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A cutaway of the MARVEL reactor, showing its size relative to a person. Idaho National Laboratory
For the past four years, the Department of Energy has been developing its very own microreactor. The Microreactor Application Research Validation and Evaluation, or MARVEL, is a 10-kilowatt, liquid-metal cooled microreactor currently under construction at the Idaho National Laboratory. On Thursday, the lab unveiled the “first potential end users for MARVEL,” including Amazon Web Services, energy equipment giant GE Vernova, oil giant ConocoPhillips, and the data center operator DCX. “With access to MARVEL, companies can explore how microreactors will potentially help us win the global AI race, solve water challenges, and so much more,” John Jackson, national technical director for the microreactor program at the Energy Department’s Office of Nuclear Energy, told Power magazine. “The MARVEL testbed exemplifies how nuclear energy can open the door to a stronger, safer and more prosperous future for our country.”
It’s part of the strides the Trump administration has taken on nuclear power recently. Earlier this week, as I wrote here, the Energy Department awarded $400 million each to two small modular reactor projects aiming to build the first lower-powered versions of third-generation units based on the light water reactors already in operation today. Last month, as I covered in this newsletter, the agency put up a $1 billion loan to fund the restart of the working reactor at the Pennsylvania plant once known as Three Mile Island. There is, after all, what Heatmap’s Katie Brigham called a very “real” nuclear dealmaking boom afoot.
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The prestigious journal Nature has retracted a study published last year that concluded that climate change would cause a catastrophic drop in economic output of 62% by the end of the century, a jarring finding taken so seriously that central banks worked the warning into risk-assessment models. But a team of economists noticed an error in data from Uzbekistan. Excluding the Central Asian republic from the calculation pegged the predicted plunge in economic activity at 23%. That doesn’t mean climate change isn’t an economic threat, as the papers detractors noted to The New York Times. “Most people for the last decade have thought that a 20% reduction in 2100 was an insanely large number,” said Solomon Hsiang, a professor of global environmental policy at Stanford University who in August co-wrote the critique of the original study. “So the fact that this paper is coming out saying 60% is off the chart.”
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The advocacy group Rewiring America is out with an interesting new thought experiment on the potential benefits of making the country’s households more energy efficient as a means of clearing space on the grid for data centers. Upgrading U.S. houses, condos, and apartments with efficient appliances, solar panels, and batteries could create enough capacity to meet the rising electricity demand of large data centers over the next five years. Doing so would create more than 600,000 jobs for carpenters, electricians, and others involved in the supply chain. Virtual power plants — software systems that allow utilities to pay homeowners for the right to tap into rooftop solar panels, batteries, plugged-in electric vehicles, and smart thermostats to balance the grid — are, advocates say, emerging as a potential source of large-scale power that can be harnessed in the next few years, a timescale relevant to many data center projects that are expected to complete construction before new power plants can come online.
Back in October, I told you the next-generation geothermal startup Eavor was on the brink of completing its first power plant south of Munich, Germany. Now the Calgary-based company has entered into commercial operation. Eavor officially delivered its first electrons to the German grid from its facility in Geretsried. Eavor hailed the milestone as proof not just of its potential to operate a generating plant but a victory for its in-house drilling technology designed to carve a closed-loop well deep underground. “With Geretsried now on-stream, we’re more confident than ever that our closed-loop geothermal system, designed for adaptability and suited to the world’s diverse regions, will secure its place as the leading solution for commercial geothermal application,” CEO Mark Fitzgerald said in a statement. It’s not the only geothermal startup making waves. As I wrote in yesterday’s newsletter, Zanskar, the Salt Lake City-based company using artificial intelligence to find new conventional geothermal resources, just claimed one of the biggest discoveries in the U.S. in more than 30 years.
You may also recall another newsletter from October where I told you that all Trump’s nominees to serve on the board of the Tennessee Valley Authority vowed to stand against privatizing the federally-owned utility, easing fears that the president’s recent boardroom meddling wasn’t an attempt at selling off the power provider on which more than 10 million Americans depend for cheap electricity. If you agree with analyses showing public ownership as the best way to keep prices down, then I have good news for you. When businessman and Republican megadonor Lee Beaman came before the Senate for a confirmation Wednesday, the nominee for the board said his preference for private enterprise came with an exception for the TVA. “Although I generally believe that the private sector is more efficient than government, in the case of TVA, I think TVA is more uniquely, appropriately operated as a government entity,” Beaman told the Senate Environment and Public Works Committee, per E&E News.
The purpose of the tool, named the Clean Industrial Capabilities Explorer, is to help policymakers “X-ray your country’s existing industrial base to identify what are your genuine strengths,” Tim Sahay, co-director of the lab, told me. The model, he explained, can identify “which core capabilities in your underlying industrial know-how are weak. That is like a diagnosis of what you should get into.”
