You’re out of free articles.
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
Sign In or Create an Account.
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Welcome to Heatmap
Thank you for registering with Heatmap. Climate change is one of the greatest challenges of our lives, a force reshaping our economy, our politics, and our culture. We hope to be your trusted, friendly, and insightful guide to that transformation. Please enjoy your free articles. You can check your profile here .
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Subscribe to get unlimited Access
Hey, you are out of free articles but you are only a few clicks away from full access. Subscribe below and take advantage of our introductory offer.
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Create Your Account
Please Enter Your Password
Forgot your password?
Please enter the email address you use for your account so we can send you a link to reset your password:
Data is elusive — and expensive.
Today, if a company claims to run on “100% clean power,” that generally means it’s adding up its electricity use for the entire year, then offsetting any fossil fuel-generated electricity through the purchase of renewable energy certificates, a.k.a. RECs. So a New York-based firm using natural gas to power its data center at night can offset that dirty power by purchasing RECs generated by a California-based solar farm in the middle of the day, so long as energy production and procurement happen within the same year.
We call this system “annual matching,” and it may not be much longer for this world.
The U.S. Treasury Department announced in December that, to qualify for the most generous subsidies under the Inflation Reduction Act’s hydrogen production tax credit, clean hydrogen must be produced using a relatively new source of carbon-free electricity generated within the same hour it’s used and in roughly the same location. The hourly matching requirement, which will take effect in 2028, could compel utilities, grid operators, energy producers and consumers to adopt new systems for clean energy accounting, ultimately laying the groundwork for a 24/7 clean electricity market that extends far beyond the hydrogen sector.
Energy system experts generally hailed the move, and not just because without it, electricity-hungry hydrogen production could potentially do more harm to the climate than good. Annual matching, also, is no longer serving its original purpose of incentivizing the buildout of new renewables. When wind and solar were more expensive than fossil fuels, developers could make up the cost difference by selling annually-matched RECs. But today, wind and solar are often the cheapest energy options available.
That’s not to say everyone was in favor of hourly matching, however. Many of the companies that underpin the U.S.’s clean energy generation and accounting systems, some major hydrogen players, and even a number of Senate Democrats say that moving to hourly matching in the next four years could not only prove too logistically challenging, but also lead to infeasibly high costs for clean hydrogen that will hamper the growth of the emerging industry. More than a year of furious lobbying, public commenting, and punditry over the future of America’s nascent hydrogen industry hinges on this question: Can we pull off verifiable 24/7 clean energy?
There’s an emerging ecosystem of companies trying to help do just that. Granular Energy is a European startup creating software to help utilities and power suppliers move toward 24/7 energy matching by telling them where and when clean energy is most needed. “When you get down to the hourly level,” Natalie Valentin, Granular’s commercial lead for North America, told me, “it can help drive investment in the types of technologies — whether it’s battery storage, clean firm generation, or renewable generation.”
Utilities and power suppliers generally have hourly generation data on hand, Valentin said. It’s just that the energy attribution certificates they receive from tracking systems and registries for renewable energy credits don’t usually include this information. “This data is very readily available,” she told me. “What we’re helping to do is put it into a tool that creates transparency, it streamlines the operations, it has that audit trail that's preventing any double counting.”
Granular links the information from energy certificates with the utility or power provider’s internal metering data to provide an hour-by-hour snapshot of the supplier’s energy mix. That then gives energy suppliers the ability to offer hourly-matched green power programs to their customers.
All of this would be simpler if electricity customers had insight into their hourly electricity usage in the first place, or if the tracking systems provided suppliers with time-matched certificates upfront. But as it stands, most customers don’t have meters that provide this level of detail, making it difficult for them to understand where their energy is coming from. And out of the nation’s 10 renewable energy credit tracking systems and registries, seven don’t report hourly information.
The three that do include the nation’s largest grid operator, PJM, the nonprofit Midwest Renewable Energy Tracking System, and the North American Renewables Registry. Seattle-based LevelTen Energy will utilize the data from these three entities to create a new marketplace for buying, selling, and managing hourly-matched energy certificates, to be launched later this year in regions where hourly tracking exists. LevelTen is building this platform in partnership with the Intercontinental Exchange, a tech company that operates global financial exchanges. Other partners include Google and Microsoft, each of which has announced plans to move to hourly matching by 2030.
“We’re looking to provide an end-to-end experience so people can indicate, here's where we have demand,” explained Katie Soroye, a LevelTen executive. Crucially, the platform will also ensure that hourly matching certificates are retired once they’re purchased to prevent double-counting.
The hope is that the seven tracking systems that lack hourly matching capabilities will soon be either persuaded or mandated to develop them, leading to a country-wide granular certificate marketplace — something the clean hydrogen tax rules were designed to help expedite. Once the mandate is finalized, the Center for Resource Solutions found, most of the tracking systems could phase in hourly matching within two years.
