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:
With the ongoing disaster approaching its second week, here’s where things stand.

A week ago, forecasters in Southern California warned residents of Los Angeles that conditions would be dry, windy, and conducive to wildfires. How bad things have gotten, though, has taken everyone by surprise. As of Monday morning, almost 40,000 acres of Los Angeles County have burned in six separate fires, the biggest of which, Palisades and Eaton, have yet to be fully contained. The latest red flag warning, indicating fire weather, won’t expire until Wednesday.
Many have questions about how the second-biggest city in the country is facing such unbelievable devastation (some of these questions, perhaps, being more politically motivated than others). Below, we’ve tried to collect as many answers as possible — including a bit of good news about what lies ahead.
A second Santa Ana wind event is due to set in Monday afternoon. “We’re expecting moderate Santa Ana winds over the next few days, generally in the 20 to 30 [mile per hour] range, gusting to 50, across the mountains and through the canyons,” Eric Drewitz, a meteorologist with the Forest Service, told me on Sunday. Drewitz noted that the winds will be less severe than last week’s, when the fires flared up, but he also anticipates they’ll be “more easterly,” which could blow the fires into new areas. A new red flag warning has been issued through Wednesday, signaling increased fire potential due to low humidity and high winds for several days yet.
If firefighters can prevent new flare-ups and hold back the fires through that wind event, they might be in good shape. By Friday of this week, “it looks like we could have some moderate onshore flow,” Drewitz said, when wet ocean air blows inland, which would help “build back the marine layer” and increase the relative humidity in the region, decreasing the chances of more fires. Information about the Santa Anas at that time is still uncertain — the models have been changing, and the wind is tricky to predict the strength of so far out — but an increase in humidity will at least offer some relief for the battered Ventura and Orange Counties.
The Palisades Fire, the biggest in L.A., ripped through the hilly and affluent area between Santa Monica and Malibu, including the Pacific Palisades neighborhood, the second-most expensive zip code in Los Angeles and home to many celebrities. Structures in Big Rock, a neighborhood in Malibu, have also burned. The fire has also encroached on the I-405 and the Getty Villa, and destroyed at least two homes in Mandeville Canyon, a neighborhood of multimillion-dollar homes. Students at nearby University of California, Los Angeles, were told on Friday to prepare for a possible evacuation.
The Eaton Fire, the second biggest blaze in the area, has killed 16 people in Altadena, a neighborhood near Pasadena, according to the Los Angeles Times, making it one of the deadliest fires in the modern history of California.
The 1,000-acre Kenneth fire is 100% contained but still burning near Calabasas and the gated community of Hidden Hills. The Hurst Fire has burned nearly 800 acres and is 89% contained and is still burning near Sylmar, the northernmost neighborhood in L.A. Though there are no evacuation notices for either the Kenneth or the Hurst fires, residents in the L.A. area should monitor the current conditions as the situation continues to be fluid and develop.
The 43-acre Sunset Fire, which triggered evacuations last week in Hollywood and Hollywood Hills, burned no homes and is 100% contained.
The Lidia Fire, which ignited in a remote area south of Acton, California, on Wednesday afternoon, burned 350 acres of brush and is 100% contained.
It can take years to determine the cause of a fire, and investigations typically don’t begin until after the fire is under control and the area is safe to reenter, Edward Nordskog, a retired fire investigator from the Los Angeles Sheriff’s Department, told Heatmap’s Emily Pontecorvo. He also noted, however, that urban fires are typically easier to pinpoint the cause of than wildland fires due to the availability of witnesses and surveillance footage.
The vast majority of wildfires, 85%, are caused by humans. So far, investigators have ruled out lightning — another common fire-starter — because there were no electrical storms in the area when the fires started. In the case of the Palisades Fire, there were no power lines in the area of the ignition, though investigators are now looking into an electrical transmission tower in Eaton Canyon as the possible cause of the deadly fire in Altadena. There have been rumors that arsonists started the fires, but investigators say that scenario is also pretty unlikely due to the spread of the fires and how remote the ignition areas are.
