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Fossil fuel plant retirements are slowing down, and projected load growth is to blame.
To fully decarbonize the electricity system will require more than just the rapid deployment of non-carbon-emitting generation capacity, plus the transmission necessary to get that electricity to where it needs to go. It will also require that our existing stock of electricity generation — which is largely natural gas- and coal-powered — get mostly mothballed. So far, this process has been proceeding briskly. Renewable deployment is on the way up and is projected to accelerate, and older electricity generation was sliding quickly but gracefully into retirement — until recently.
Retirements of existing generation have slowed down dramatically in the first half of this year, which is on pace to be the slowest for existing generation retirements since 2011, according to new data from the Energy Information Administration.
In the first half of the year, some 5.1 gigawatts of generating capacity have been retired, and another 2.4 gigawatts are scheduled to be retired by year’s end, for a projected total of 7.5 retired gigawatts. From 2004 to 2023, by contrast, just over 12 gigawatts of capacity were retired each year on average, with almost 15 gigawatts retired per year this decade. Since 2022, according to EIA data, over 90% of retired capacity has been coal or natural gas.
What’s behind the slowdown? “Reliability is threatened because the grid conditions are tightening,” Douglas Giuffre, executive director of gas, power and renewables analysis at S&P Global Commodity Insights, explained in an email. “This is partly due to the recent pace of coal and natural gas retirements in the U.S., which worked off some of the excess capacity in power markets. Now we are seeing tighter reserve margins, and a relatively thin pipeline of new gas-fired projects that can come online quickly.” That’s especially concerning for utilities at a time when projected electricity demand is way, way up.
The wave of retirements was a national phenomenon, often having nothing to do with state-level plans to decarbonize. Coal and gas were being retired so steadily over the past 20 years not just because plants were aging, but also because power use was essentially flat from the early 2000s through, essentially, yesterday. This meant that older plants — especially dirty coal plants — became uneconomic to run, especially as natural gas prices began to fall.
Now, we are in a completely different world. Electricity use is forecast to start growing again, thanks to a buildout of new data centers and manufacturing, plus the ongoing electrification of automobiles and home heating and cooling.
The Southeast offers an example of how these trends have played out on the ground. In December 2020, the Mississippi Public Service Commission determined that the state had “excess reserves … largely due to decreases in projected load” and ordered a 950 megawatt reduction in generating capacity by Mississippi Power by 2027. A consulting firm hired by the commission determined that Plant Daniel, a coal plant, was “relatively inefficient compared to other available resources;” a few months later, the utility said it would decommission Plant Daniel by 2027.
Then Georgia Power, the utility that covers most of the state (and, like Mississippi Power, a subsidiary of Southern Company), rushed out a new three-year plan for its future power usage less than a year after finalizing its old one. Its demand forecast through the end of the decade had jumped from 400 megawatts to 6,600 megawatts, the result of a projected boom in data center construction.
“They came in with a preselected list of ways it wanted to meet that power need,” including buying power from Plant Daniel and new gas, Bob Sherrier, a staff attorney at the Southern Environmental Law Center, told me. Georgia Power told the state’s utility commission that to respond to growing demand it would need to extend contracts with its sister utility in Mississippi — which meant not only that Daniel would remain open for at least another year — and build new new plants that could run on gas or diesel, plans for which regulators approved on Tuesday. The utility also hinted that its existing plans to euthanize, for the most part, its coal-fired generation fleet by the end of 2028 were likely to be revised.
“To meet that projected need, the utilities are reverting to what they know, which is fossil fuels,” Sherrier said.
In vertically integrated markets, where utilities own generating assets and sell power to customers, environmentalists have seen delayed retirements and the building of new fossil plants as examples of utilities slipping into their comfort zone, building and operating expensive projects instead of developing or procuring renewables to handle rising demand.
