this up, telling me, “We believe managers who understand the space and who can take advantage of the opportunities that are underpriced in this tougher market environment are set up to succeed.”
Just as tech giants such as Google, Salesforce, and Amazon were able to expand rapidly in the wake of the dot-com bubble and consolidate their positions in the market, Generate’s leadership say they’re now well positioned to help select clean energy companies do the same.
It will certainly be a boon for the sector if they can, given the abundance of undercapitalized climate tech opportunities, from clean cement to thermal energy storage, next-generation geothermal, and carbon capture, all looking to build first-of-a-kind projects. And there’s not nearly enough infrastructure funding to go around.
So if Generate has indeed lost the confidence of its investors, it’s critical that Crane, Goldman, and company regain it swiftly. Their ability to do so could shape not only which technologies drive the energy transition, but how quickly they do so.
With the federal electric vehicle tax credit now gone, automakers like Ford and Hyundai have to find other ways to make their electric cars affordable.
We finally know what Tesla means by an “affordable” electric vehicle. On Tuesday, the electric automaker revealed the stripped-down, less-fancy “Standard” version of its best-selling Model Y crossover and Model 3 sedan. These EVs will sell for several thousand dollars less than the existing versions, which are now rebranded as “Premium.”
These slightly cheaper Ys and 3s aren’t exactly the $25,000 baby Tesla that many fans and investors have anticipated for years. But the announcement is an indication of where the electric vehicle market in the United States may be headed now that the $7,500 federal tax credit for purchasing an EV is dead and gone. Automakers have spent the past few months rejiggering their lineups and slashing prices as much as they can to make sure sales don’t crater without the federal incentive.
The impending end of the tax credit on September 30 helped propel Tesla to record sales numbers in the third quarter of 2025. It was a stark reversal from months of disappointing sales stemming from factors like increased competition and Elon Musk’s political antics that alienated potential buyers. Money talks, of course; Tesla sent me a blitz of emails to make sure I didn’t forget what a good deal I could get before September’s end. But now, with the deadline passed, Musk’s company needed a new shot in the arm to stop sales from falling off a cliff.
The budget Teslas are, indeed, lesser vehicles. They have simpler headlights, less power, and less range than the now-Premium versions. They even come in fewer colors. But the prices — $40,000 for a Model Y Standard and $37,000 for a Model 3 Standard — effectively mirror what those cars would have cost if the tax credit were still in place. In other words, you can still buy a Tesla in the $35,000 to $40,000 range. It just won’t be as good a Tesla as you used to be able to get for the money.
The tax credit deadline had looked like one that would demarcate two distinct EV eras, with October 1 acting as the beginning of new, less-affordable time. But it turns out things aren’t quite so black and white. Lots of automakers are experimenting with ways to soften the financial blow for those who still want to get into an EV. After all, there’s always a loophole.
For example, as the September tax credit deadline approached, Reuters reported on a scheme orchestrated by Ford and General Motors to allow the American car giants to keep the good times going by buying their own cars. It goes like this: Before the September 30 deadline, the financing arms of these big corporations began the process of purchasing a host of their own vehicles from their dealerships. By making the down payment before the end of September, Ford and GM qualified these vehicles for the federal tax benefit. (They even checked with the IRS to make sure this plot was legitimate, Reuters said.) They plan to pass on the savings by leasing those vehicles back to everyday Americans.
According to Car and Driver, a number of citizens did something similar to what the corporations devised — that is, some buyers made their first payments on EVs that won’t be delivered to them for weeks or months in order to qualify for the tax break. These shenanigans are for the short term, though. Ford and GM could pre-purchase only so many of their own vehicles, and Ford said this deal effectively extends the tax credit only another quarter, through the end of December.
The bigger question is whether the automakers can — or will — simply cut prices on their EVs to make the loss of federal incentives sting a little less.
That’s the plan at Hyundai. The Korean giant has announced an enormous price cut on its successful Ioniq 5, one that more than makes up for the vanishing federal incentive. The most basic version of that car will fall from $42,600 to $35,000, putting it on par with the Chevy Equinox EV that’s been a hit at that price. Fancier versions of the Ioniq 5 will fall by more than $9,000 for the 2026 model year. Hyundai and its partner Kia are offering some of the best October lease deals, too.
Other car companies have begun to follow suit. BMW will simply offer a $7,500 discount on its electric models for those who take delivery by the end of October. Stellantis, the parent company of Jeep, Chrysler, Dodge, Ram, and others, will do the same for electric sales through the end of the year. No word yet on what happens after these deals expire.
Incentives like the federal tax credit for EVs aren’t meant to last forever, of course. In theory, their purpose is to lift up a new technology until it can compete at scale with the tech that has been around forever.
Whether electric cars have reached that point is a contentious question. Ford has only just announced a roadmap to overhaul its entire EV production system in order to stop losing billions on electric vehicles. Hyundai’s EVs are profitable — or, at least they were before the Trump administration began monkeying with tax incentives and tariffs. A batch of more affordable EVs are on the way, though the ever-changing map of tariffs makes it unclear exactly how much they’ll cost when they finally arrive.
The short-term picture may well be that electric cars continue to be a loss leader for some automakers still trying to find their footing in the space. Whether their shareholders will tolerate this long enough for the margins to become sustainable — well, that’s the real question.
Current conditions: In the Atlantic, the tropical storm that could, as it develops, take the name Jerry is making its way westward toward the U.S. • In the Pacific, Hurricane Priscilla strengthened into a Category 2 storm en route to Arizona and the Southwest • China broke an October temperature record with thermometers surging near 104 degrees Fahrenheit in the southeastern province of Fujian.