Officially, 24 people have died, but that tally is likely to rise. California Governor Gavin Newsom said Sunday that he expects “a lot more” deaths will be added to the total in the coming days as search efforts continue.
Incoming President Donald Trump slammed the response to the L.A. fires in a Truth Social post on Sunday morning: “This is one of the worst catastrophes in the history of our Country,” he wrote. “They just can’t put out the fires. What’s wrong with them?”
Though there is much blame going around — not all of it founded in reality — the challenges facing firefighters are immense. Last week, because of strong Santa Ana winds, fire crews could not drop suppressants like water or chemical retardant on the initial blazes. (In strong winds, water and retardant will blow away before they reach the flames on the ground.)
Fighting a fire in an urban or suburban area is also different from fighting one in a remote, wild area. In a true wildfire, crews don’t use much water; firefighters typically contain the blazes by creating breaks — areas cleared of vegetation that starve a fire of fuel and keep it from spreading. In an urban or suburban event, however, firefighters can’t simply hack through a neighborhood, and typically have to use water to fight structure fires. Their priority also shifts from stopping the fire to evacuating and saving people, which means putting out the fire itself has to wait.
What’s more, the L.A. area faced dangerous fire weather going into last week — with wind gusts up to 100 miles per hour and dry air — and the persistence of the Santa Ana winds during firefighting operations through the weekend made it extremely difficult for emergency managers to gain a foothold.
Trump and others have criticized Los Angeles for being unprepared for the fires, given reports that some fire hydrants ran dry or had low pressure during operations in Pacific Palisades. According to the Los Angeles Department of Water and Power, about 20% of hydrants were affected, mostly at higher elevations.
The problem isn’t a lack of preparation, however. It’s that the L.A. wildfires are so large and widespread, the county’s preparations were quickly overwhelmed. “We’re fighting a wildfire with urban water systems, and that is really challenging,” Los Angeles Department of Water and Power CEO Janisse Quiñones said in a news conference last week. When houses burn down, water mains can break open. Civilians also put a strain on the system when they use hoses or sprinkler systems to try to protect their homes.
On Sunday, Judy Chu, the Democratic lawmaker representing Altadena, confirmed that fire officials had told her there was enough water to continue the battle in the days ahead. “I believe that we're in a good place right now,” she told reporters. Newsom, meanwhile, has responded to criticism over the water failure by ordering an investigation into the weak or dry hydrants.
So-called “super soaker” planes have had no problem with water access; they’re scooping directly from the ocean.
Yes. Although aerial support was grounded in the early stages of the wildfires due to severe Santa Ana winds, flights resumed during lulls in the storms last week.
There is a misconception, though, that water and retardant drops “put out” fires; they don’t. Instead, aerial support suppresses a fire so crews can get in close and use traditional methods, like cutting a fire break or spraying water. “All that up in the air, all that’s doing is allowing the firefighters [on the ground] a chance to get in,” Bobbie Scopa, a veteran firefighter and author of the memoir Both Sides of the Fire Line, told me last week.
With winds expected to pick up early this week, aerial firefighting operations may be grounded again. “If you have erratic, unpredictable winds to where you’ve got a gust spread of like 20 to 30 knots,” i.e. 23 to 35 miles per hour, “that becomes dangerous,” Dan Reese, a veteran firefighter and the founder and president of the International Wildfire Consulting Group, told me on Friday.
Because of the direction of the Santa Ana winds, wildfire smoke should mostly blow out to sea. But as winds shift, unhealthy air can blow into populated areas, affecting the health of residents.
Wildfire smoke is unhealthy, period, but urban and suburban smoke like that from the L.A. fires can be particularly detrimental. It’s not just trees and brush immolating in an urban fire, it’s also cars, and batteries, and gas tanks, and plastics, and insulation, and other nasty, chemical-filled things catching fire and sending fumes into the air. PM2.5, the inhalable particulates from wildfire smoke, contributes to thousands of excess deaths annually in the U.S.
