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On clean energy projects, forest fires, and Vineyard Wind
Current conditions: Tropical Storm Ernesto has left hundreds of thousands of people without power in Puerto Rico • Drought from El Niño created a 3 million ton corn deficit in southern Africa • Greece remains on high alert for fires through tomorrow as temperatures top 100 degrees Fahrenheit.
Ahead of the upcoming two-year anniversary of the Inflation Reduction Act, the nonprofit Climate Power released a new report analyzing the economic impact of the clean energy investments made possible by the legislation. The topline takeaway: Since August 2022, 646 clean energy projects have been either announced or advanced, creating 334,565 new jobs. Battery manufacturing projects account for the largest share of the new projects, followed by solar projects and EV facilities.
Climate Power
Most of the new projects are located in five states (Michigan, Texas, Georgia, California, and South Carolina) and in congressional districts represented by Republicans in the House of Representatives. These districts alone have seen the creation of 190,727 new jobs and more than $286 billion in clean-energy investment. Projects in low-income communities have brought $114 billion in investment to those areas and created more than 134,000 jobs. The report notes that clean energy jobs tend to pay more, and that most of them do not require a four-year degree, “meaning they’re accessible to all Americans.” Aside from highlighting the “clean energy boom,” the report warns that a second Trump presidency could halt the progress.
Just a little update on the situation at the Vineyard Wind 1 site off the coast of Massachusetts, where activity has been paused since July because of a broken turbine blade: Following a safety consultation, the Bureau of Safety and Environmental Enforcement has told Vineyard Wind it can resume some limited activities, like installing turbine towers and nacelles (the container at the top of the tower where the generator, gearbox, and other key components are located). But it cannot install any new turbine blades, or resume power production. Vineyard Wind and the blade’s manufacturer, GE Vernova, this week did some “controlled cutting” on the damaged turbine to prevent more debris from falling into the ocean. Now they’re looking ahead to next steps, like removing the blade root and figuring out what to do with the big pieces of debris that fell to the seabed. Before the incident, the partially-constructed commercial offshore wind farm was already sending power to the grid.
Climate change is making forest fires more frequent and more destructive, according to the World Resources Institute. By examining data provided by researchers at the University of Maryland, the WRI concluded that the area consumed by fire annually has grown by 5.4% each year since 2001, and “record-setting forest fires are becoming the norm.” In 2023 alone, the amount of land affected by forest fires was 23% larger than the previous record year. Most of the tree cover loss due to fires is happening in the boreal forests, which is worrying because these forests store between 30% and 40% of the world’s terrestrial carbon.
WRI
The growing number of fires is creating a climate feedback loop: More burning releases more carbon dioxide which creates hotter and drier conditions that are conducive to more fires, and on and on it goes. Aside from emphasizing the need to rapidly curb greenhouse gas emissions, the report calls for ending deforestation, and better wildfire risk management.
The Department of Energy yesterday announced it will put an additional $54.4 million toward developing carbon-capture technologies. This could include innovations that capture the emissions from power plants, industrial facilities, or the atmosphere directly, but also new ways to transport and transfer the CO2 once it has been captured. The Office of Fossil Energy and Carbon Management is accepting applications now through October 14.
In a paper published in the journal Environmental Research Letters, scientists say the rate of global warming – that is how quickly the planet is heating up – looks like it will slow in the coming decades. In 2025, the rate of warming is expected to be about .38 degrees Fahrenheit each decade, but this will fall to an increase of .27 degrees Fahrenheit per decade by 2050. Those estimates are based on current mitigation policies, and the researchers say the rate could slow even more if we curb fossil fuel emissions more aggressively. There are a lot of caveats and moving parts here, and the researchers are upfront about this, noting that factors like El Niño, fluctuations in aerosol emissions, and the fact that “climate damage may show a non-linear response to amounts of climate change” could render their projections inaccurate. Nonetheless, “various analyses suggest that under current mitigation policies we are at or near a time of peak anthropogenic carbon emissions.”
“No Republicans voted for the IRA, but they know their constituents are receiving the benefits.” –White House senior climate adviser John Podesta speaking yesterday at an event hosted by think-tank Third Way.