But it's not just in vertically integrated markets where fossil retirements are being delayed. In Maryland, for instance, Brandon Shores, a coal-fired power plant that was scheduled to close in 2025, is staying open because PJM Interconnection, the regional electricity market, determined that a plan to replace it with battery storage was not a “realistic option at present” nor “technically viable to resolve the reliability violations or avoid the need for an RMR agreement at this time,” PJM president Manu Asthana said in a letter to Paul Pinsky, the director of the Maryland Energy Administration. The transmission investments required to make up the difference, meanwhile, would take several years.
Along with the neighboring Wagner plant, which burns a mix of coal, oil, and natural gas, Brandon Shores will likely stay open more than three years past its planned retirement date thanks to what’s known as a “reliability must run” contract, which “would put Maryland ratepayers on the hook for over $600 million dollars in out-of-market payments,” according to a letter written by several Maryland congressional representatives to PJM.
Environmental advocates have blamed PJM for not doing enough proactive transmission planning to account for predictable and scheduled plant retirements.
The slowing retirements mean that emissions from the electricity sector, which have been falling since the mid-2000s (with occasional bumps up as the economy has recovered from downturns), are expected to plateau over the next year or so. EIA forecasts show carbon dioxide emissions from electricity as essentially flat from 2023 to 2025, with increased natural gas emissions essentially offsetting falling coal emissions.
There is a bright side to the data, however. So far this year, the U.S. has installed just over 20 gigawatts of new generation, 80% of which has been solar and battery storage, including a 600-plus megawatt projects in Nevada and Texas. If added generation comes on in the second half of this year as planned, the EIA projects we’ll have 15 gigawatts of battery storage by year’s end. Along with the large and growing solar generation in states like California, Nevada, and Texas, the U.S. is getting closer to a grid that can, at least, run without carbon emissions day or night.
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Trump just quasi-nationalized U.S. Steel. That could help climate policy later.
The government is getting into the steel business. The deal between Japan’s Nippon Steel and U.S. Steel, long held off by the Biden administration due to national security and economic concerns, may finally happen, and the government will have a seat at the table. And some progressives are smarting over the fact that a Republican did it first.
On Friday, Nippon Steel and U.S. Steel announced “that President Trump has approved the Companies’ historic partnership,” which would include $11 billion in new investments and “a Golden Share to be issued to the U.S. Government” as well as “commitments” that include “domestic production” and “trade matters.”
The New York Times reported that this “Golden Share” would give the president, including Trump’s successors, the ability to appoint or veto some of the company’s directors, and require the government to sign off on a wide range of corporate decisions, like moving production overseas or idling or closing plants or the procurement of raw materials.
The Trump administration will likely use its oversight to encourage domestic production of steel, in tandem with its tariffs on steel imports. The unique arrangement “will massively expand access to domestically produced steel,” Secretary of Commerce Howard Lutnick wrote on X.
While neither the administration nor the two companies involved in the deal have mentioned decarbonizing steel — and in fact existing steel decarbonization programs have floundered in the first months of the Trump’s second term — it is this government oversight of steel production that could, with a different administration, help steer the steel industry into greener pastures.
A future president could wield a golden share to encourage or require the significant capital investments necessary to decarbonize some of U.S. Steel’s production, investments that the Biden administration had trouble catalyzing even with direct government financial support.
And considering that steel makes up for some 7% of global emissions, decarbonization is a necessary — if costly — step to substantially reducing global emissions.
“It’s honestly embarrassing that Republicans beat us to actually implementing a golden share or something like it,” Alex Jacquez, who worked on industrial policy for the National Economic Council in the Biden White House, told me.
When the steel giant Cleveland Cliffs first hinted that it would not go forward with $500 million worth of federal grants to help build a hydrogen-powered mill, it cited “fears that there won’t be buyers for the lower-carbon product,” thanks to a 40% price gap with traditional steel, Ilmi Granoff wrote for Heatmap., This tracked what steel producers and buyers were telling the Biden administration as it tried to convene the industry to see what it needed to go green.