You can read Heatmap’s guide to staying safe during extreme smoke events here.
“The bad news is, I’m not seeing any rain chances,” Drewitz, the Forest Service meteorologist, told me on Sunday. Though the marine layer will bring wetter air to the Los Angeles area on Friday, his models showed it’ll be unlikely to form precipitation.
Though some forecasters have signaled potential rain at the end of next week, the general consensus is that the odds for that are low, and that any rain there may be will be too light or short-lived to contribute meaningfully to extinguishing the fires.
The chaparral shrublands around Los Angeles are supposed to burn every 30 to 130 years. “There are high concentrations of terpenes — very flammable oils — in that vegetation; it’s made to burn,” Scopa, the veteran firefighter, told me.
What isn’t normal, though, is the amount of rain Los Angeles got ahead of this past spring — 52.46 inches in the preceding two years, the wettest period in the city’s history since the late 1800s — which was followed by a blisteringly hot summer and a delayed start to this year’s rainy season. Since October, parts of Southern California have received just 10% of their normal rainfall
This “weather whiplash” is caused by a warmer atmosphere, which means that plants will grow explosively due to the influx of rain and then dry out when the drought returns, leaving lots of dry fuels ready and waiting for a spark. “This is really, I would argue, a signature of climate change that is going to be experienced almost everywhere people actually live on Earth,” Daniel Swain, a climate scientist at the University of California, Los Angeles, who authored a new study on the pattern, told The Washington Post.
We know less about how climate change may affect the Santa Anas, though experts have some theories.
At least 12,000 structures have burned so far in the fires, which is already exacerbating the strain on the Los Angeles housing market — one of the country’s tightest even before the fires — as thousands of displaced people look for new places to live. “Dozens and dozens of people are going after the same properties,” one real estate agent told the Los Angeles Times. The city has reminded businesses that price gouging — including raising rental prices more than 10% — during an emergency is against the law.
Los Angeles had a shortage of about 370,000 homes before the fires, and between 2021 and 2023, the county added fewer than 30,000 new units per year. Recovery grants and federal aid can lag, and it often takes more than two years for even the first Housing and Urban Development Disaster Recovery Grants’ expenditures to go out.
My colleague Matthew Zeitlin wrote for Heatmap that the economic impact of the Los Angeles fire is already much higher than that of other fires, such as the 2018 Camp fire, partly because of the value of the Pacific Palisades real estate.
The wildfires may “deal a devastating blow to [California’s] fragile home insurance market,” Heatmap’s Matthew Zeitlin wrote last week. In recent years, home insurers have left California or declined to write new policies, at least partially due to the increased risk of wildfires in the state.
Depending on the extent of the damage from the fires, the coffers of California’s FAIR Plan — which insures homeowners who can’t get insurance otherwise, including many in Pacific Palisades and Altadena — could empty, causing it to seek money from insurers, according to the state’s regulations. As Zeitlin writes, “This would mean that Californians who were able to buy private insurance — because they don’t live in a region of the state that insurers have abandoned — could be on the hook for massive wildfire losses.”
First and foremost, sign up for all relevant emergency alerts. Make sure to turn on the sound on your phone and keep it near you in case of a change in conditions. Pack a “go bag” with essentials and consider filling your gas tank now so that you can evacuate at a moment’s notice if needed. Read our guide on what to do if you get a pre-evacuation or an evacuation notice ahead of time so that you’re not scrambling for information if you get an alert.
The free Watch Duty app has become a go-to resource for people affected by the fires, including friends and family of Angelenos who may themselves be thousands of miles away. The app provides information on fire perimeters, evacuation notices, and power outages. Its employees pull information directly from emergency responders’ radio broadcasts and sometimes beat official sources to disseminating it. If you need an endorsement: Emergency responders rely on the app, too.