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Rob and Jesse talk about what comes next in the shift to clean energy.
Last night, Donald Trump secured a second term in the White House. He campaigned on an aggressively pro-fossil -fuel agenda, promising to repeal the Inflation Reduction Act, Biden’s landmark 2022 climate law, and roll back Environmental Protection Agency rules governing power plant and car and truck pollution.
On this week’s episode of Shift Key, Jesse and Rob pick through the results of the election and try to figure out where climate advocates go from here. What will Trump 2.0 mean for the federal government’s climate policy? Did climate policies notch any wins at the state level on Tuesday night? And where should decarbonization advocates focus their energy in the months and years to come? 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.
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: You know the real question, I guess — and I just, I don’t have a ton of optimism here — is if there can be some kind of bipartisan support for the idea that changing the way we permit transmission lines is good for economic growth. It’s good for resilience. It’s good for meeting demand from data centers and factories and other things that we need going forward. Whether that case can be made in a different, entirely different political context is to be seen, but it certainly will not move forward in the same context as the [Energy Permitting Reform Act of 2024] negotiations.
Robinson Meyer: And I think there’s a broad question here about what the Trump administration looks like in terms of its energy agenda. We know the environmental agenda will be highly deregulatory and interested in recarbonizing the economy, so to speak, or at least slowing down decarbonization — very oil- and gas-friendly.
I think on the energy agenda, we can expect oil and gas friendliness as well, obviously. But I do think, in terms of who will be appointed to lead or nominated to lead the Department of Energy, I think there’s a range of whether you would see a nominee who is aggressively focused on only doing things to support oil and gas, or a nominee who takes a more Catholic approach and is interested in all forms of energy development.
And I don’t, I don’t mean to be … I don’t think that’s obvious. I just think that’s like a … you kind of can see threads of that across the Republican Party. You can see some politicians who are interested only, really, in helping fossil fuels. You can see some politicians who are very excited, say, about geothermal, who are excited about shoring up the grid, right? Who are excited about carbon capture.
And I think the question of who winds up taking control of the energy portfolio in a future Trump administration means … One thing that was true of the first Trump administration that I don’t expect to go away this time is that the Trump policymaking process is extremely chaotic, right? He’s surrounded by different actors. There’s a lot of informal delegation. Things happen, and he’s kind of involved in it, but sometimes he’s not involved in it. He likes having this team of rivals who are constantly jockeying for position. In some ways it’s a very imperial-type system, and I think that will continue.
One topic I’ve been paying a lot of attention to, for instance, is nuclear. The first Trump administration said a lot of nice things about nuclear, and they passed some affirmatively supportive policy for the advanced nuclear industry, and they did some nice things for small modular reactors. I think if you look at this administration, it’s actually a little bit more of a mixed bag for nuclear.
RFK, who we know is going to be an important figure in the administration, at least at the beginning, is one of the biggest anti nuclear advocates there is. And his big, crowning achievement, one of his big crowning achievements was helping to shut down Indian Point, the large nuclear reactor in New York state. JD Vance, Vice President-elect JD Vance, has said that shutting down nuclear reactors is one of the dumbest things that we can do and seems to be quite pro, we should be producing more nuclear.
Jenkins: On the other hand, Tucker Carlson was on, uh …
Meyer: … suggested it was demonic, yeah.
Jenkins: Exactly, and no one understands how nuclear technology works or where it came from.
Meyer: And Donald Trump has kind of said both things. It’s just super uncertain and … it’s super uncertain.
This episode of Shift Key is sponsored by …
Watershed’s climate data engine helps companies measure and reduce their emissions, turning the data they already have into an audit-ready carbon footprint backed by the latest climate science. Get the sustainability data you need in weeks, not months. Learn more at watershed.com.
As a global leader in PV and ESS solutions, Sungrow invests heavily in research and development, constantly pushing the boundaries of solar and battery inverter technology. Discover why Sungrow is the essential component of the clean energy transition by visiting sungrowpower.com.
