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Here’s where the Biden administration’s climate spending has gone so far.
All across the United States, grant money from the Inflation Reduction Act has begun to flow.
There’s more than $100 million for protecting the Pacific Ocean’s salmon and steelhead fisheries.
Hundreds of millions more to plant urban canopies in Atlanta, Phoenix, and dozens of other cities.
$1 billion for two new weather research ships for the National Oceanic and Atmospheric Administration, and tens of millions for mapping the best “fuel breaks” — roads, rivers, and other natural features that will slow wildfires in Colorado, Wyoming, and other states.
The Biden administration has begun the gargantuan work of spending down the more than $110 billion in grant funding in the new climate law, the Inflation Reduction Act. It is in a race to spend as much of the money as it can in the next year — before a potential change of administration in 2025 and before climate change gets any worse.
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That effort is about 10% complete. The government has disbursed about $11.8 billion in grants, rebates, and other funding in law, according to an analysis conducted by Heatmap.
The spending is expected to pick up in the next year as the administration accelerates its efforts to get money out the door.
The grants are not the only source of funding from the climate law. The IRA contains three new pots of money: grants and rebates, new loans from the Department of Energy’s Loan Programs Office, and tax credits for clean energy.
The tax credits are the bill’s centerpiece and largest source of funding in the law. They are meant to incentivize people and businesses to switch to clean energy and other climate-friendly technologies. Although they could eventually disburse more than $1 trillion into the economy, according to a Goldman Sachs estimate, we do not yet have public data on their takeup.
The Loan Programs Office, meanwhile, has sent out more than $13 billion in loans to help build new electric-vehicle and battery plants since the law’s passage.
Grants and rebates make up the IRA’s third plank — and one of the largest portions of publicly available funding from the law. They are our first glance at how the law is working.
So far, most of the $11.5 billion in IRA funding already awarded by the Biden administration have gone to pre-existing federal programs or to expand government capacity. The money has decarbonized federal buildings, for instance, or been spent to hire more conservation scientists.
You can see that in the agency that has sent out more IRA-funded grants than any other: the U.S. Department of Agriculture, which has disbursed nearly $3.4 billion from the law this year. That money has largely funded pre-existing agricultural programs, such as the Conservation Stewardship Program, that have now been rewritten to boost “climate-smart agriculture.”
The law’s second-largest tranche of money has gone to the U.S. Postal Service to buy electric delivery vehicles. Although that money has been transferred to the agency, most of it remains unspent. The Postal Service plans to buy 66,000 electric vehicles through 2028 as it moves to an all-electric fleet.
Another $2.4 billion has gone to the Energy Department, which has used the funding to upgrade national labs, including in Idaho, Oregon, West Virginia, and Pennsylvania.
By comparison, the government has sent out relatively little money from new programs established by the IRA.
That is most evident from the Environmental Protection Agency. The EPA has yet to start making grants from its $27 billion Greenhouse Gas Reduction Fund, for instance, a multi-purpose fund which will eventually help capitalize dozens of green banks and provide loans to cut the cost of rooftop solar.
The EPA has also yet to disburse money from its new programs to reduce air pollution from ports, cut methane emissions from oil-and-gas infrastructure, and help environmental-justice organizations.
The IRA also provided nearly $10 billion to the USDA to help rural electric cooperatives decarbonize their power plants; that money has yet to flow as well.
In a statement, the White House said that it had launched about two-thirds of the grant and rebate programs in the IRA, totaling more than $70 billion. (In other words, it may have opened up applications to receive funding from those programs, but not yet awarded any money from them.)
“It's a pace we’re proud of, especially since many programs in the Inflation Reduction Act are being set up from scratch,” Michael Kikukawa, a White Housethe spokesman, said. “These programs are investing in communities, creating good-paying jobs in the clean energy economy, and tackling the climate crisis in every corner of the country.”
Advocates said that the pace of funding would likely pick up over the next few years.
“Given that we have spent the past year working with the Biden administration standing up these grant programs, it’s really not surprising at all that we haven’t seen the eventual pace this bill will reach in the first year,” Holly Burke, communications director for Evergreen, a nonprofit that fights for and advises on federal climate policy, told me. “It does leave us the challenge of running in 2024 on a bill that has only begun to deliver on its promise.”
Among Democrats, some concern persists that the government is not spending the funding fast enough.
