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The end has been coming for a while. With the EPA’s new power plant emissions rules, though, it’s gotten a lot closer.
There’s no question that coal is on its way out in the U.S. In 2001, coal-fired power plants generated about 50% of U.S. electricity. Last year, they were down to about 15%.
On Thursday, however, the Biden administration arguably delivered a death blow. New carbon emission limits for coal plants establish a clear timeline by which America’s remaining coal generators must either invest in costly carbon capture equipment or close. With many of these plants already struggling to compete with cheaper renewables and natural gas, it’s not likely to be much of a choice. If the rule survives legal challenges, the nation’s coal fleet could be extinct by 2039.
Coal plant retirement presents a two-pronged problem: Utilities have to figure out how to replace lost power generation, and the surrounding community must reckon with the lost tax revenue and jobs from the power plants and the coal mines that supplied them.
From the beginning, Biden has promised to help revitalize the economies of the communities left in coal’s wake. “We’re never going to forget the men and women who dug the coal and built the nation,” he said when he laid out his energy transition plan just a week after entering office. “We’re going to do right by them.”
Economic revitalization doesn’t happen overnight, of course, or even in the span of a four-year term. But money is already rolling out in the form of targeted investments in new energy sources, businesses, and jobs in coal communities, and there’s more to come.
It’s the proactive planning aspect, however, that remains underresourced and scattershot.
Emily Grubert, a civil engineer and sociologist at the University of Notre Dame, told me there are few plants that are expected to make it past 2039 regardless, due to their age and the economics of operating them. The emissions rule’s real potential, then, is to bring about a more orderly — and potentially less painful — exit.
A Heatmap analysis of Energy Information Administration data found that of the nation’s roughly 230 remaining coal plants, 38 are scheduled to fully shut down by 2032. These plants won’t have to make any changes under the new rule. An additional five will shutter by 2039. These will be required to reduce their emissions in the interim, beginning in 2030, by replacing some of the coal they burn with natural gas. That leaves about 190 plants with either partial retirement plans or no plans at all that will be forced to make a decision between carbon capture and shutting down.
Grubert told me that many of these plants have, in fact, communicated informal plans to shut down that are not recorded in the federal data. That aside, she called it “amazing” how many have no retirement plans at all.
For surrounding communities, an impending coal transition can look really different in different places, depending on geography and how diverse the local economy is. Still, the first step should be the same everywhere. “What you need to do, really practically, is figure out what that plant is supporting,” Grubert told me. “What needs to be replaced, for whom, and by when?
It’s a lot more concrete than it seems: It’s some specific number of people, it’s some specific amount of tax revenue. It’s much easier to move forward once you actually know what those are.”
How much of that work has been done so far depends, in part, on the state. Some, like Colorado, New Mexico, and Illinois, have established new positions or entirely new offices dedicated to helping communities transition off fossil fuels. But other states, like Wyoming and Ohio, have advanced measures to keep coal plants open as long as possible.
Successful planning also depends on how clearly a retirement date is articulated and stuck to, Jeffrey Jacquet, an associate professor of rural sociology at Ohio State University who leads a multidisciplinary research project on coal communities there, told me. Some communities have been told one date and then been blindsided when a plant has been forced to shut down years earlier for economic reasons. He noted one success story in Shadyside, Ohio, where the local school board was able to negotiate a deal to slowly step down its tax collections over four years after learning the RE Burger coal plant was going to close. “Had they not weaned us off losing that tax revenue, we would have been in terrible shape,” a school board administrator told a student on Jacquet’s project. “Fiscally we’re pretty good on solid ground now, but at one point it was an extremely bleak time.”
The new power plant rule could help address some of these problems by putting the entire country on the same set timeline, forcing plant operators to put retirement dates in writing. There’s still a risk some will fail early, in unforeseen ways, but at least communities will have been put on notice.
Those who go looking for help will find ample resources. When I started looking into all of the programs that exist to bring investment into coal communities, or otherwise help them diversify their economies, I was surprised at how much investment in coal communities had already been set in motion:
This list is far from comprehensive. In fact, there are so many programs, it’s kind of a problem.
“So much of it comes down to the local capacity to take advantage of these opportunities,” Jacquet told me. “A lot of these communities are losing population, they’re facing out-migration. Community leaders are already overworked and overstressed.” (Possible case in point: I reached out to several local groups doing coal transition work in West Virginia and Kentucky for this story, and wasn’t able to get anyone on the phone.)
This isn’t a new problem, per se. The federal government had dozens of programs and pots of money set aside for rural economic development before the Biden administration came into the White House, but they were scattered across different agencies and departments within those agencies, making it difficult for any overworked, overstressed town manager to know where to start.
Jeremy Richardson, a manager of the carbon-free electricity program at the think tank RMI, told me he was involved in a group that pitched policies to the incoming president that would help ease the process. “It shouldn’t be on the community to navigate the entire federal bureaucracy to figure out what they qualify for,” he said.
Biden took the note. In his first climate executive order, he established the Interagency Working Group on Coal and Power Plant Communities and Economic Revitalization, which is building tools to help companies and local governments identify funding opportunities. Its “getting started guide,” which Richardson called a “fantastic piece of work,” walks communities and workers through 10 concrete steps, from identifying needs to developing a transition strategy to finding funding and implementing a project, with curated resources for each step. The group also established four “rapid response” teams to provide more targeted assistance to communities in areas with the highest loss of coal assets.
