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When I was an analyst at the U.S. Treasury, my team’s work centered around promising private investors that we would make it easier for them to invest in renewable energy projects across the Global South. I kept hearing that our job was ultimately to make these projects “bankable.” As the logic went, “there is a sizeable universe of good projects that fall just below many private investors’ desired rate of return,” and therefore lowering the risks of investing in these “good projects” would put them within reach of private investors’ return expectations. To make decarbonization possible, we had to make decarbonization profitable.
This claim cuts straight through Brett Christophers’ latest book, The Price is Wrong: Why Capitalism Won’t Save the Planet, which argues that the cost of developing and generating renewable energy is not what will determine the speed or scale of its uptake. It might finally be cheaper to build solar panels and wind farms than a coal or gas plant, that’s for sure. But given the structure of our energy markets today, it does not follow that assets that are cheap to build are necessarily profitable enough to provide adequate returns to investors.
My old colleagues might have already been aware of this fact, but as Christophers highlights, it’s certainly not intuitive, even to many analysts. Nor are its implications: Decarbonization won’t happen if it’s not profitable enough ― and it’s not profitable enough.
Christophers is a professor at Sweden’s Uppsala University in its “department of human geography,” whose research focuses on how capitalism and the modern financial system shape our lives; in this book, that also includes our energy systems. To make his case, he highlights the vicious feedback loop affecting renewables endemic to today’s energy markets. Government support to build renewable energy drives down its marginal cost, but because there’s now more renewable energy available at any given moment, the falling costs cut into developers’ expected returns, requiring more government support to keep investors and developers interested in the sector.
Combine this dynamic with technical features endemic to renewable energy generation, including its intermittency, and the result is a wholesale electricity market with perennially unstable prices. This volatility throttles the expected returns on any investment in renewable energy. No matter how cheap it is to build renewable energy, private investors and developers won’t decarbonize our globe at the speed or scale we deserve ― not under these financial conditions, at least.
Christophers leans on two theoretical guideposts here. First, Andreas Malm, whose assessment of how the profit motive, not relative costs, drove Britain’s first energy transition from water-wheels to coal and steam is an unmistakable conceptual parallel to today’s transition. Second, Karl Polanyi, whose theory of “fictitious commodities” — referring to land, labor, and money, each of which the state and society must painstakingly regulate into fungible market-friendly products ― Christophers aptly applies to electricity and the artificial markets created around it.
But rather than hew to theory to justify why the energy system needs to be socialized to achieve decarbonization ― which is definitely true, by the way; the profit motive is supremely unhelpful here ― Christophers embraces a holistic understanding of the economy as a set of financial relationships, supply chains, planned markets, and legal institutions connecting various public and private entities with different motives.
That means interviewing investors, who tell him things like: “Low returns and volatility don’t go. No bank in the world will take power price risk at low returns.” Christophers also produces a detailed and data-rich breakdown of the interlocking global energy crises in 2021 and 2022, jumping between Texas, China, India, Australia, and across Europe, to make a larger point about energy markets. These crises were “not taken to be evidence of the failings of markets, or even a reason to question their role as the pre-eminent mechanism of coordination to the state’s electricity sector,” he writes; “the market was regarded as the very means to manage the crisis.” But the markets aren’t working. Something has to give.
He ends the book with a call for socialized power, inspired by the Green New Deal and New York’s Build Public Renewables Act, championed by the state’s democratic socialists on the explicit grounds that, because delivering on the state’s emissions targets is not profitable enough for the private sector to do alone, the public sector must get the job done. With the force of the whole book’s arguments and evidence behind it, this policy prescription hardly appears radical.
Public developers can accept lower profitability thresholds, and public finance institutions can provide debt on more forgiving terms; under the public aegis, rates of return and costs of capital become policy choices. Christophers admits in his introduction that he is more focused on unearthing the fragile relationships among actors across the renewable energy industry than on describing the ways a New York-inspired socialized power sector could function. Given how much there is to unearth, it’s a reasonable choice, but it leaves readers without a working heuristic for the different ways states can intervene in the business of energy.