Perhaps the easiest place to see this worry is in Democrats’ growing anxiety about the IRA’s home-upgrade rebates, which are administered by the Department of Energy.
These programs are meant to help Americans buy climate-friendly appliances — such as heat pumps, induction stoves, and smart breaker boxes — as well as insulate and weatherize their homes. Last month, dozens of Democratic lawmakers wrote to the Energy Department, asking for a faster rollout of the program.
Democrats love these programs, which rank among the law’s most consumer-facing policies. When President Joe Biden signed the IRA last year, he mentioned these rebate programs before any other policy.
The IRA was “about showing … the American people that democracy still works in America,” Biden said at the time. “It’s going to offer working families thousands of dollars in savings by providing them rebates to buy new and efficient appliances, weatherize their homes.”
But the rebate programs have taken longer to implement than Democrats once hoped. There are two rebate programs in the IRA — one focused on efficiency and weatherization, the other on electrification — and the rules governing them have yet to be finalized by a Department of Energy office. Even though states will eventually administer those rebate programs, few states have received funding even to start up their programs.
At this point, most states will probably launch their rebate programs around the middle of next year, Andy Frank, the chief executive of Sealed, a home-retrofit company, told me.
Some states might lag beyond that. In Georgia, state officials have warned they are aiming to launch by September 30, 2024, at the latest.
Companies, too, are starting to get nervous about the slower pace. Because consumers know that the rebates are on the way, they’re delaying buying new appliances or updating their home insulation, Arch Rao, the chief executive of Span, which makes a new kind of circuit-breaker panel, told me.
That caution is hurting contractors and other installers at exactly the moment that they should be staffing up and preparing for a surge in demand.
“Homeowners are saying, ‘Wait, if rebates are going to be imminently available, then we’re going to wait to decarbonize.’ But contractors can’t plan for that,” Rao said, who was previously a head of product at Tesla. “Supply and demand are being built, but coordination between the two isn’t happening.”
“The Department of Energy is laser focused on cutting costs for working families and businesses through the historic consumer rebates program made available by President Biden’s Investing in America agenda,” Charisma Troiano, a Department of Energy spokeswoman, told me.
“We are working with states to help them move as fast as they are ready to, and look forward to continuing the work of helping American families keep more money in their pockets with an energy efficient and electrified home.”
At least one other IRA rebate program is meant to solve some of these problems: a $200 million program meant to train home contractors to install heat pumps and other home efficiency measures. The program will start awarding grants on November 1.
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Ecolectro, a maker of electrolyzers, has a new manufacturing deal with Re:Build.
By all outward appearances, the green hydrogen industry is in a state of arrested development. The hype cycle of project announcements stemming from Biden-era policies crashed after those policies took too long to implement. A number of high profile clean hydrogen projects have fallen apart since the start of the year, and deep uncertainty remains about whether the Trump administration will go to bat for the industry or further cripple it.
The picture may not be as bleak as it seems, however. On Wednesday, the green hydrogen startup Ecolectro, which has been quietly developing its technology for more than a decade, came out with a new plan to bring the tech to market. The company announced a partnership with Re:Build Manufacturing, a sort of manufacturing incubator that helps startups optimize their products for U.S. fabrication, to build their first units, design their assembly lines, and eventually begin producing at a commercial scale in a Re:Build-owned factory.
“It is a lot for a startup to create a massive manufacturing facility that’s going to cost hundreds of millions of dollars when they’re pre-revenue,” Jon Gordon, Ecolectro’s chief commercial officer, told me. This contract manufacturing partnership with Re:Build is “massive,” he said, because it means Ecolectro doesn’t have to take on lots of debt to scale. (The companies did not disclose the size of the contract.)
The company expects to begin producing its first electrolyzer units — devices that split water into hydrogen and oxygen using electricity — at Re:Build’s industrial design and fabrication site in Rochester, New York, later this year. If all goes well, it will move production to Re:Build’s high-volume manufacturing facility in New Kensington, Pennsylvania next year.
The number one obstacle to scaling up the production and use of cleaner hydrogen, which could help cut emissions from fertilizer, aviation, steelmaking, and other heavy industries, is the high cost of producing it. Under the Biden administration, Congress passed a suite of policies designed to kick-start the industry, including an $8 billion grant program and a lucrative new tax credit. But Biden only got a small fraction of the grant money out the door, and did not finalize the rules for claiming the tax credit until January. Now, the Trump administration is considering terminating its agreements with some of the grant recipients, and Republicans in Congress might change or kill the tax credit.