Jacquet summed up the group’s work as “hand holding,” stressing that it still required people at the local level that were willing and able to take advantage of these services. “I think we’re sort of seeing this phenomenon where the communities that are already best positioned to take advantage of these are going to be the ones that take advantage of it,” he said.
There are other limitations to the broader suite of federal assistance programs. For instance, even if a community is able to attract a big manufacturing project, there may be a several-years gap between the coal plant closing and the new job opportunities and local tax revenue manifesting.
That’s why the coordination efforts in states like Colorado, which was the first to establish an Office of Just Transition in 2019, are so promising. The office has a small staff of six, and a meager budget of $15 million, but is making progress by focusing on highly targeted assistance. In the town of Craig, two nearby coal-fired power plants are scheduled to retire over the next four years and four coal mines will shutter by 2030, taking with them 900 jobs and about 45% of the county’s tax revenue. A new “transition navigator” hired in January will help match the town’s needs with federal and state funding opportunities and serve as a central point of contact for coal workers and their families seeking connection to services.
“I think it’s been really helpful,” said Richardson. “They’ve had long conversations — several years of conversations — with those communities in northwest Colorado that are facing closures soon.” The office was controversial at first. Republicans called it “Orwellian” and unanimously opposed it. But in the years since, some of its staunchest critics have become its biggest champions. “To me that says that they’re doing some good work and they’re making some inroads.”
There’s progress on the energy side, too. RMI is pushing a model called “clean repowering,” enabled by a suite of IRA incentives that offer tax credits and loan guarantees for clean energy projects in fossil fuel communities. The idea is that renewable energy projects can get around the yearslong bottleneck of connecting to the grid by building in close proximity to existing fossil fuel plants. A lot of these plants have “spare” interconnection rights that a solar or wind farm could use to connect a lot sooner.
RMI found 250 gigawatts of spare rights available — which is more than the capacity of the entire existing coal fleet. “If you can build a renewable facility alongside where that fossil plant is, maybe you use the fossil plant a little less because it’s cheaper to generate from the renewables, but you know, you don’t have to close it immediately,” said Richardson.
As Daniel Raimi, a fellow at Resources for the Future, told me, even though the coal transition has been in motion for decades, it’s still early. There hasn’t been enough research. Much of the funding and programs are new. No one really knows yet what’s working, or what could work better.
The only thing that’s clear, he said, is that if these communities are going to develop alternative economic futures, they really need to begin that process now.
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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 Institute, 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 Institute 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.
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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%.
Jesse teaches Rob the basics of energy, power, and what it all has to do with the grid.
What is the difference between energy and power? How does the power grid work? And what’s the difference between a megawatt and a megawatt-hour?
On this week’s episode, we answer those questions and many, many more. This is the start of a new series: Shift Key Summer School. It’s a series of introductory “lecture conversations” meant to cover the basics of energy and the power grid for listeners of every experience level and background. In less than an hour, we try to get you up to speed on how to think about energy, power, horsepower, volts, amps, and what uses (approximately) 1 watt-hour, 1 kilowatt-hour, 1 megawatt-hour, and 1 gigawatt-hour.
Shift Key is hosted by Jesse Jenkins, a professor of energy systems engineering at Princeton University, and Robinson Meyer, Heatmap’s executive editor.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, YouTube, or wherever you get your podcasts.
You can also add the show’s RSS feed to your podcast app to follow us directly.
Here is an excerpt from our conversation:
Jesse Jenkins: Let’s start with the joule. The joule is the SI unit for both work and energy. And the basic definition of energy is the ability to do work — not work in a job, but like work in the physics sense, meaning we are moving or displacing an object around. So a joule is defined as 1 newton-meter, among other things. It has an electrical equivalent, too. A newton is a unit of force, and force is accelerating a mass, from basic physics, over some distance in this case. So 1 meter of distance.
So we can break that down further, right? And we can describe the newton as 1 kilogram accelerated at 1 meter per second, squared. And then the work part is over a distance of one meter. So that kind of gives us a sense of something you feel. A kilogram, right, that’s 2.2 pounds. I don’t know, it’s like … I’m trying to think of something in my life that weighs a kilogram. Rob, can you think of something? A couple pounds of food, I guess. A liter of water weighs a kilogram by definition, as well. So if you’ve got like a liter bottle of soda, there’s your kilogram.
Then I want to move it over a meter. So I have a distance I’m displacing it. And then the question is, how fast do I want to do that? How quickly do I want to accelerate that movement? And that’s the acceleration part. And so from there, you kind of get a physical sense of this. If something requires more energy, if I’m moving more mass around, or if I’m moving that mass over a longer distance — 1 meter versus 100 meters versus a kilometer, right? — or if I want to accelerate that mass faster over that distance, so zero to 60 in three seconds versus zero to 60 in 10 seconds in your car, that’s going to take more energy.
Robinson Meyer: I am looking up what weighs … Oh, here we go: A 13-inch MacBook Air weighs about, a little more than a kilogram.
Jenkins: So your laptop. If you want to throw your laptop over a meter, accelerating at a pace of 1 meter per second, squared …
Meyer: That’s about a joule.
Jenkins: … that’s about a joule.
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Music for Shift Key is by Adam Kromelow.