There are many scams in the wake of disasters as crooks look to take advantage of desperate people — and those who want to help them. To play it safe, you can use a hub like the one established by GoFundMe, which is actively vetting campaigns related to the L.A. fires. If you’re looking to volunteer your time, make a donation of clothing or food, or if you’re able to foster animals the fire has displaced, you can use this handy database from the Mutual Aid Network L.A. There are also many national organizations, such as the Red Cross, that you can connect with if you want to help.
The City of Los Angeles and the Los Angeles Fire Department have asked that do-gooders not bring donations directly to fire stations or shelters; such actions can interfere with emergency operations. Their website provides more information about how you can help — productively — on their website.
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
In practice, direct lithium extraction doesn’t quite make sense, but 2026 could its critical year.
Lithium isn’t like most minerals.
Unlike other battery metals such as nickel, cobalt, and manganese, which are mined from hard-rock ores using drills and explosives, the majority of the world’s lithium resources are found in underground reservoirs of extremely salty water, known as brine. And while hard-rock mining does play a major role in lithium extraction — the majority of the world’s actual production still comes from rocks — brine mining is usually significantly cheaper, and is thus highly attractive wherever it’s geographically feasible.
Reaching that brine and extracting that lithium — so integral to grid-scale energy storage and electric vehicles alike — is typically slow, inefficient, and environmentally taxing. This year, however, could represent a critical juncture for a novel process known as Direct Lithium Extraction, or DLE, which promises to be faster, cleaner, and capable of unlocking lithium across a wider range of geographies.
The traditional method of separating lithium from brine is straightforward but time-consuming. Essentially, the liquid is pumped through a series of vast, vividly colored solar evaporation ponds that gradually concentrate the mineral over the course of more than a year.
It works, but by the time the lithium is extracted, refined, and ready for market, both the demand and the price may have shifted significantly, as evidenced by the dramatic rise and collapse of lithium prices over the past five years. And while evaporation ponds are well-suited to the arid deserts of Chile and Argentina where they’re most common, the geology, brine chemistry, and climate of the U.S. regions with the best reserves are generally not amenable to this approach. Not to mention the ponds require a humongous land footprint, raising questions about land use and ecological degradation.
DLE forgoes these expansive pools, instead pulling lithium-rich brine into a processing unit, where some combination of chemicals, sorbents, or membranes isolate and extricate the lithium before the remaining brine gets injected back underground. This process can produce battery-grade lithium in a matter of hours or days, without the need to transport concentrated brine to separate processing facilities.
This tech has been studied for decades, but aside from a few Chinese producers using it in combination with evaporation ponds, it’s largely remained stuck in the research and development stage. Now, several DLE companies are looking to build their first commercial plants in 2026, aiming to prove that their methods can work at scale, no evaporation ponds needed.
“I do think this is the year where DLE starts getting more and more relevant,” Federico Gay, a principal lithium analyst at Benchmark Mineral Intelligence, told me.
Standard Lithium, in partnership with oil and gas major Equinor, aims to break ground this year on its first commercial facility in Arkansas’s lithium-rich Smackover Formation, while the startup Lilac Solution also plans to commence construction on a commercial plant at Utah’s Great Salt Lake. Mining giant Rio Tinto is progressing with plans to build a commercial DLE facility in Argentina, which is already home to one commercial DLE plant — the first outside of China. That facility is run by the French mining company Eramet, which plans to ramp production to full capacity this year.
If “prices are positive” for lithium, Gay said, he expects that the industry will also start to see mergers and acquisitions this year among technology providers and larger corporations such as mining giants or oil and gas majors, as “some of the big players will try locking in or buying technology to potentially produce from the resources they own.” Indeed, ExxonMobil and Occidental Petroleum are already developing DLE projects, while major automakers have invested, too.