Intersolar & Energy Storage North America is the premier U.S.-based conference and trade show focused on solar, energy storage, and EV charging infrastructure. To learn more, visit intersolar.us.
Music for Shift Key is by Adam Kromelow.
Voters don’t hate clean energy, but they also don’t want to work for it.
The re-election of Donald Trump all but assures that the next four years of climate policy will have to unfold at the local level. With a climate change denier who previously wreaked havoc on longstanding environmental regulations, opened wildlife refuges to drilling, and put the U.S. at odds with its international partners now set to return to the White House in January, the country will almost certainly fall far short of its 2030 emission reduction targets. But state and local policies can still achieve meaningful progress on their own: On Wednesday morning, green organizers like Climate Cabinet were already stressing that “it will now be up to state leaders to hold the line against Trump and to ensure continued progress toward clean energy.”
Will Americans defend and advance that progress, though? The results of several climate-related ballot measures that were put to vote Tuesday night are giving mixed signals.
On the one hand, there were a number of victories worth celebrating. Most significantly, Washington voters confirmed their state’s cap-and-invest carbon trading program, which pumps millions of dollars into local transit, environmental, and decarbonization projects. Voters across the country also signed off on creating climate- and conservation-related bonds and funds, including in Honolulu, Louisiana, Jefferson County, Iowa, Minnesota, and (likely) the state of California. Local transit-related measures also, on the whole, had a good night.
But there were some concerning rejections, too. Two counties on the southern Oregon coast expressed overwhelming (though non-binding) opposition to offshore wind development in their region, with some 80% of voters in Curry County signaling their objection. Two-thirds of voters in Berkeley, California — one of the most liberal cities in the country — also rejected what would have been a first-in-the-nation tax on natural gas in large buildings. In Washington, early results on an initiative that is still too close to call show voters on track to approve a measure that would bar cities, towns, and the state from “prohibiting, penalizing, or discouraging” gas appliances in buildings — “discouraging” being the operative, ill-defined, and all-encompassing word — threatening Seattle’s 2050 net-zero emissions target.
South Dakotans also rejected a bill that would have smoothed the permitting process for a carbon dioxide pipeline that would carry CO2 from ethanol plants to an injection well in North Dakota as a means of dealing with planet-warming emissions. Though CO2 pipelines are controversial and have “strange politics,” as Heatmap’s Emily Pontecorvo has written, the citizen-led backlash was often couched in the language of opposing out-of-state interests who were “going to make a buck from the future energy transition.”
My read of the night’s referenda and ballot measures is that voters largely seem willing to do the passive work of supporting climate and environmental policy (for instance by directing the use of property taxes or reconfirming a law already in place) and less willing to voluntarily take on some of the burden themselves, in the form of hosting new development in their communities or opting into transitions away from climate-polluting fuels. This isn’t terribly surprising — local battles over the energy transition are common and frequent enough that we have a whole weekly newsletter here at Heatmap addressing them — but it also suggests that there isn’t nearly enough momentum to prevent potentially catastrophic backsliding under four more years of Trump.
There is good news, though. Local policy is often nimbler and more responsive than state- or federal-level policy. It’s also something anyone can get involved in, and there is presently a wide-open opportunity to convince Americans to embrace a clean energy economy and build things. The seemingly total failure of the current administration to capitalize on the benefits of the Inflation Reduction Act, however, does mean that climate, transit, environmental justice, decarbonization, and conservation organizers and activists will have their work cut out for them in the next years to come.
But it isn’t impossible, even if it is uphill sledding. As Climate Cabinet’s Caroline Spears put it in her Wednesday morning note, “It’s time to go back to our roots, dig deep, and rebuild our democracy and climate progress from the local level up.”
The market picture is at least slightly more mixed than you might think.
While many investors and analysts had anticipated a Donald Trump victory Tuesday — Maheep Mandloi of Mizuho Securities wrote earlier this week that stocks had “priced in” a 70% chance of Trump winning — that hasn’t stopped markets from twitching reflexively now that he’s actually done it.