“The largest issue by far in advancing green steel production in the U.S. is demand. It’s still not price competitive and not worth capital investment upgrades, given where the market is right now and without stable demand from customers who are going to pay a premium for the product,” Jacquez said. “There’s no case to make to shareholders for why you’re investing.”
When the Roosevelt Institute looked at barriers to transition to clean steel, specifically a Cleveland-Cliffs project, among familiar community concerns like what it would mean for steel employment, there was “corporate inertia and focus on short-term shareholder value over long-term public value and competitiveness.”
While the Trump administration sees shareholder demands leading to insufficient domestic production of any steel, a future administration could be a counterweight to investors not wanting to make green steel investments.
Shareholder reticence is a “huge obstacle,” one of the report’s authors Isabel Estevez, co-executive director of the industrial policy think tank I3T, told me.
“Of course investors are not going to green light investments that don’t produce the same returns as doing nothing or doing something else would do,” Jacquez said.
And when green steel projects have gotten canceled, in the U.S. and abroad, it’s been dismal shareholder returns that are often the explicit or implicit justification, as well as the high cost of producing green hydrogen necessary to fuel green steel operations. “We are not only pushing the boundaries of what is technologically feasible with this project. We are also currently pushing the boundaries of economic viability. Or, as it stands today: beyond it,” the chief executive of ThyssenKrupp told the North Rhine-Westphalia parliament, according to Hydrogen Insight.
And the resulting Trump administration retrenchment from the Biden administration’s climate policy has made the environment even less friendly for green steel.
Earlier this month Cleveland-Cliffs scrapped the hydrogen-fuel steel project and said instead it would try to extend its existing coal-fueled blast furnace. And the Swedish company SSAB earlier this year withdrew from a prospective project in Mississippi.
Would these outcomes be any different with a “golden share”? When the Roosevelt Institute looked at steel decarbonization even full-on nationalization was considered as one of the “sticks” that could push along decarbonization (many steel companies globally are either state-owned or have some state investment). The golden share, at least as reported, will seem to put the government in the driver’s seat of a major player of the steel industry, while still maintaining its private ownership structure.
“Assuming the nature of the golden share allows the public sector to make certain requirements about the way that profits are used, it could be very valuable for encouraging U.S. Steel to use their profits to make important investments,” Estevez told me.
On Israel and Iran, G7, and clean-energy jobs
Current conditions: Fairbanks will “cool” to 85 degrees Fahrenheit on Monday after NOAA issued the first heat advisory in Alaska’s history over the weekend • Nashville’s total rainfall for the year is 33.25 inches, making it the city’s wettest since 1979 • It could hit 124 degrees Fahrenheit in Ar Rabiyah, Kuwait, today, potentially setting a new hottest temperature of June so far.
An Israeli strike on the Shahran oil depot in Tehran.Stringer/Getty Images
Oil analysts and investors are bracing for further escalation after Israel and Iran’s attacks on each other’s energy infrastructure this weekend. On Saturday, Iran reported that Israel had struck its natural gas processing facility near the South Pars field, as well the main fuel depot in Tehran — targets that “suggest Israel is attempting to weaken and disrupt Iran’s domestic gas and fuel supply chains to cause shortages, rather than pursuing the country’s oil and gas production or exports, which would rock the markets,” the Financial Times writes. Iran responded on Saturday by hitting an Israeli refinery and damaging pipelines north of Tel Aviv. Israel preemptively cut off the natural-gas flow from its oil fields in case those pipelines become additional targets, with Egypt and Jordan reporting they’ve already seen disruptions to their supplies as a result, The Wall Street Journal reports.
Iran has the second-largest natural gas reserves and the fourth-largest crude oil reserves in the world, and is the third-largest producer in the Organization of the Petroleum Exporting Countries. The country has also threatened to close the Strait of Hormuz, a major transit route for a third of the world’s oil, although many analysts are skeptical of such a threat, given that it would also cut off Iran’s own export route to its biggest customer, China, Bloomberg reports. While some analysts expect President Trump to call on OPEC+ to increase its production capacity if the global oil supply is disrupted, “it’s unclear whether the Organization of the Petroleum Exporting Countries could offset a severe and prolonged outage in Iran, which pumps around 3.4 million barrels a day,” Bloomberg adds. Brent crude rose 5.5% to $78.32 a barrel at the start of trading on Monday morning, after gaining 7% on Friday — the most in three years.