Here’s my attempt: Energy must be financed, generated, distributed, and consumed. Government intervention in favor of decarbonization looks distinct at each step.
Governments can provide consumption support by shielding ratepayers from the higher electricity bills that come from potential utility investments into renewable energy procurement and decarbonization-related grid management, backstopping utility investments through a demand guarantee. Consumption support is equitable, but it’s also indirect and incomplete — it might provide a utility with more financial breathing room to procure or develop renewables, but if renewables are not available to procure on the grid or are not easy to develop, this demand guarantee likely just pads the utility’s bottom line.
Governments can provide distribution support by encouraging utilities to purchase renewable energy. Distribution support most often takes the form of regulatory nudges: In the United States, mandates like Renewable Portfolio Standards force utilities to increase their clean energy procurement, guaranteeing purchase demand for clean electricity and Renewable Energy Certificates, which companies might buy to clean up their own energy portfolios.
These demand-guarantee interventions have helped speed up renewable energy development nationwide, but with limits. In particular, utility power purchase agreements don’t provide developers with adequate price stability because utilities fix the quantity of energy they purchase rather than the price; corporate PPAs, meanwhile, cannot be relied on at scale because there aren’t enough large creditworthy corporations like Google and Amazon willing to commit to buying energy from new projects at a fixed price. For these reasons and more, supporting utilities’ efforts to decarbonize will not call forth adequate renewable energy generation sources into existence.
Generation support is what most governments already do. Whether through feed-in tariffs, production tax credits, or contracts for difference, generation support entails propping up generators’ profitability, ensuring that the sale price of their energy is never too low. Christophers explains why this mechanism — that is, a revenue guarantee rather than a demand guarantee — is deeply necessary: Renewable energy sources and the energy markets they’re plugged into are both structurally volatile, so, no matter how much energy they generate, they never generate all that much profit. Withdrawing generation support would be, in no uncertain terms, a death knell for renewables development.
And, finally, financing support targets renewable energy sources as capital-intensive assets requiring huge amounts of upfront debt. Whether through the investment tax credit, viability gap funding, concessional financing, or other forms of cost-share plans, financing support is another form of direct price support for generation companies; by lowering a project’s cost of capital, it helps lower its developer’s threshold for project profitability, meaning that generators pay less debt service and keep more of their revenues. High interest rates have lately forced up the cost of debt for renewable energy projects to unsustainable levels, far above private developers’ prospective rates of return. Financing support is a must-have these days ― and it’s all the more necessary across the Global South, where the costs of capital are far higher.
None of this is to say that socializing generation and finance solves every problem ― as far as the United States is concerned, non-financial barriers abound, such as regulations and interconnection queues ― but within the existing structure of energy markets, public ownership does solve a lot.
What does direct government intervention into energy consumption and distribution look like? Public ownership of local distribution utilities is a start. Unlike private utility companies, they don’t need to promise ten percent returns to shareholders, and can use the financial breathing room that comes from lower profitability thresholds to tamp down rate hikes and, perhaps more importantly, rate volatility. Public utilities will not drive decarbonization, but they could potentially help advance transmission reform and better integrate distributed energy resources into the grid.
Christophers all but argues that the best thing governments can do for all four support categories is to redesign energy markets. Beyond simply incentivizing the deployment of clean firm and battery technologies to complement renewables, policymakers’ biggest task is to build an energy system where volatile wholesale energy prices ― which even publicly owned renewable energy developers will have to face for the foreseeable future ― are not the reason that a project fails to get built. That would be a policy failure, and we don’t have time for those.
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From the notebooks of Heatmap’s reporters and editors.