Since the start of the year, a $500 million fuel plant in upstate New York, a $400 million manufacturing facility in Michigan, and a $500 million green steel factory in Mississippi, have been cancelled or indefinitely delayed.
The outlook is particularly bad for hydrogen made from water and electricity, often called “green” hydrogen, according to a recent BloombergNEF analysis. Trump’s tariffs could increase the cost of green hydrogen by 14%, or $1 per kilogram, based on tariff announcements as of April 8. More than 70% of the clean hydrogen volumes coming online between now and 2030 are what’s known as “blue” hydrogen, made using natural gas, with carbon capture to eliminate climate pollution. “Blue hydrogen has more demand than green hydrogen, not just because it’s cheaper to produce, but also because there’s a lot less uncertainty around it,” BloombergNEF analyst Payal Kaur said during a presentation at the research firm’s recent summit in New York City. Blue hydrogen companies can take advantage of a tax credit for carbon capture, which Congress is much less likely to scrap than the hydrogen tax credit.
Gordon is intimately familiar with hydrogen’s cost impediments. He came to Ecolectro after four years as co-founder of Universal Hydrogen, a startup building hydrogen-powered planes that shut down last summer after burning through its cash and failing to raise more. By the end, Gordon had become a hydrogen skeptic, he told me. The company had customers interested in its planes, but clean hydrogen fuel was too expensive at $15 to $20 per kilogram. It needed to come in under $2.50 to compete with jet fuel. “Regional aviation customers weren’t going to spend 10 times the ticket price just to fly zero emissions,” he said. “It wasn’t clear to me, and I don’t think it was clear to our prospective investors, how the cost of hydrogen was going to be reduced.” Now, he’s convinced that Ecolectro’s new chemistry is the answer.
Ecolectro started in a lab at Cornell University, where its cofounder and chief science officer Kristina Hugar was doing her PhD research. Hugar developed a new material, a polymer “anion exchange membrane,” that had potential to significantly lower the cost of electrolyzers. Many of the companies making electrolyzers use designs that require expensive and supply-constrained metals like iridium and titanium. Hugar’s membrane makes it possible to use low-cost nickel and steel instead.
The company’s “stack,” the sandwich of an anode, membrane, and cathode that makes up the core of the electrolyzer, costs at least 50% less than the “proton exchange membrane” versions on the market today, according to Gordon. In lab tests, it has achieved more than 70% efficiency, meaning that more than 70% of the electrical energy going into the system is converted into usable chemical energy stored in hydrogen. The industry average is around 61%, according to the Department of Energy.
In addition to using cheaper materials, the company is focused on building electrolyzers that customers can install on-site to eliminate the cost of transporting the fuel. Its first customer was Liberty New York Gas, a natural gas company in Massena, New York, which installed a small, 10-kilowatt electrolyzer in a shipping container directly outside its office as part of a pilot project. Like many natural gas companies, Liberty is testing blending small amounts of hydrogen into its system — in this case, directly into the heating systems it uses in the office building — to evaluate it as an option for lowering emissions across its customer base. The equipment draws electricity from the local electric grid, which, in that region, mostly comes from low-cost hydroelectric power plants.
Taking into account the expected manufacturing cost for a commercial-scale electrolyzer, Ecolectro says that a project paying the same low price for water and power as Liberty would be able to produce hydrogen for less than $2.50 per kilogram — even without subsidies. Through its partnership with Re:Build, the company will produce electrolyzers in the 250- to 500-kilowatt range, as well as in the 1- to 5-megawatt range. It will be announcing a larger 250-kilowatt pilot project later this year, Gordon said.
All of this sounded promising, but what I really wanted to know is who Ecolectro thought its customers were going to be. Demand for clean hydrogen, or the lack thereof, is perhaps the biggest challenge the industry faces to scaling, after cost. Of the roughly 13 million to 15 million tons of clean hydrogen production announced to come online between now and 2030, companies only have offtake agreements for about 2.5 million tons, according to Kaur of BNEF. Most of those agreements are also non-binding, meaning they may not even happen.
Gordon tied companies’ struggle with offtake to their business models of building big, expensive, facilities in remote areas, meaning the hydrogen has to be transported long distances to customers. He said that when he was with Universal Hydrogen, he tried negotiating offtake agreements with some of these big projects, but they were asking customers to commit to 20-year contracts — and to figure out the delivery on their own.
