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Close your eyes and think of the American West. What do you see? The sandstone towers of Monument Valley. The dusty ruts of a wagon trail leading through a clapboard town. A cowboy on horseback.
Remove the horse and the mythic image of the American frontier collapses. But across the desert states — and in particular, in Arizona, the cinematic ideal of the West — extreme heat is making the land practically uninhabitable for horses. In 2018, nearly 200 mustangs were found dead near a dried-up water hole on the west side of the Navajo Nation, and now, with 18 consecutive 110-plus degree days in Phoenix and counting, longtime equestrians in the state are considering hitching up the trailer and moving to cooler climes.
“Tonight I think it gets down to 87, just for an hour, and then it goes back up,” Quincy Roxburgh, who moved to the region from the Sacramento area and owns four horses, told me late last week. “We don’t get that break from the heat [like you do in California]. I feel so bad for the horses. I’ve never dealt with anything like this.”
With an estimated $1.3 billion local equestrian industry, Phoenix has been described as a “horse mecca,” particularly when it comes to Arabians. Every year the city hosts the biggest Arabian horse gathering in the world, drawing more than 2,400 horses with some $3 million in prize money on the line. WestWorld, the fifth most-popular equestrian facility in the country, is located in nearby Scottsdale — “the West’s Most Western Town” — and has undergone a $56-million renovation that included the addition of climate-controlled stalls. Its outdoor arenas, though, still bake in the heat. You begin to understand why equestrian events don’t typically get scheduled for the Arizona summers.
But that doesn’t mean much for the horses that spend the year in corrals nearby. Like most mammals, horses pant; unlike most mammals, when panting becomes ineffective around 94 degrees, they’ll sweat, similar to humans. And horses are enthusiastic sweaters: A horse can produce a quarter of a liter of sweat per minute in order to cool itself down, Equus reports — that is, about the capacity of one large Nalgene water bottle in the time it takes you to pop a bag of popcorn.
This means horses face the same risk as people when the air is humid and the efficiency of evaporation slows down. “The thing that saves us [in Arizona] is the low humidity, typically,” Roxburgh said.
In addition to being champion sweaters, though, horses are four-legged space heaters. Because they’re so muscular (and muscles produce heat), horses warm up three to 10 times faster than people do, Michael Lindinger, an animal and exercise physiologist at the University of Guelph, has found. According to his research, just 17 minutes of “moderate intensity exercise in hot, humid weather” can put a horse in the danger zone.
Even eating and digesting can warm a horse up. “Arabians, your Spanish-bred horses — heavy, big-boned warmbloods — we call those ‘easy keepers,’” Catherine Enright of Sorum Veterinary Services, in Scottsdale, Arizona, explained to me. “Those have a propensity to have more risk of foundering in this heat than other equine breeds.”
Founder — a heat-related hoof condition that can require euthanasia in extreme cases and that Roxburgh said she’s “scared to death” of — can be induced by something as ordinary and horsey as eating grass. As Enright explained, “if you have grass pastures, which are very hard to come by in Arizona, we recommend that you only graze [your horses] at night or very, very early in the morning, and they come in before noon,” when the sugar in the grass is highest. Because of the way a horse’s metabolism works, “sugar, starch, carbs — those three ingredients are a death sentence to easy keepers in this heat.”
Enright additionally suggested not letting horses out during the day — and indeed many horsemen and women across the Valley of the Sun have been rising pre-dawn to exercise and feed their animals. She also suggestedputting up misters to help keep the horses cool. Roxburgh herself has invested in a large, SUV-sized swamp cooler for her horses, which she pointed out has the additional advantage of keeping her cool during barn chores.
But what about horses that don’t have access to tubs of water, misters, and even their own ACs?
The Phoenix area is home to some 430 wild horses that live along a river in the Tonto National Forest, on the northeastern outskirts of the city, beyond Scottsdale. That “wild” moniker is a bit of a contentious issue: The U.S. Forest Service claims the horses are “descended from … trespassing livestock” and thus they are not federally protected as “wild horses,” and the herd is instead overseen by a nonprofit, the Salt River Wild Horse Management Group, which contends the lineage goes back to the 18th century.
When I spoke to Simone Netherlands, the founder and president of the volunteer management group, I braced myself for the worst: horses without access to state-of-the-art barn misters dropping from the heat.
“I would say that the Salt River wild horses are the only ones not affected by the heat,” she told me instead.
In fact, her group is far more worried about keeping the rescue horses at its facilities cool. That’s because the Salt River herd “will stand in the middle of the river to cool off,” giving them enviable relief when the temperatures climb into the triple digits — “and so they’re the lucky ones.”
The way Netherlands tells it, it makes sense; the herd “evolved and learned to deal with the heat,” just like other desert animals do. The horses that can’t take Arizona’s seasonal extremes — like, say, the memorable 120-degree day last year that Netherlands, Roxburgh, and Enright all mentioned to me — are in theory weeded out, although Netherlands says they haven’t had a horse die from the heat since the monitoring group was established in 2015. Any culling was likely done generations ago: “That’s why we actually don’t have black horses in the Salt River herd, because they would not survive the heat,” she said.