The three letter acronym I heard the most during New York Climate Week wasn’t EPA, COP, NDC, or GHG. It was PJM. The country’s largest electricity market — the PJM Interconnection, which reaches into 13 states, including Pennsylvania, Ohio, Virginia, and Michigan — has become the poster child for data center growth, clogged interconnection queues, and political backlash to rising electricity prices. Nearly every conversation I have about PJM includes a preamble about how nerdy and impenetrable the whole field of wholesale electricity markets is. Even so, it’s quickly becoming a central preoccupation of the political system, especially in states like New Jersey, where electricity prices have become a central issue in the gubernatorial campaign. — Matthew Zeitlin
As expected, this climate week featured lots of chatter about artificial intelligence — both the pros and the cons. On Tuesday, I attended an actual debate on the topic hosted by Deloitte, titled “AI for Sustainability: Friend of Foe,” which asked four participants to argue for or against a strongly worded motion: “AI is humanity’s best hope for tackling climate change.” To be frank, I disagreed with the premise before either side launched into their arguments, as did many others in attendance. When the audience was polled ahead of time, 49% disagreed, 36% were undecided, and 15% agreed.
The AI advocates — Riaz Raihan of Trane Technologies and Jen Huffstetler, HP’s chief sustainability officer — did share a few striking figures. Raihan, for instance, noted that Trane’s AI platform can make HVAC systems up to 25% more efficient. If that tech were deployed worldwide, it would save significantly more power than all the world’s data centers currently consume. But it was ultimately David Wallace-Wells of the New York Times who expressed the sentiment that I found most compelling when he cited the very human problems that keep renewable energy projects stuck in interminably long interconnection queues for years.
“What is it that’s stopping that renewable power from getting online. Is it a lack of intelligence? Is it too limited, too scarce intelligence? Or is it the human challenges, the concrete, real-world challenges? How do we deal with politics? How do we deal with land use? How do we prioritize what we’re doing in this world?” Ultimately, the audience appeared persuaded by his arguments, too — as well as those of his co-debater, Sarah Myers of the AI Now Institute. When the debate was over, 78% of the audience disagreed with the motion, 16% agreed, and 6% remained undecided. — Katie Brigham
At this point, I think we’re used to the idea that the artificial intelligence boom is creating more demand for electricity — and that this higher demand is helping renewable developers during what would otherwise be a tough moment. One theme that stuck out to me at New York Climate Week, though, is how much the surge in Big Tech investment is harmonizing what used to be otherwise regional markets.
Because a relatively small number of companies are driving such a large share of electricity capex, utilities across the country — who would normally do business with residential developers or small-to-medium-sized industrials — are now working with the same few tech firms. Those firms have the same sorts of demands everywhere. And because those tech firms are so flush with cash (and so far from achieving their climate goals), they are becoming important buyers for early-stage climate tech products. In that way, the AI boom — whose first-order labor effects have been quite concentrated in the San Fransisco area — is already transforming the U.S. economy. — Robinson Meyer
Here at Heatmap, we promise to bring you the “inside story of the race to fix the planet.” I’m biased, of course, but I think we tend to deliver, and my colleague Emily Pontecorvo certainly did this week with her story on the obscure accounting debate that has the potential to reshape our emissions future for years to come. We’re talking specifically about the Greenhouse Gas Protocol, the primary standard-setting body for corporate carbon accounting, which is in the process of revising its guidelines for how companies should report the emissions from the electricity they consumer, otherwise known as scope 2 emissions.
While it hasn’t cracked the headlines in many places, Amazon Director Sustainability Policy told the crowd at our Heatmap House event on Wednesday that it was on everyone’s minds all week — and indeed, it came up over and over again during our “Up Next in Tech” session. I’ll spare you the details of the debate (though you should definitely read Emily’s story), but suffice it to say that it comes down to some pretty profound questions about why we count emissions in the first place. Is it to help consumers make informed choices? Or is it to help decarbonize the global economy? — Jillian Goodman
The administration argued in the name of national defense — but Orsted had receipts.
When the Trump administration ordered work on Orsted’s Revolution Wind offshore wind project to shut down in late August, it cited national security concerns as the reason for the delay.
Within weeks, a federal judge had lifted the stop work order, allowing construction to proceed.