But that looming question of lithium prices — and what it means for DLE’s viability — is no small thing. When EV and battery storage demand boomed at the start of the decade, lithium prices climbed roughly 10-fold through 2022 before plunging as producers aggressively ramped output, flooding the market just as EV demand cooled. And while prices have lately started to tick upward again, there’s no telling whether the trend will continue.
“Everyone seems to have settled on a consensus view that $20,000 a tonne is where the market’s really going to be unleashed,” Joe Arencibia, president of the DLE startup Summit Nanotech, told me, referring to the lithium extraction market in all of its forms — hard rock mining, traditional brine, and DLE. “As far as we’re concerned, a market with $14,000, $15,000 a tonne is fine and dandy for us.”
Lilac Solutions, the most prominent startup in the DLE space, expects that its initial Utah project — which will produce a relatively humble 5,000 metric tons of lithium per year — will be profitable even if lithium prices hit last year’s low of $8,300 per metric ton. That’s according to the company’s CEO Raef Sully, who also told me that because Utah’s reserves are much lower grade than South America’s, Lilac could produce lithium for a mere $3,000 to $3,500 in Chile if it scaled production to 15,000 or 20,000 metric tons per year.
What sets Lilac apart from other DLE projects is its approach to separating lithium from brine. Most companies are pursuing adsorption-based processes, in which lithium ions bind to an aluminum-based sorbent, which removes them from surrounding impurities. But stripping the lithium from the sorbent generally requires a good deal of freshwater, which is not ideal given that many lithium-rich regions are parched deserts.
Lilac’s tech relies on an ion-exchange process in which small ceramic beads selectively capture lithium ions from the brine in their crystalline structure, swapping them for hydrogen ions. “The crystal structure seems to have a really strong attraction to lithium and nothing else,” Sully told me. Acid then releases the concentrated lithium. When compared with adsorption-based tech, he explained, this method demands far fewer materials and is “much more selective for lithium ions versus other ions,” making the result purer and thus cheaper to process into a battery-grade material.
Because adsorption-based DLE is already operating commercially and ion-exchange isn’t, Lilac has much to prove with its first commercial facility, which is expected to finalize funding and begin construction by the middle of this year.
Sully estimates that Lilac will need to raise around $250 million to build its first commercial facility, which has already been delayed due to the price slump. The company’s former CEO and current CTO Dave Snydacker told me in 2023 that he expected to commence commercial operations by the end of 2024, whereas now the company plans to bring its Utah plant online at the end of 2027 or early 2028.
“Two years ago, with where the market was, nobody was going to look at that investment,” Sully explained, referring to its commercial plant. Investors, he said, were waiting to see what remained after the market bottomed out, which it now seems to have done. Lilac is still standing, and while there haven’t yet been any public announcements regarding project funding, Sully told me he’s confident that the money will come together in time to break ground in mid-2026.
It also doesn’t hurt that lithium prices have been on the rise for a few months, currently hovering around $20,000 per tonne. Gay thinks prices are likely to stabilize somewhere in this range, as stakeholders who have weathered the volatility now have a better understanding of the market.
At that price, hard rock mining would be a feasible option, though still more expensive than traditional evaporation ponds and far above what DLE producers are forecasting. And while some mines operated at a loss or mothballed their operations during the past few years, Gay thinks that even if prices stabilize, hard-rock mines will continue to be the dominant source of lithium for the foreseeable future due to sustained global investment across Africa, Brazil, Australia, and parts of Asia. The price may be steeper, but the infrastructure is also well-established and the economics are well-understood.
“I’m optimistic and bullish about DLE, but probably it won’t have the impact that it was thought about two or three years ago,” Gay told me, as the hype has died down and prices have cooled from their record high of around $80,000 per tonne. By 2040, Benchmark forecasts that DLE will make up 15% to 20% of the lithium market, with evaporation ponds continuing to be a larger contributor for the next decade or so, primarily due to the high upfront costs of DLE projects and the time required for them to reach economies of scale.