The model calculates competitiveness across 10 clean energy technologies: solar, wind, batteries, electrolyzers, heat pumps, permanent magnets, nuclear, biofuels, geothermal, and transmission. That analysis ultimately surfaced five “core capabilities” that are most predictive of a country’s relative strength in each technology area: electronics, industrial materials, machinery, chemicals, and metals. Strength in geothermal, for example, is highly correlated with a machinery-focused industrial base, since building a geothermal plant requires expertise in making drilling rigs, heat exchangers, and steam turbines.
This “X-ray” of national capabilities not only confirms the dominance of leading Asian and European manufacturing economies, it also surfaces a group of lesser-known nations that appear well-positioned to become major future producers and exporters of key clean technologies. These so-called “future stars” include a handful of Central European countries — Czechia, Slovenia, Hungary, Slovakia, and Poland — plus the Southeast Asian economies of Malaysia, the Philippines, Thailand, and Vietnam. In Africa, Ethiopia emerges as the most promising economy.
Courtesy of Johns Hopkins Net Zero Industrial Policy Lab
Take Hungary as an example — its core competencies are machinery, electronics, and chemicals, making the country highly competitive when it comes to producing components for batteries, biofuels, and the machinery critical for geothermal power plants. The U.S., by comparison, excels at nuclear, electrolyzers, biofuel, and geothermal.
Many of the European future stars appear to benefit from their proximity to Germany, long an industrial stronghold in the region. “Poland, for example, received a huge amount of German FDI in the late 90s, early 2000s,” Sahay told me, explaining that countries in this region built up strength in their chemicals and metals sectors under the influence of the Soviet Union. Germany then set up these countries as key suppliers for its various industries, from autos to chemicals.
Of the 10 countries identified as rising stars, all of them received Chinese investment sometime in the past 10 years, Sahay said. “What we are seeing is decisions that have been made over the last couple of decades are bearing fruit in the 2020s,” he said, explaining that all of the countries on the list “were identified as places for potential investment by the world’s leading industrial firms in the 2000s or 2010s.”
This has led Bentley Allan, a political science professor and co-director of the policy lab, to think that China is likely doing some modeling of its own to determine where to direct its investments. Whatever the country is working with, it’s arriving at essentially the same conclusions regarding which nations show strong industrial potential, and are thus attractive targets for investment. “China isn’t the only one who can benefit from that strategy, but they’re the only ones being strategic about it at the moment,” Allan told me.
Allan’s hope is that the tool will democratize the knowledge that’s helped China dominate the global clean tech economy. “No one’s produced a global tool that enables not just China to invest strategically, but enables the U.S. to invest strategically, enables the UK to invest strategically in the developing world,” he explained. That’s critical when figuring out how to build an industrial base that can weather geopolitical tensions that might necessitate, say, a shift away from Chinese imports or Russian gas.
While it might not be particularly surprising that a country’s existing industrial capabilities strongly correlate with its potential industrial capabilities, the reality is that in many cases, getting a clear view of a country’s actual core competencies is not so straightforward. That’s because, as Allan told me, economists simply haven’t made widely available tools like this before. “They’ve made other tools for managing the macroeconomic environment, because for 60 years we basically thought that that was the only lever worth pulling,” he said.
Due to that opacity around industrial strength, model was able to yield some findings that the researchers found genuinely surprising. For example, not only did the tool show that countries such as the Philippines and Malaysia have stronger manufacturing bases than Allan would have guessed, it ranked Italy higher than Germany in overall competitiveness, showing solid potential in the nuclear, transmission, heat pump, electrolyzer, and geothermal industries.
That illustrates another complication the model solves for — namely that the countries with the most potential aren’t always the ones pursuing the most robust or intentional green industrial strategies. Both Italy and Japan, for instance, are well-positioned to benefit from a more explicit, structured focus on climate tech manufacturing, Allan told me.
Industrial strength will likely not be achieved through broad economic policies such as tariffs, subsidies, or grant programs, however, according to the model. Say for example that a country wants to deepen its expertise in solar manufacturing. “The things that you might want to invest in are things like precision machinery to produce the cutters that actually are used to cut the polysilicon into wafers,” Allan told me. “It’s more about making targeted investments in your industrial base in order to produce highly competitive niches as a way to then make you more competitive in that final product.”
This approach prevents countries from simply serving as final assemblers of battery packs or solar panels or other green products — a stage that provides low value-add, as countries aren’t able to capture the benefits of domestic research and development, engineering expertise, or intellectual property. Pinpointing strategic niches also helps countries avoid wasting their money in buzzy industries where they’re simply not competitive.
“The industrial policy race is very much hype-driven. It’s very much driven by, oh my god, we need a hydrogen strategy, and, oh my god, we need a lithium strategy,” Sahay told me. “But that’s not necessarily going to be what your country is going to be good at.” By pointing countries towards the industries and links in the supply chain where they actually could excel, Sahay and Allan can demonstrate they stand to benefit from the clean energy transition at large.
Or to put it more broadly, when done correctly, “industrial policy is climate policy, in the sense that when you advance industry generally, you are actually advancing the climate,” Allan told me. “And climate policy is industrial policy, because when you are trying to advance the climate, you advance the industrial base.”