That doesn’t mean they’re eager to make the change, with many citing cost, low demand, and in some cases lack of data availability and confusion over how to handle a more complex dataset as top concerns with hourly matching. Cost is also a major concern for the hydrogen industry overall.
“To the extent that 24/7 works, it has to increase hydrogen prices,” said Aaron Bergman, a fellow at the nonprofit research group Resources for the Future, although he acknowledged that hourly matching is also likely to reduce emissions. “Now, I think what’s challenging is, is that going to be enough to interfere with the ability to really start building out green hydrogen?”
The American Clean Power Association thinks so. Its members estimate “a 20-150% price premium for hourly matched hydrogen production” because electrolyzers, the devices used to make clean hydrogen, will only be able to operate when clean electricity is available. The trade group recommends waiting until 2032 to implement hourly matching, saying this will give the market more time to mature and lower prices through economies of scale.
The whole industry is hardly aligned on this question. Seven companies, including the world’s largest hydrogen producer, filed a joint letter with Treasury officials before the draft rules were released urging them to require 24/7 hourly matching by 2028. “Hourly matching will catalyze cutting-edge, flexible electrolyzer technologies and establish a flourishing and world-leading domestic U.S. advanced electrolyzer manufacturing base,” the letter said.
The rule-making process will continue with a public hearing scheduled for later this month. But assuming the hourly-matching requirement stays, it will certainly add momentum to what’s become a movement for 24/7 clean electricity. Even the U.S. federal government has committed to sourcing 100% of their facility’s electricity from carbon-free sources, half of which will be hourly matched by 2030.
“Time is ticking,” said Bergman. “It’s really standing up something that is relatively new in a relatively short period of time.” Some degree of delays and logistical roadblocks may prove inevitable. But, he said, “it certainly can be done.”
Editor’s note: This story has been updated to clarify that a new platform from LevelTen Energy is distinct from the Granular Certificate Trading Alliance.
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
“We had enough assurance that the president was going to deal with them.”
A member of the House Freedom Caucus said Wednesday that he voted to advance President Trump’s “big, beautiful bill” after receiving assurances that Trump would “deal” with the Inflation Reduction Act’s clean energy tax credits – raising the specter that Trump could try to go further than the megabill to stop usage of the credits.
Representative Ralph Norman, a Republican of North Carolina, said that while IRA tax credits were once a sticking point for him, after meeting with Trump “we had enough assurance that the president was going to deal with them in his own way,” he told Eric Garcia, the Washington bureau chief of The Independent. Norman specifically cited tax credits for wind and solar energy projects, which the Senate version would phase out more slowly than House Republicans had wanted.
It’s not entirely clear what the president could do to unilaterally “deal with” tax credits already codified into law. Norman declined to answer direct questions from reporters about whether GOP holdouts like himself were seeking an executive order on the matter. But another Republican holdout on the bill, Representative Chip Roy of Texas, told reporters Wednesday that his vote was also conditional on blocking IRA “subsidies.”
“If the subsidies will flow, we’re not gonna be able to get there. If the subsidies are not gonna flow, then there might be a path," he said, according to Jake Sherman of Punchbowl News.
As of publication, Roy has still not voted on the rule that would allow the bill to proceed to the floor — one of only eight Republicans yet to formally weigh in. House Speaker Mike Johnson says he’ll, “keep the vote open for as long as it takes,” as President Trump aims to sign the giant tax package by the July 4th holiday. Norman voted to let the bill proceed to debate, and will reportedly now vote yes on it too.
Earlier Wednesday, Norman said he was “getting a handle on” whether his various misgivings could be handled by Trump via executive orders or through promises of future legislation. According to CNN, the congressman later said, “We got clarification on what’s going to be enforced. We got clarification on how the IRAs were going to be dealt with. We got clarification on the tax cuts — and still we’ll be meeting tomorrow on the specifics of it.”
Neither Norman nor Roy’s press offices responded to a request for comment.
The foreign entities of concern rules in the One Big Beautiful Bill would place gigantic new burdens on developers.
Trump campaigned on cutting red tape for energy development. At the start of his second term, he signed an executive order titled, “Unleashing Prosperity Through Deregulation,” promising to kill 10 regulations for each new one he enacted.
The order deems federal regulations an “ever-expanding morass” that “imposes massive costs on the lives of millions of Americans, creates a substantial restraint on our economic growth and ability to build and innovate, and hampers our global competitiveness.” It goes on to say that these regulations “are often difficult for the average person or business to understand,” that they are so complicated that they ultimately increase the cost of compliance, as well as the risks of non-compliance.