On average, Benchmark predicts that this tech will wind up in “the high end of the second quartile” of the cost curve, making DLE projects a lower mid-cost option. “So it’s good — not great, good. But we’ll have some DLE projects in the first quartile as well, so competing with very good evaporation assets,” Gay told me.
Unsurprisingly, the technology companies themselves are more bullish on their approach. Even though Arencibia predicts that evaporation ponds will continue to be about 25% cheaper, he thinks that “the majority of future brine projects will be DLE,” and that DLE will represent 25% or more of the future lithium market.
That forecast comes in large part because Chile — the world’s largest producer of lithium from brine — has stated in its National Lithium Strategy that all new projects should have an “obligatory requirement” to use novel, less ecologically disruptive production methods. Other nations with significant but yet-to-be exploited lithium brine resources, such as Bolivia, could follow suit.
Sully is even more optimistic, predicting that as lithium demand grows from about 1.5 million metric tons per year to around 3.5 million metric tons by 2035, the majority of that growth will come from DLE. “I honestly believe that there will be no more hard rock mines built in Australia or the U.S.,” he said, telling me that in ten years time, half of our lithium supply could “easily” come from DLE.
As a number of major projects break ground this year and the big players start consolidating, we’ll begin to get a sense of whose projections are most realistic. But it won’t be until some of these projects ramp up commercial production in the 2028 to 2030 timeframe that DLE’s market potential will really crystalize.
“If you’re not a very large player at the moment, I think it’s very difficult for you to proceed,” Sully told me, reflecting on how lithium’s price shocks have rocked the industry. Even with lithium prices ticking precariously upwards now, the industry is preparing for at least some level of continued volatility and uncertainty.
“Long term, who knows what [prices are] going to be,” Sully said. “I’ve given up trying to predict.”
A chat with CleanCapital founder Jon Powers.
This week’s conversation is with Jon Powers, founder of the investment firm CleanCapital. I reached out to Powers because I wanted to get a better understanding of how renewable energy investments were shifting one year into the Trump administration. What followed was a candid, detailed look inside the thinking of how the big money in cleantech actually views Trump’s war on renewable energy permitting.
The following conversation was lightly edited for clarity.
Alright, so let’s start off with a big question: How do investors in clean energy view Trump’s permitting freeze?
So, let’s take a step back. Look at the trend over the last decade. The industry’s boomed, manufacturing jobs are happening, the labor force has grown, investments are coming.
We [Clean Capital] are backed by infrastructure life insurance money. It’s money that wasn’t in this market 10 years ago. It’s there because these are long-term infrastructure assets. They see the opportunity. What are they looking for? Certainty. If somebody takes your life insurance money, and they invest it, they want to know it’s going to be there in 20 years in case they need to pay it out. These are really great assets – they’re paying for electricity, the panels hold up, etcetera.
With investors, the more you can manage that risk, the more capital there is out there and the better cost of capital there is for the project. If I was taking high cost private equity money to fund a project, you have to pay for the equipment and the cost of the financing. The more you can bring down the cost of financing – which has happened over the last decade – the cheaper the power can be on the back-end. You can use cheaper money to build.
Once you get that type of capital, you need certainty. That certainty had developed. The election of President Trump threw that into a little bit of disarray. We’re seeing that being implemented today, and they’re doing everything they can to throw wrenches into the growth of what we’ve been doing. They passed the bill affecting the tax credits, and the work they’re doing on permitting to slow roll projects, all of that uncertainty is damaging the projects and more importantly costs everyone down the road by raising the cost of electricity, in turn making projects more expensive in the first place. It’s not a nice recipe for people buying electricity.
But in September, I went to the RE+ conference in California – I thought that was going to be a funeral march but it wasn’t. People were saying, Now we have to shift and adjust. This is a huge industry. How do we get those adjustments and move forward?