The Group of Seven summit begins today in western Alberta, but in a break with precedent, climate policy will not be on the agenda. Canada, France, Italy, Japan, Germany, and Britain will reportedly take pains to avoid “riling” President Trump at the meeting in Kananaskis, The Washington Post reports, while Bloomberg notes that “other G7 leaders won’t even try for a statement of unity on matters such as Ukraine or climate change.” Since 1975, the group has “dedicated an average of 5% of its declarations to climate change at each summit,” The Global Governance Project reports, and it has made “496 climate commitments, taking 6% of the total on all subjects.” But despite the hesitancy to contradict the U.S., certain climate policies will be “integrated into the agenda, a senior government official told a briefing this week, pointing to an effort to improve the international joint response to the growing global forest fire threat,” per the BBC.
The Republican budget bill could potentially threaten 2 million jobs, a new report by BlueGreen Alliance found. In addition to 300,000 direct manufacturing jobs that may be lost if the GOP follows through on eliminating the corresponding tax credits, the report also found that a million indirect jobs (like “supply chain jobs, providing parts for auto or clean energy manufacturing”) and 643,000 induced jobs (like “restaurant workers, store clerks, and the other types of jobs you’d see when an area increases in population or has more money to spend”) are also at risk of evaporating, Electrek notes. Georgia alone could lose 258,000 jobs. “Every bit of data shows clearly that repealing these credits will hurt working Americans,” Ted Fertik, the vice president of manufacturing and industrial policy at BlueGreen Alliance, said in a statement. “We hope the Senate will see reason and reverse these damaging provisions.”
The European Commission, which is set to propose a cut-off date for the European Union’s imports of Russian gas, will not propose similar limits on the nation’s nuclear fuel, Reuters reported Monday. Russia currently supplies the bloc with 38% of its enriched uranium and 23% of its raw uranium, and five EU countries use Russian-designed reactors intended to run on Russian fuel. “The question about nuclear is, of course, complicated, because we need to be very sure that we are not putting countries in a situation where they do not have the security of supply,” EU energy commissioner Dan Jorgensen said. Though the announcement was a reversal from the Commission’s statement in June that it would target Russian enriched uranium, Jorgensen added that “we’re working as fast as we can to also make that a part of the proposal.”
In case you missed it, late last week Meta announced a deal with XGS Energy to add 150 megawatts of geothermal electricity in New Mexico to help the company power its local expansion into artificial intelligence. XGS specifically uses a closed-loop system to prevent water from escaping as it extracts geothermal energy from the rock, which is “especially crucial in a drought-prone state like New Mexico,” The Verge writes. The goal is for the facility to be operational by 2030.
Though the deal between Meta and XGS is no larger than a separate geothermal deal the tech company struck with Sage Geosystems last year, the proposal would still “represent about 4% of total U.S. geothermal production,” Reuters reports. Meta also announced a nuclear agreement with Constellation Energy earlier this month. My colleague Matthew Zeitlin has more on the tech clean-power buying spree, which you can read about here.
The world’s biggest sand battery is now operating in the small municipality of Pornainen, Finland. The nearly 50-foot wide, 43-foot-tall tank is filled with sand that is capable of storing 1 megawatt of thermal power from excess solar and wind electricity, and which can be used to meet one month of Pornainen’s heat demands in the summer or a week of its demands in the winter, per its owner, Polar Night Energy.
How the perpetually almost-there technology could get shut out of the Inflation Reduction Act’s surviving nuclear tax credits.