The Department of Energy appears poised to revoke awards to two major Direct Air Capture Hubs funded by the Infrastructure Investment and Jobs Act in Louisiana and Texas, Heatmap’s Emily Pontecorvo reported Tuesday. She got her hands on an internal agency project list that designated nearly $24 billion worth of grants as “terminated,” including Occidental Petroleum’s South Texas DAC Hub and Louisiana's Project Cypress, a joint venture between the DAC startups Heirloom and Climeworks. An Energy Department spokesperson told Emily that he was “unable to verify” the list of canceled grants and said that “no further determinations have been made at this time other than those previously announced,”referring to the canceled grants the department announced last week. Christoph Gebald, the CEO of Climeworks, acknowledged “market rumors” in an email, but said that the company is “prepared for all scenarios.” Heirloom’s head of policy, Vikrum Aiyer, said the company wasn’t aware of any decision the Energy Department had yet made.
While the list floated last week showed the Trump administration’s plans to cancel the two regional hydrogen hubs on the West Coast, the new list indicated that the Energy Department planned to rescind grants for all seven hubs, Emily reported. “If the program is dismantled, it could undermine the development of the domestic hydrogen industry,” Rachel Starr, the senior U.S. policy manager for hydrogen and transportation at Clean Air Task Force told her. “The U.S. will risk its leadership position on the global stage, both in terms of exporting a variety of transportation fuels that rely on hydrogen as a feedstock and in terms of technological development as other countries continue to fund and make progress on a variety of hydrogen production pathways and end uses.”
Remember the Tesla announcement I teased in yesterday’s newsletter? The predictions proved half right: The electric automaker did, indeed, release a cheaper version of its midsize SUV, the Model Y, with a starting price just $10 shy of $40,000. Rather than a new Roadster or potential vacuum cleaner, as the cryptic videos the company posted on CEO Elon Musk’s social media site hinted, the second announcement was a cheaper version of the Model 3, already the lower-end sedan offering. Starting at $36,990, InsideEVs called it “one of the most affordable cars Tesla has ever sold, and the cheapest in 2025.” But it’s still a far cry from Musk’s erstwhile promise to roll out a Tesla for less than $30,000.
That may be part of why the company is losing market share. As Heatmap’s Matthew Zeitlin reported, Tesla’s slice of the U.S. electric vehicle sales sank to its lowest-ever level in August despite Americans’ record scramble to use the federal tax credits before the September 30 deadline President Donald Trump’s new tax law set. General Motors, which sold more electric vehicles in the third quarter of this year than in all of 2024, offers the cheapest battery-powered passenger vehicle on the market today, the Chevrolet Equinox, which starts at $35,100.
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Trump’s pledge to revive the United States’ declining coal industry was always a gamble — even though, as Matthew reported in July, global coal demand is rising. Three separate stories published Tuesday show just how stacked the odds are against a major resurgence:
As you may recall from two consecutive newsletters last month, Secretary of Energy Chris Wright said “permitting reform” was “the biggest remaining thing” in the administration’s agenda. Yet Republican leaders in Congress expressed skepticism about tacking energy policy into the next reconciliation bill. This week, however, Utah Senator Mike Lee, the chairman of the Senate Committee on Energy and Natural Resources, called for a legislative overhaul of the National Environmental Policy Act. On Monday, the pro-development social media account Yimbyland — short for Yes In My Back Yard — posted on X: “Reminder that we built the Golden Gate Bridge in 4.5 years. Today, we wouldn’t even be able to finish the environmental review in 4.5 years.” In response, Lee said: “It’s time for NEPA reform. And permitting reform more broadly.”
Last month, a bipartisan permitting reform bill got a hearing in the House of Representatives. But that was before the government shutdown. And sources familiar with Democrats’ thinking have in recent months suggested to me that the administration’s gutting of so many clean energy policies has left Republicans with little to bargain with ahead of next year’s midterm elections.
Soon-to-be Japanese prime minister Sanae Takaichi.Yuichi Yamazaki - Pool/Getty Images
On Saturday, Japan’s long-ruling Liberal Democratic Party elected its former economic minister, Sanae Takaichi, as its new leader, putting her one step away from becoming the country’s first woman prime minister. Under previous administrations, Japan was already on track to restart the reactors idled after the 2011 Fukushima disaster. But Takaichi, a hardline conservative and nationalist who also vowed to re-militarize the nation, has pushed to speed up deployment of new reactors and technologies such as fusion in hopes of making the country 100% self-sufficient on energy.
“She wants energy security over climate ambition, nuclear over renewables, and national industry over global corporations,” Mika Ohbayashi, director at the pro-clean-energy Renewable Energy Institute, told Bloomberg. Shares of nuclear reactor operators surged by nearly 7% on Monday on the Tokyo Stock Exchange, while renewable energy developers’ stock prices dropped by as much as 15%
Researchers at the United Arab Emirates’ University of Sharjah just outlined a new method to transform spent coffee grounds and a commonly used type of plastic used in packaging into a form of activated carbon that can be used for chemical engineering, food processing, and water and air treatments. By repurposing the waste, it avoids carbon emitting from landfills into the atmosphere and reduces the need for new sources of carbon for industrial processes. “What begins with a Starbucks coffee cup and a discarded plastic water bottle can become a powerful tool in the fight against climate change through the production of activated carbon,” Dr. Haif Aljomard, lead inventor of the newly patented technology, said in a press release.