What happened in between matters. In its rush to stop a wind project, the Trump administration exposed the first cracks in its anti-wind policy agenda — a loss that may embolden companies targeted by the crackdown on renewable energy development to fight back.
Orsted, the Danish wind giant, was more than halfway done building Revolution Wind by August 22, the day the Bureau of Ocean Energy Management ordered an immediate stop to construction. In a one-page letter explaining the order, the agency dedicated a single paragraph to the rationale behind its decision: “BOEM is seeking to address concerns related to the protection of national security interests of the United States and prevention of interference with reasonable uses of the exclusive economic zone, the high seas, and the territorial seas,” it said.
Orsted filed a lawsuit against the U.S. government within days and asked for a preliminary injunction against the stop-work order. The Trump administration had acted arbitrarily when it halted construction on Revolution Wind, the company argued, a violation of the Administrative Procedures Act, which forces the government to have at least some sensible reason for its decision-making.
There were urgent financial stakes to the court’s decision, the company said. On top of strict timelines for completing the project that were laid out in power purchase agreements, the cable installation company working on Revolution Wind has just a brief window before it is booked for other projects through mid-2028. Unless the judge acted quickly, according to Orsted, Revolution Wind could face “project cancellation and termination of the enterprise,” at an estimated cost of more than $1 billion.
After Orsted filed its suit, the attorneys general of Connecticut and Rhode Island — two of the three states designated to receive electricity from Revolution Wind — soon followed course. The Trump administration responded by doubling down on its claims related to national defense. Revolution Wind, officials argued, would negatively impact radar detection and result in dangerous electromagnetic emissions. They also asserted that Defense Department officials were overruled or ignored when they raised concerns about this matter in the review process for the project, which received its final permits in 2023. (It’s worth noting the Trump administration’s legal filings refer to the military as the Department of War, or DOW.)
The Department of the Interior’s acting assistant secretary for land and minerals management, Adam Suess, told the court on September 12 in a sworn declaration that Revolution Wind had not fully addressed a host of concerns. Suess elaborated on the stop work order, asserting that it concerned the project’s “continued inability to reach certain mitigation agreements” with the military and the National Oceanic and Atmospheric Administration. Suess stated Revolution Wind was not in full compliance with the terms of its construction and operations plan, which are subject to government approval. He also said there were outstanding issues with Revolution Wind’s coordination with military operators at sea, and that there was still “risk from distributed optical fiber sensing and acoustic monitoring equipment.
“The Department has been in touch with NOAA and the DOW to gather more information,” the filing said, somewhat cryptically.
Suess also acknowledged that the Trump administration is reconsidering its prior green lights for Revolution Wind, including its approval of the construction and operations plan, linking this to a broader all-of-government review of the offshore wind industry Trump ordered on Day One via executive order.
In response, Orsted called the government’s bluff. The company submitted sworn declarations from top company officials who had worked on Revolution Wind, attesting to the fact that before Trump came into office, the military and NOAA were saying everything looked A-OK.
“Mr. Suess’ declaration makes new allegations against Revolution Wind that were not mentioned in the stop work order,” Orsted’s attorneys wrote in their reply. “These new allegations are factually inaccurate and controverted by Revolution Wind’s compliance with project requirements.”
One of Orsted’s declarations was from Melanie Gearon, the company’s head of northeast permitting. Suess had claimed that Revolution Wind was far from reaching a critical agreement with NOAA’s Fisheries division, known as the National Marine Fisheries Service, to mitigate the effects of sea surveys on fishing vessels. But Gearon painted a completely different picture, detailing years of negotiations with NOAA and BOEM about how to handle the surveys.
These talks had apparently continued months into the Trump administration. Orsted submitted an email from BOEM to the company dated July 9, in which an official explicitly says that agency staff were discussing scenarios where Orsted could just “state that they are continuing to work with [the National Marine Fisheries Service] on a Survey Mitigation agreement, which could still be submitted at a later date.” Gearon said the company had received “updated cost modeling” from the agency as recently as September 9, days before Suess’ comments were submitted in court.