Reading this now, the passage echoes the comments I’ve heard from industry groups and tax law experts describing the incredibly complex foreign entities of concern rules that Congress — with the full-throated backing of the Trump administration — is about to impose on clean energy projects and manufacturers. Under the One Big Beautiful Bill Act, wind and solar, as well as utility-scale energy storage, geothermal, nuclear, and all kinds of manufacturing projects will have to abide by restrictions on their Chinese material inputs and contractual or financial ties with Chinese entities in order to qualify for tax credits.
“Foreign entity of concern” is a U.S. government term referring to entities that are “owned by, controlled by, or subject to the jurisdiction or direction of” any of four countries — Russia, Iran, North Korea, and most importantly for clean energy technology, China.
Trump’s tax bill requires companies to meet increasingly strict limits on the amount of material from China they use in their projects and products. A battery factory starting production next year, for example, would have to ensure that 60% of the value of the materials that make up its products have no connection to China. By 2030, the threshold would rise to 85%. The bill lays out similar benchmarks and timelines for clean electricity projects, as well as other kinds of manufacturing.
But how companies should calculate these percentages is not self-evident. The bill also forbids companies from collecting the tax credits if they have business relationships with “specified foreign entities” or “foreign-influenced entities,” terms with complicated definitions that will likely require guidance from the Treasury for companies to be sure they pass the test.
Regulatory uncertainty could stifle development until further guidance is released, but how long that takes will depend on if and when the Trump administration prioritizes getting it done. The One Big Beautiful Bill Act contains a lot of other new tax-related provisions that were central to the Trump campaign, including a tax exemption for tips, which are likely much higher on the department’s to-do list.
Tax credit implementation was a top priority for the Biden administration, and even with much higher staffing levels than the department currently has, it took the Treasury 18 months to publish initial guidance on foreign entities of concern rules for the Inflation Reduction Act’s electric vehicle tax credit. “These things are so unbelievably complicated,” Rachel McCleery, a former senior advisor at the Treasury under Biden, told me.
McCleery questioned whether larger, publicly-owned companies would be able to proceed with major investments in things like battery manufacturing plants until that guidance is out. She gave the example of a company planning to pump out 100,000 batteries per year and claim the per-kilowatt-hour advanced manufacturing tax credit. “That’s going to look like a pretty big number in claims, so you have to be able to confidently and assuredly tell your shareholder, Yep, we’re good, we qualify, and that requires a certification” by a tax counsel, she said. To McCleery, there’s an open question as to whether any tax counsel “would even provide a tax opinion for publicly-traded companies to claim credits of this size without guidance.”
John Cornwell, the director of policy at the Good Energy Collective, which conducts research and advocacy for nuclear power, echoed McCleery’s concerns. “Without very clear guidelines from the Treasury and IRS, until those guidelines are in place, that is going to restrict financing and investment,” Cornwell told me.
Understanding what the law requires will be the first challenge. But following it will involve tracking down supply chain data that may not exist, finding alternative suppliers that may not be able to fill the demand, and establishing extensive documentation of the origins of components sourced through webs of suppliers, sub-suppliers, and materials processors.
The Good Energy Collective put out an issue brief this week describing the myriad hurdles nuclear developers will face in trying to adhere to the tax credit rules. Nuclear plants contain thousands of components, and documenting the origin of everything from “steam generators to smaller items like specialized fasteners, gaskets, and electronic components will introduce substantial and costly administrative burdens,” it says. Additionally the critical minerals used in nuclear projects “often pass through multiple processing stages across different countries before final assembly,” and there are no established industry standards for supply chain documentation.
Beyond the documentation headache, even just finding the materials could be an issue. China dominates the market for specialized nuclear-grade materials manufacturing and precision component fabrication, the report says, and alternative suppliers are likely to charge premiums. Establishing new supply chains will take years, but Trump’s bill will begin enforcing the sourcing rules in 2026. The rules will prove even more difficult for companies trying to build first-of-a-kind advanced nuclear projects, as those rely on more highly specialized supply chains dominated by China.
These challenges may be surmountable, but that will depend, again, on what the Treasury decides, and when. The Department’s guidance could limit the types of components companies have to account for and simplify the documentation process, or it could not. But while companies wait for certainty, they may also be racking up interest. “The longer there are delays, that can have a substantial risk of project success,” Cornwell said.
And companies don’t have forever. Each of the credits comes with a phase-out schedule. Wind manufacturers can only claim the credits until 2028. Other manufacturers have until 2030. Credits for clean power projects will start to phase down in 2034. “Given the fact that a lot of these credits start lapsing in the next few years, there’s a very good chance that, because guidance has not yet come out, you’re actually looking at a much smaller time frame than than what is listed in the bill,” Skip Estes, the government affairs director for Securing America’s Energy Future, or SAFE, told me.