The House offered a last minute olive branch to the increasingly bipartisan nuclear industry when it passed its version of the budget reconciliation bill now working its way through the Senate, opting to preserve tax credit eligibility for so-called “advanced nuclear facilities” that start construction by 2029. That deadline will be difficult for many nuclear companies to meet, regardless of their technological approach or reactor size. But one much anticipated, potentially world-changing technology won’t even have a shot: nuclear fusion.
That’s not because fusion is so futuristic that the 2029 deadline would be categorically unworkable. As I keep hearing, the tech is finally, possibly, actually on the verge of commercialization, and some industry leaders such as Commonwealth Fusion Systems could probably break ground on a commercial reactor by then.
Fusion won’t have a shot simply because, as defined by Congress and the IRS, it does not fall within the category of an “advanced nuclear facility.” Instead, it’s defined and regulated as a separate class of zero-emission technology, thus excluding it from the nuclear carve out in the budget bill. That distinction was made clear in January, when the IRS released its final regulations for the Inflation Reduction Act, Julien Barber, an investor in multiple fusion technologies at Emerson Collective, told me. That separation happened because “we wanted to regulate them differently,” he said.
Fusion reactors can’t melt down and don’t produce the kind of highly radioactive nuclear waste that fission does, meaning that many of the safety constraints on conventional nuclear don’t apply to fusion. In 2023, the Nuclear Regulatory Commission decided to regulate fusion reactors more like particle accelerators, which are typically licensed at the state level, have fewer siting constraints, less stringent security requirements, and are often exempt from full environmental review. Last year, a bipartisan group of senators worked together to pass the Fusion Energy Act, which confirmed the NRC’s decision to separate the regulatory processes.
If the Senate approves the House’s version of the clean energy investment and production tax credits, fusion energy will be subject to the same tight restrictions as other clean energy solutions. The timeline for credit eligibility requires energy projects to begin construction a mere 60 days after the bill’s passage, and be placed in service by 2029. That, Barber said, is “essentially impossible for any of the fusion companies out there.” Brian Berzin, CEO of the fusion startup Thea Energy, agreed. “Most private fusion companies will be left unable to benefit from these financial incentives,” he wrote in an emailed statement.
There’s confusion, however, around whether this fusion exclusion was a deliberate decision from the House or simply an oversight. Barber is betting on the latter.
“This was happening quickly,” Barber told me. “There was some push by some of the companies in the [Fusion Industry Association] to review the language, but they just didn’t have time to review the language in time to write comments, and it just kind of got pushed through as is.”
The bill’s final language also took the CEO of the Fusion Industry Association, Andrew Holland, by surprise. “We had heard that fusion would be part of the carve out too, but then it wasn’t,” Holland told me.
A more pessimistic interpretation is also possible, Barber conceded. “There’s the idea that people don’t think fusion is ever going to be the case,” he told me. Certainly for some both in and out of government, fusion represents a dream perpetually deferred.
What Barber thinks many people fail to realize, though, is that some fusion industry leaders are operating on timelines similar to fission companies building small modular reactors. “If you talk to CFS, they’re going to say, We’re going to be putting our first power plant on the grid by the early 2030s, which is the same timeline as [small modular reactor company] X-energy, right?”
Until this moment, the distinction that top governing bodies such as the Nuclear Regulatory Commission have made between fusion and fission has been nothing but a positive for fusion companies and advocates alike. When the Fusion Energy Act passed, one of the bill’s co-sponsors, Republican John Cornyn of Texas, said that “fusion energy is a promising clean and safe power source that could help address America’s growing energy demands.” Another co-sponser, Republican Todd Young of Indiana, said that fusion “has the potential to usher in a new era of energy production in America.”
But whether generalized Republican support for fusion will extend beyond easing regulations to actively include subsidies for the technology remains to be seen. And for now, most of the companies themselves are staying quiet. As of publication time, CFS, Zap Energy, Type One Energy, and Xcimer Energy all either said they could not comment or else did not respond to my request for comment.
Editor’s note: This story has been updated to include comments from the Fusion Industry Association.