Then came the comments from Orsted’s head of marine affairs, Edward LeBlanc, who served in the military for decades and worked on offshore energy oversight. He told the court that the Navy had never once raised any issues with the project’s export cable and that as recently as July 2025, no military officials had expressed lingering concerns about electromagnetic emissions, vessel collisions or other potential national security problems.
“To date, Revolution Wind has never received a notice or any indication that it has failed to coordinate with DOD regarding its offshore activities, or that the U.S. Navy or DOD has any concerns with the ongoing coordination,” LeBlanc stated.
It was after this filing that the justice overseeing the case, U.S. District Judge Royce Lamberth, approved the preliminary injunction and lifted the stop-work order.
As long as offshore wind has existed there has been tension with the U.S. military over use of the sea, and it is true that turbines could hinder radar detection.
In 2011, the Defense Department established a “clearinghouse” to resolve any potential issues with ocean energy development of any kind, whether oil, gas, or wind power. The clearinghouse reviews more than 5,000 projects every year, and its activities include regular give and take with the Interior Department and Federal Aviation Administration. One of the many pieces of evidence Orsted submitted in the Revolution Wind case was a December 2024 letter from the clearinghouse stating the project “would not have adverse impacts to DOD missions in the area.”
Josh Kaplowitz, an environmental attorney who represents renewable energy companies including offshore wind developers, and who previously worked in the Interior Department solicitor’s office, told me: “There is not a single situation I am aware of where the Defense Department ever requested something and the approving agency said, ‘No, we’re going to do something else.’”
“There are some problems with coming in after the fact and coming up with post hoc national security rationalizations when the process of review was so rigorous,” Kaplowitz said.
Independent analysis has also cleared the military’s consultation with offshore wind permitting agencies of having any serious issues.
Earlier this year the Government Accountability Office — a quasi-independent watchdog under the control of Congress — released a detailed review of the offshore wind industry’s federal permitting process. The review was requested by one of the sector’s biggest adversaries in Congress, Representative Chris Smith of New Jersey, who has been heavily involved in fighting offshore wind development in his home state.
Smith, a Republican, ultimately celebrated the review’s publication because it pointed out certain ways offshore wind could impact radar detection and military readiness. In his public statements, however, the lawmaker left out a key detail of the report — that it raised no issues with interactions between the military and offices involved in greenlighting offshore wind projects. In fact, it went into great detail on the lengths researchers and government officials had gone toward solving these potential problems.
“We didn’t have any recommendations there,” Frank Russo, director of GAO’s natural resources department, told me in an interview. “It seemed like coordination was going well, that DOD was satisfied with what was going on, and if there were concerns they could be mitigated.”
Russo said that Defense officials had for years been involved in offshore wind leasing, meaning that military staff from the Navy and Coast Guard had already weighed in on potential safety and readiness problems before companies even knew where they were allowed to build, and certainly prior to the project-specific permitting stage.
“At the very start of it, they know where their main concerns are,” Russo said of the Defense Department’s role in offshore wind development.
The Interior Department normally declines to comment on pending litigation. But I still wanted to ask Interior to comment on the assertions from Russo that the Interior Department and military were properly handling the security implications of offshore wind. It felt especially important to ask them about this because Interior Secretary Doug Burgum last month explained the Revolution Wind stop work order on national TV by claiming radar interference would leave the country vulnerable to “swarm attacks” from underwater drones.
Tory Peabody, a Bureau of Ocean Energy Management spokesperson, provided the following statement to Heatmap: “As a result of the court’s decision, Revolution Wind will be able to resume construction as BOEM continues its investigation into possible impacts by the project to national security and prevention of other uses on the Outer Continental Shelf. The Department of the Interior remains committed to ensuring that prior decisions are legally and factually sound.”
Editor’s note: This story has been updated to include a statement from BOEM, and to remove an errant “not” in the second-to-last paragraph.
Packed hearings. Facebook organizing. Complaints about prime farmland and a disappearing way of life. Sound familiar?