“Right now, where we see the industry is that people want less hydrogen than that,” he said. “So we make it much easier for the customer to adopt by leasing them this unit. They don’t have to pay some enormous capex, and then it’s on site and it’s producing a fair amount of hydrogen for them to engage in pilot studies of blending, or refining, or whatever they’re going to use it for.”
He expects most of the demand to come from industrial customers that already use hydrogen, like fertilizer companies and refineries, that want to switch to a cleaner version of the fuel, or hydrogen-curious companies that want to experiment with blending it into their natural gas burners to reduce their emissions. Demand will also be geographically-limited to places like New York, Washington State, and Texas, that have low-cost electricity available, he said. “I think the opportunity is big, and it’s here, but only if you’re using a product like ours.”
On coal mines, Energy Star, and the EV tax credit
Current conditions: Storms continue to roll through North Texas today, where a home caught fire from a lightning strike earlier this week • Warm, dry days ahead may hinder hotshot crews’ attempts to contain the 1,500-acre Sawlog fire, burning about 40 miles west of Butte, Montana• Severe thunderstorms could move through Rome today on the first day of the papal conclave.
The International Energy Agency published its annual Global Methane Tracker report on Wednesday morning, finding that over 120 million tons of the potent greenhouse gas were emitted by oil, gas, and coal in 2024, close to the record high in 2019. In particular, the research found that coal mines were the second-largest energy sector methane emitter after oil, at 40 million tons — about equivalent to India’s annual carbon dioxide emissions. Abandoned coal mines alone emitted nearly 5 million tons of methane, more than abandoned oil and gas wells at 3 million tons.
“Coal, one of the biggest methane culprits, is still being ignored,” Sabina Assan, the methane analyst at the energy think tank Ember, said in a statement. “There are cost-effective technologies available today, so this is a low-hanging fruit of tackling methane.” Per the IEA report, about 70% of all annual methane emissions from the energy sector “could be avoided with existing technologies,” and “a significant share of abatement measures could pay for themselves within a year.” Around 35 million tons of total methane emissions from fossil fuels “could be avoided at no net cost, based on average energy prices in 2024,” the report goes on. Read the full findings here.
Opportunities to reduce methane emissions in the energy sector, 2024
IEA
The Environmental Protection Agency told staff this week that the division that oversees the Energy Star efficiency certification program for home appliances will be eliminated as part of the Trump administration’s ongoing cuts and reorganization, The Washington Post reports. The Energy Star program, which was created under President George H.W. Bush, has, in the past three decades, helped Americans save more than $500 billion in energy costs by directing them to more efficient appliances, as well as prevented an estimated 4 billion metric tons of greenhouse gas from entering the atmosphere since 1992, according to the government’s numbers. Almost 90% of Americans recognize its blue logo on sight, per The New York Times.
President Trump, however, has taken a personal interest in what he believes are poorly performing shower heads, dishwashers, and other appliances (although, as we’ve fact-checked here at Heatmap, many of his opinions on the issue are outdated or misplaced). In a letter on Tuesday, a large coalition of industry groups including the Air-Conditioning, Heating, and Refrigeration Institute, the Association of Home Appliance Manufacturers, and the U.S. Chamber of Commerce wrote to EPA Administrator Lee Zeldin in defense of Energy Star, arguing it is “an example of an effective non-regulatory program and partnership between the government and the private sector. Eliminating it will not serve the American people.”
House Speaker Mike Johnson suggested that the electric vehicle tax credit may be on its last legs, according to an interview he gave Bloomberg on Tuesday. “I think there is a better chance we kill it than save it,” Johnson said. “But we’ll see how it comes out.” He estimated that House Republicans would reveal their plan for the tax credits later this week. Still, as Bloomberg notes, a potential hangup may be that “many EV factories have been built or are under construction in GOP districts.”
As we’ve covered at Heatmap, President Trump flirted with ending the $7,500 tax credit for EVs throughout his campaign, a move that would mark “a significant setback to the American auto industry’s attempts to make the transition to electric vehicles,” my colleague Robinson Meyer writes. That holds true for all EV makers, including Tesla, the world’s most valuable auto company. However, its CEO, Elon Musk — who holds an influential position within the government — has said he supports the end of the tax credit “because Tesla has more experience building EVs than any other company, [and] it would suffer least from the subsidy’s disappearance.”