Of course, not all horses are lucky enough to have a river flowing through their turf. Netherlands also told me that Arizona doesn’t have a law that specifically requires domestic horses be provided shade.
The heat is part of the myth of the West, too: The heat wave frying Phoneix has been called an endurance test, and it’s one many locals proudly embrace. “National media describe metro Phoenix’s string of 110-degree-plus days as if it were an apocalypse,” one recent editorial in the Arizona Republic boasted. “But we learned long ago how to adapt.” But unlike the wild horses, that adaptation involves easy access to AC, something that isn’t at the disposal of everyone, including outdoor domestic animals and the people who diligently labor — or were hired to labor — to take care of them.
And so, until the heat breaks, there will be more pre-dawn mornings, more calls to the overloaded vets, more barn misters to be installed. When saying farewell to Enright, I wished her, optimistically, cool days ahead. “Yeah,” she replied dryly. “There won’t be.”
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And more of the week’s top news about renewable energy conflicts.
1. Nassau County, New York – Opponents of Equinor’s offshore Empire Wind project are now suing to stop construction after the Trump administration quietly lifted its stop-work order.
2. Somerset County, Maryland – A referendum campaign in rural Maryland seeks to restrict solar development on farmland.
3. Tazewell County, Virginia – An Energix solar project is still in the works in this rural county bordering West Virginia, despite a restrictive ordinance.
4. Allan County, Indiana – This county, which includes portions of Fort Wayne, will be holding a hearing next week on changing its current solar zoning rules.
5. Madison County, Indiana – Elsewhere in Indiana, Invenergy has abandoned the Lone Oak solar project amidst fervent opposition and mounting legal hurdles.
6. Adair County, Missouri – This county may soon be home to the largest solar farm in Missouri and is in talks for another project, despite having a high opposition intensity index in the Heatmap Pro database.
7. Newtown County, Arkansas – A fifth county in Arkansas has now banned wind projects.
8. Oklahoma County, Oklahoma – A data center fight is gaining steam as activists on the ground push to block the center on grounds it would result in new renewable energy projects.
9. Bell County, Texas – Fox News is back in our newsletter, this time for platforming the campaign against solar on land suitable for agriculture.
10. Monterey County, California – The Moss Landing battery fire story continues to develop, as PG&E struggles to restart the remaining battery storage facility remaining on site.
A conversation with Biao Gong of Morningstar
This week’s conversation is with Biao Gong, an analyst with Morningstar who this week published an analysis looking at the credit risks associated with offshore wind projects. Obviously I wanted to talk to him about the situation in the U.S., whether it’s still a place investors consider open for business, and if our country’s actions impact the behavior of others.
The following conversation has been lightly edited for clarity.
What led you to write this analysis?
What prompted me was our experience in assigning [private] ratings to offshore wind projects in Europe and wanted to figure out what was different [for rating] with onshore and offshore wind. It was the result of our recent work, which is private, but we’ve seen the trend – a lot of the big players in the offshore wind space are kind of trying to partner up with private equity firms to sell their interests, their operating offshore wind assets. But to raise that they’ll need credit ratings and we’ve seen those transactions. This is a growing area in Europe, because Europe has to rely on offshore wind to achieve its climate goals and secure their energy independence.
The report goes through risks in many ways, including challenging conditions for construction. Tell me about the challenges that offshore wind faces specifically as an investment risk.
The principle behind offshore wind is so different than onshore wind. You’re converting wind energy to electricity but obviously there are a bunch of areas where we believe it is riskier. That doesn’t mean you can’t fund those projects but you need additional mitigants.
This includes construction risk. It can take three to five years to complete an offshore wind project. The marine condition, the climate condition, you can’t do that [work] throughout the year and you need specialized vehicles, helicopters, crews that are so labor intensive. That’s versus onshore, which is pre-fabricated where you have a foundation and assemble it. Once you have an idea of the geotechnical conditions, the risk is just less.
There’s also the permitting process, which can be very challenging. How do you not interrupt the marine ecosystem? That’s something the regulators pay attention to. It’s definitely more than an onshore project, which means you need other mitigants for the lender to feel comfortable.
With respect to the permitting risk, how much of that is the risk of opposition from vacation towns, environmentalists, fisheries?
To be honest, we usually come in after all the critical permitting is in place, before money is given by a lender, but I also think that on the government’s side, in Europe at least, they probably have to encourage the development. And to put out an auction for an area you can build an offshore wind project, they must’ve gone through their own assessment, right? They can’t put out something that they also think may hurt an ecosystem, but that’s my speculation.
A country that did examine the impacts and offer lots of ocean floor for offshore is the U.S. What’s your take on offshore wind development in our country?
Once again, because we’re a rating agency, we don’t have much insight into early stage projects. But with that, our view is pretty gloomy. It’s like, if you haven’t started a project in the U.S., no one is going to buy it. There’s a bunch of projects already under construction, and there was the Empire Wind stop order that was lifted. I think that’s positive, but only to a degree, right? It just means this project under construction can probably go ahead. Those things will go ahead and have really strong developers with strong balance sheets. But they’re going to face additional headwinds, too, because of tariffs – that’s a different story.