Solar and wind companies cite the rise of artificial intelligence to make their business cases after the United States government slashed massive tax incentives for their projects.
But the data centers supposed to power the AI boom are now facing the sort of swift wave of rejections from local governments across the country eerily similar to what renewables developers have been dealing with on the ground over the last decade. The only difference is, this land use techlash feels even more sudden, intense, and culturally diffuse.
What’s happening is simple: Data centers are now routinely being denied by local governments in zoning and permitting decisions after local residents turn against them. These aggrieved denizens organize grassroots campaigns, many with associated Facebook groups, and then flood city council and county commission hearings.
Just take this past week. Last Thursday, Prince George’s County, Maryland, paused all data center permitting after a campaign against converting an abandoned mall into a data center gained traction online, with a petition garnering more than 20,000 signatures. On Monday, faced with a ferocious public outcry, Google rescinded a proposal to build what would’ve been its second data center in Indiana in Franklin Township, a community in southeastern Indianapolis – a withdrawal requested mere minutes before the township council was reportedly going to reject it.
That same day, the rural Illinois town of DeKalb denied a solar company’s request to build a “boutique data center” on the same site as a previously-permitted solar farm. And on Tuesday, the small city of Howell – located smack between Lansing and Detroit, Michigan – denied a data center proposed by an anonymous Fortune 100 company. Apparently, so many people showed up to voice their opposition to the project that the hearing was held in a high school gymnasium.
Opponents cite many things in their arguments against development, some unique to the sector like energy and water use, and others familiar to the solar and wind industry, like preserving prime farmland or maintaining a way of life.
These arguments are incredibly salient, as polling conducted by Heatmap News has revealed: less than half of Americans would ever support a data center coming near them, and this technology infrastructure is less popular than any form of renewable energy. Digging into the cross-tabs of that poll, data centers are unpopular with essentially all age demographics, and arguments against the facilities – like “they use too much water” or “they consume too much electricity” – get relatively similar agreement from registered Democrats and Republicans alike.
Ben Inskeep, a clean energy advocate in Indianapolis, told me he started fighting data centers last year after he became aware of the total power needed to fuel the rising number of projects in the state. His advocacy organization, Citizens Action Coalition of Indiana, previously weighed in on rate hikes and electricity generation decisions. Now, they’re tracking more than 40 data center projects they say are proposed in the state and getting involved in the fight on the ground against them.
Inskeep told me that, from his point of view, the primary support for data centers comes from local governments and municipally-funded works like schools and health facilities that are facing slashed budgets. In some cases the projects are being rejected despite representing millions – even billions – in capital investments and potential tax revenues so large that municipal governments are put between a rock and a hard place as they’re pressured by a weakening economy and state funding cuts.
That’s what happened in Indianapolis. Earlier this month the school district that would’ve been funded by the now-rejected Google data center came out in support of the project, declaring it would welcome new tax revenue, and said it would also lead to new educational partnerships with the tech giant. But none of that mattered. Some local officials even lambasted their colleagues' support as unwarranted, a lashing out that reminds me of what happens to pro-solar officials in Ohio.
Heatmap News has been tracking contested data center projects since the spring of this year and has found almost 100 projects under development across the country that are being actively fought by local organizers, citizens advocacy groups, and environmental organizations. The data is preliminary and likely an undercount.
Still, there’s lots to glean from it. Crucially, as we’ve seen with renewable energy development, data center opposition crops up most often in tandem with the number of projects proposed and constructed. This is only logical: the more of something that is built in a place, the more likely people are to say, “We’ve built enough of that.” This is why Virginia is the top state when it comes to data centers being opposed – it’s a hub that’s seen development spike for far longer than elsewhere in the United States.
I believe that as data center project proposals continue to rise across the country, we’ll see in parallel rising hostility to their development – potentially much larger than anything renewable energy has ever faced. It will undoubtedly also be a problem for anyone in solar or wind who is riding on an AI boom to add demand for their projects.