Investors looked at it the same way. Yes, how will things like permitting affect the timeline of getting to build? But the fundamentals of supply and demand haven’t changed and in fact are working more in favor of us than before, so we’re figuring out where to invest on that potential. Also, yes federal is key, but state permitting is crucial. When you’re talking about distributed generation going out of a facility next to a data center, or a Wal-Mart, or an Amazon warehouse, that demand very much still exists and projects are being built in that middle market today.
What you’re seeing is a recalibration of risk among investors to understand where we put our money today. And we’re seeing some international money pulling back, and it all comes back to that concept of certainty.
To what extent does the international money moving out of the U.S. have to do with what Trump has done to offshore wind? Is that trade policy? Help us understand why that is happening.
I think it’s not trade policy, per se. Maybe that’s happening on the technology side. But what I’m talking about is money going into infrastructure and assets – for a couple of years, we were one of the hottest places to invest.
Think about a European pension fund who is taking money from a country in Europe and wanting to invest it somewhere they’ll get their money back. That type of capital has definitely been re-evaluating where they’ll put their money, and parallel, some of the larger utility players are starting to re-evaluate or even back out of projects because they’re concerned about questions around large-scale utility solar development, specifically.
Taking a step back to something else you said about federal permitting not being as crucial as state permitting–
That’s about the size of the project. Huge utility projects may still need federal approvals for transmission.
Okay. But when it comes to the trendline on community relations and social conflict, are we seeing renewable energy permitting risk increase in the U.S.? Decrease? Stay the same?
That has less to do with the administration but more of a well-structured fossil fuel campaign. Anti-climate, very dark money. I am not an expert on where the money comes from, but folks have tried to map that out. Now you’re even seeing local communities pass stuff like no energy storage [ordinances].
What’s interesting is that in those communities, we as an industry are not really present providing facts to counter this. That’s very frustrating for folks. We’re seeing these pass and honestly asking, Who was there?
Is the federal permitting freeze impacting investment too?
Definitely.
It’s not like you put money into a project all at once, right? It happens in these chunks. Let’s say there’s 10 steps for investing in a project. A little bit of money at step one, more money at step two, and it gradually gets more until you build the project. The middle area – permitting, getting approval from utilities – is really critical to the investments. So you’re seeing a little bit of a pause in when and how we make investments, because we sometimes don’t know if we’ll make it to, say, step six.
I actually think we’ll see the most impact from this in data center costs.
Can you explain that a bit more for me?
Look at northern Virginia for a second. There wasn’t a lot of new electricity added to that market but you all of the sudden upped demand for electricity by 20 percent. We’re literally seeing today all these utilities putting in rate hikes for consumers because it is literally a supply-demand question. If you can’t build new supply, it's going to be consumers paying for it, and even if you could build a new natural gas plant – at minimum that will happen four-to-six years from now. So over the next four years, we’ll see costs go up.
We’re building projects today that we invested in two years ago. That policy landscape we invested in two years ago hasn’t changed from what we invested into. But the policy landscape then changed dramatically.
If you wipe out half of what was coming in, there’s nothing backfilling that.
Plus more on the week’s biggest renewables fights.
Shelby County, Indiana – A large data center was rejected late Wednesday southeast of Indianapolis, as the takedown of a major Google campus last year continues to reverberate in the area.
Dane County, Wisconsin – Heading northwest, the QTS data center in DeForest we’ve been tracking is broiling into a major conflict, after activists uncovered controversial emails between the village’s president and the company.
White Pine County, Nevada – The Trump administration is finally moving a little bit of renewable energy infrastructure through the permitting process. Or at least, that’s what it looks like.
Mineral County, Nevada – Meanwhile, the BLM actually did approve a solar project on federal lands while we were gone: the Libra energy facility in southwest Nevada.
Hancock County, Ohio – Ohio’s legal system appears friendly for solar development right now, as another utility-scale project’s permits were upheld by the state Supreme Court.