We don’t see anything else going ahead.
Does the U.S. behaving this way impact the view you have for offshore wind in other countries, or is this an isolated thing?
It’s very isolated. Europe is just going full-steam ahead because the advantage here is you can build a wind farm that provides 2 or 3 gigawatts – that’s just massive. China, too. The U.S. is very different – and not just offshore. The entire renewables sector. We could revisit the U.S. four or five years from today, but [the U.S.] is going to be pretty difficult for the renewables sector.
What I’m hearing from developers and CEOs about the renewable energy industry after the Inflation Reduction Act
As the Senate deliberates gutting the Inflation Reduction Act’s clean electricity tax credits, renewable energy developers and industry insiders are split about how bad things might get for the sector. But the consensus is that things will undoubtedly get worse.
Almost everyone I talked to insisted that solar and wind projects further along in construction would be insulated from an IRA repeal. Some even argued that spiking energy demand and other macro tailwinds might buffer the wind and solar industries from the demolition of the law.
But between the lines, and beneath the talking points and hopium, executives are fretting that lots of future investments are in jeopardy. And the most pessimistic take: almost all projects will have their balance sheets and time-tables impacted in some way that’ll at minimum increase their budget costs.
“It’s hard to imagine, if the legislation passes in its current form, that it wouldn’t impact all projects,” said Rob Collier, CEO of renewable energy transaction platform LevelTen.
Even industry analysts with the gloomiest views of the repeal say there’s plenty of projects that will keep chugging along and might even become more valuable to investors if they’re close enough to construction or operation. This aligns with recent analysis from BloombergNEF, which found the House bill would diminish our nation’s renewables build-out – but not entirely end its pace.
“The more useful way to break down which project may be hit the hardest is where the projects are going to fall in their development life-cycle,” Collier said. “Projects that have either started construction or have the ability to start construction … are going to very likely rise in terms of their appeal and attractiveness and those projects will be at a premium, if they’re able to skate through the legislative risk and qualify for tax credits.”
There is a more optimistic industry view that believes increased project costs will just be passed along to consumers via higher electricity prices. The American people will in essence have to pick up the tab where the federal tax code left it. Optimists also cite the increased use of power purchase agreements, or PPAs, between renewables developers and entities who need a lot of electricity, like big tech companies. By signing these PPAs, buyers are subsidizing the construction of projects but also insulating themselves from the risk of rising electricity prices.
The most bullish perspective I heard was from Nick Cohen, the CEO of Doral Renewables, who told me deals like these combined with rising premiums for quick energy on the grid may obviate lost credits in a “zero-incentive environment.”
“It’s not the end of the world,” Cohen told me. “If you’re in construction or you’re going to be in construction very soon, you’re fine.”
But Collier called Cohen’s prediction an “experiment” in customers’ willingness to pay for new energy: “If we’re talking about 40%, 50%, 60% of a project’s capital stack now being at risk because of tax credits, those are pretty large price increases.”
I spoke to multiple companies that have been inking massive deals as this legislation has progressed — although many were not nearly as sanguine about the industry’s future prospects as Doral. Like rPlus Energies, which disclosed last week that it closed a commitment for more than $500 million in tax equity investments for a solar and storage project in Utah. rPlus CEO Luigi Resta told me that the legislation “certainly has posed concern from our investors and from the organization” but the project was so far along that the tax equity investment market wasn’t phased by the bill.
“Many people in my company, myself included, have been doing this for more than 20 years. We’ve seen the starts and stops related to ITC and PTC in solar and wind, in multiple cycles, and this feels like another cycle,” Resta told me. “When the IRA passed, everybody was exuberant. And now the runway looks like it may have a cliff. But for us, our mantra since the beginning of the year has been ‘proceed with caution, preserve and protect.’”
However, crucially, it is important to focus on how that caution looks: Resta told me the company has completely paused new contracting while the company is completing the projects it is currently developing.
One government affairs representative for a large and prominent U.S. renewables developer, who spoke on the condition of anonymity to preserve relationships, told me that “whatever rollback occurs will just result in higher electricity prices over time.” In the near term, the only language that would truly gut projects in progress today would be “foreign entity of concern” restrictions that would broadly impact any component even remotely connected to Chinese industries. Similar language all but kneecapped the entire IRA electric vehicle consumer credit.
“It included definitions of what it means to be a foreign company that were really vague,” the government affairs representative said. “Anyone who does any business with China essentially can’t benefit from the credit. That was a really challenging outcome from the House that hopefully the Senate is going to fix.” If this definition became law, this source said, it would be the final straw that “freezes investment” in renewable energy projects.
Ultimately, after speaking to CEO after CEO this week, I’ve been left with an impression that business activity in renewables hasn’t really subsided after the House bill passed, and that it’ll be the Senate bill that undoubtedly defines the future of renewable energy for years to come.
Whether that chamber remains the “cooling saucer” it once was will be the decider.