The clean energy industry, for its part, is already preparing to sell itself to a Republican Washington. The trade group Advanced Energy United’s president Heather O’Neill congratulated Trump in a statement and said it was “committed to working with the Trump-Vance Administration to meeting America’s energy challenges with advanced energy solutions.”
But the market isn’t convinced the gambit will pay off.
The first and most obvious effect of the decisive election result is that clean energy stocks are down. The iShares Global Clean Energy exchange traded fund, whose biggest holdings are the solar panel company First Solar and the Spanish utility and renewables developer Iberdola, was down about 7% in early trading versus yesterday. The iShares U.S. Energy ETF, meanwhile, whose largest holdings are Exxon and Chevron, is up over 3% compared to yesterday and just over 10% on the year.
Some specific publicly traded clean energy stocks have sunk so far today, especially residential solar companies like Sunrun, which was down over 25% in early trading. Sunrun competitor Sunnova was also down over 40%, while the inverter company Solaredge is down over 20%. Solar panel company First Solar, which some analysts think could be protected from a Trump revision of the Inflation Reduction Act due to its U.S. manufacturing presence, is still down over 12%.
“Manufacturing credits will likely stick,” Greg Brew, an analyst at Eurasia Group, told me. “Why touch a whole of bunch of jobs in red districts?”
That doesn’t mean manufacturing will be unaffected. This morning FREYR, a Norwegian battery companies, announced that it will acquire the U.S. assets of Trina Solar, a Chinese solar module manufacturing company. These include a plant in Texas that started production just last week, according to the announcement, indicating worry that a Trump administration could see more trade conflict with China and Chinese companies while also trying to boost domestic manufacturing, even in the renewables sector.
That renewables companies are falling more than fossil energy companies are rising, however, indicates that the market is not expecting a Trump White House to do much to improve oil and gas profitability or production, which has actually increased in the Biden years thanks to the spikes in energy prices following the Russian invasion of Ukraine and continued exploitation of America’s oil and gas resources through hydraulic fracturing. And while the Biden administration attempted to issue a formal pause on approvals of new export terminals for liquified natural gas, a federal judge blocked that move in July. In September, the Department of Energy approved exports for a terminal on the Mexican Gulf Coast using American gas.
“He’s going to come in and say ‘drill baby drill,’” Brew said of Trump. He will also likely increase leasing on federal land and toss the ban on new facilities for liquefied natural gas exports. But the overall effect may be limited. “I don’t think the Biden administration did anything to get in the way of exploration and production investment” for the fossil fuel sector, Brew said.
Cheniere Energy and Energy Transfer, two companies with existing or planned LNG terminals, did see their shares rise a touch in morning trading. Companies that operate oil refineries have also gotten a nice boost today. Phillips 66 and Valero shares are up 4.5% and 5%, respectively, as the market is anticipating an overhaul of Environmental Protection Agency mileage standards designed to accelerate the transition to electric vehicles. “Anything on mileage standards and/or EV credit reduction is likely positive for duration of refining as it pushes out the EV adoption curve,” the investment bank Jefferies wrote in a note to clients.
On the other hand, the wind energy industry has long been the target of specific ire from Trump and is taking a hit Wednesday. U.S.-traded shares of Vestas, the Danish turbine manufacturer, are down almost 15% and have hit their lowest point this year. GE Vernova, meanwhile, the GE energy spinoff that makes both wind turbines and the turbines that go into natural gas power plants (as well as electrical equipment) is up over 3%. Unlike pure-play green energy companies, GE Vernova is positioned to profit from any increase in electricity demand, whether served by renewables or fossil fuels.
And of course, there’s the most valuable green technology company in the world, one that manufactures electric vehicles and batteries (and robots). In early trading, Tesla stock is up over 13%, bringing it to its highest price per share — $285 — since September 2022.
Renewables companies are at risk from both changes in tax policy as well as the potential for Trump’s tax cut and spending plans to keep interest rates high. While the market is focused on the prospects of new legislation and regulation in Washington, renewables companies may be looking just as warily at the Federal Reserve, which will announce an interest rate decision on Thursday. The market expects the federal funds rate to fall another 0.25 percentage points, following the half-point mega-rate cut in September. What happens after that is anyone’s guess.