Another issue SAFE has raised is that the way these rules are set up, the foreign sourcing requirements will get more expensive and difficult to comply with as the value of the tax credits goes down. “Our concern is that that’s going to encourage companies to forego the credit altogether and just continue buying from the lowest common denominator, which is typically a Chinese state-owned or -influenced monopoly,” Estes said.
McCleery had another prediction — the regulations will be so burdensome that companies will simply set up shop elsewhere. “I think every industry will certainly be rethinking their future U.S. investments, right? They’ll go overseas, they’ll go to Canada, which dumped a ton of carrots and sticks into industry after we passed the IRA,” she said.
“The irony is that Republicans have historically been the party of deregulation, creating business friendly environments. This is completely opposite, right?”
On the budget debate, MethaneSAT’s untimely demise, and Nvidia
Current conditions: The northwestern U.S. faces “above average significant wildfire potential” for July • A month’s worth of rain fell over just 12 hours in China’s Hubei province, forcing evacuations • The top floor of the Eiffel Tower is closed today due to extreme heat.
The Senate finally passed its version of Trump’s One Big Beautiful Bill Act Tuesday morning, sending the tax package back to the House in hopes of delivering it to Trump by the July 4 holiday. The excise tax on renewables that had been stuffed into the bill over the weekend was removed after Senator Lisa Murkowski of Alaska struck a deal with the Senate leadership designed to secure her vote. In her piece examining exactly what’s in the bill, Heatmap’s Emily Pontecorvo explains that even without the excise tax, the bill would “gum up the works for clean energy projects across the spectrum due to new phase-out schedules for tax credits and fast-approaching deadlines to meet complex foreign sourcing rules.” Debate on the legislation begins on the House floor today. House Speaker Mike Johnson has said he doesn’t like the legislation, and a handful of other Republicans have already signaled they won’t vote for it.
The Environmental Protection Agency this week sent the White House a proposal that is expected to severely weaken the federal government’s ability to rein in planet-warming pollution. Details of the proposal, titled “Greenhouse Gas Endangerment Finding and Motor Vehicle Reconsideration,” aren’t clear yet, but EPA Administrator Lee Zeldin has reportedly been urging the Trump administration to repeal the 2009 “endangerment finding,” which explicitly identified greenhouse gases as a public health threat and gave the EPA the authority to regulate them. Striking down that finding would “free EPA from the legal obligation to regulate climate pollution from most sources, including power plants, cars and trucks, and virtually any other source,” wrote Alex Guillén at Politico. The title of the proposal suggests it aims to roll back EPA tailpipe emissions standards, as well.
Get Heatmap AM directly in your inbox every morning:
So long, MethaneSAT, we hardly knew ye. The Environmental Defense Fund said Tuesday that it had lost contact with its $88 million methane-detecting satellite, and that the spacecraft was “likely not recoverable.” The team is still trying to figure out exactly what happened. MethaneSAT launched into orbit last March and was collecting data about methane pollution from global fossil fuel infrastructure. “Thanks to MethaneSAT, we have gained critical insight about the distribution and volume of methane being released from oil and gas production areas,” EDF said. “We have also developed an unprecedented capability to interpret the measurements from space and translate them into volumes of methane released. This capacity will be valuable to other missions.“ The good news is that MethaneSAT was far from the only methane-tracking satellite in orbit.
Nvidia is backing a D.C.-based startup called Emerald AI that “enables AI data centers to flexibly adjust their power consumption from the electricity grid on demand.” Its goal is to make the grid more reliable while still meeting the growing energy demands of AI computing. The startup emerged from stealth this week with a $24.5 million seed round led by Radical Ventures and including funding from Nvidia. Emerald AI’s platform “acts as a smart mediator between the grid and a data center,” Nvidia explains. A field test of the software during a grid stress event in Phoenix, Arizona, demonstrated a 25% reduction in the energy consumption of AI workloads over three hours. “Renewable energy, which is intermittent and variable, is easier to add to a grid if that grid has lots of shock absorbers that can shift with changes in power supply,” said Ayse Coskun, Emerald AI’s chief scientist and a professor at Boston University. “Data centers can become some of those shock absorbers.”
In case you missed it: California Governor Gavin Newsom on Monday rolled back the state’s landmark Environmental Quality Act. The law, which had been in place since 1970, required environmental reviews for construction projects and had become a target for those looking to alleviate the state’s housing crisis. The change “means most urban developers will no longer have to study, predict, and mitigate the ways that new housing might affect local traffic, air pollution, flora and fauna, noise levels, groundwater quality, and objects of historic or archeological significance,” explainedCal Matters. On the other hand, it could also mean that much-needed housing projects get approved more quickly.
Tesla is expected to report its Q2 deliveries today, and analysts are projecting a year-over-year drop somewhere from 11% to 13%.