Constellation Energy Corp. held its quarterly earnings call on Tuesday, announcing that its operating revenue rose more than 10% in the first three months of the year compared to 2024, beating expectations. Shares climbed 12% after the call, with Chief Executive Officer Joe Dominguez confirming that Constellation’s pending purchase of natural gas and geothermal energy firm Calpine is on track to be completed by the end of the year, and that the nuclear power utility is “working hard to meet the power needs of customers nationwide, including powering the new AI products that Americans increasingly are using in their daily lives and that businesses and government are using to provide better products and services.”
But as my colleague Matthew Zeitlin reported, Dominguez also threw some “lukewarm water on the most aggressive load growth projections,” telling investors that “it’s not hard to conclude that the headlines are inflated.” As Matthew points out, Dominguez also has some reason to downplay expectations, including that “there needs to be massive investment in new power plants,” which could affect the value of Constellation’s existing generation fleet.
The Rockefeller Foundation aims to phase out 60 coal-fired power plants by 2030 by using revenue from carbon credits to cover the costs of closures, the Financial Times reports. The team working on the initiative has identified 1,000 plants in developing countries that would be eligible for the program under its methodology.
Rob and Jesse go deep on the electricity machine.
Last week, more than 50 million people across mainland Spain and Portugal suffered a blackout that lasted more than 10 hours and shuttered stores, halted trains, and dealt more than $1 billion in economic damage. At least eight deaths have been attributed to the power outage.
Almost immediately, some commentators blamed the blackout on the large share of renewables on the Iberian peninsula’s power grid. Are they right? How does the number of big, heavy, spinning objects on the grid affect grid operators’ ability to keep the lights on?
On this week’s episode of Shift Key, Jesse and Rob dive into what may have caused the Iberian blackout — as well as how grid operators manage supply and demand, voltage and frequency, and renewables and thermal resources, and operate the continent-spanning machine that is the power grid. Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap, and Jesse Jenkins, a professor of energy systems engineering at Princeton University.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, or wherever you get your podcasts.
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Here is an excerpt from our conversation:
Robinson Meyer: So a number of people started saying, oh, this was actually caused because there wasn’t enough inertia on the grid — that Spain kind of flew too close to the sun, let’s say, and had too many instantaneous resources that are metered by inverters and not by these large mechanical generators attached to its grid. Some issue happened and it wasn’t able to maintain the frequency of its grid as needed. How likely do you think that is?
Jesse Jenkins: So I don’t think it’s plausible as the precipitating event, the initial thing that started to drive the grid towards collapse. I would say it did contribute once the Iberian grid disconnected from France.
So let me break that down: When Spain and Portugal are connected to the rest of the continental European grid, there’s an enormous amount of inertia in that system because it doesn’t actually matter what’s going on just in Spain. They’re connected to this continen- scale grid, and so as the frequency drops there, it drops a little bit in France, and it drops a little bit in Latvia and all the generators across Europe are contributing to that balance. So there was a surplus of inertia across Europe at the time.
Once the system in Iberia disconnected from France, though, now it’s operating on its own as an actual island, and there it has very little inertia because the system operator only scheduled a couple thousand megawatts of conventional thermal units of gas power plants and nuclear. And so it had a very high penetration on the peninsula of non-inertia-based resources like solar and wind. And so whatever is happening up to that point, once the grid disconnected, it certainly lacked enough inertia to recover at that point from the kind of cascading events. But it doesn’t seem like a lack of inertia contributed to the initial precipitating event.
Something — we don’t know what yet — caused two generators to simultaneously disconnect. And we know that we’ve observed oscillation in the frequency, meaning something happened to disturb the frequency in Spain before all this happened. And we don’t know exactly what that disturbance was.
There could have been a lot of different things. It could have been a sudden surge of wind or solar generation. That’s possible. It could have been something going wrong with the control system that manages the automatic response to changes in frequency — they were measuring the wrong thing, and they started to speed up or slow down, or something went wrong. That happened in the past, in the case of a generator in Florida that turned on and tried to synchronize with the grid and got its controls wrong, and that causes caused oscillations of the frequency that propagated all through the Eastern Interconnection — as far away as North Dakota, which is like 2,000 miles away, you know? So these things happen. Sometimes thermal generators screw up.
Music for Shift Key is by Adam Kromelow.