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A conversation with the most interesting man on the Federal Energy Regulatory Commission.
It’s not every day that a top regulator calls into question the last few decades of policy in the area they help oversee. But that’s exactly what Mark Christie, a commissioner on the Federal Energy Regulatory Commission, the interstate power regulator, did earlier this year.
In a paper enticingly titled “It’s Time To Reconsider Single-Clearing Price Mechanisms in U.S. Energy Markets,” Christie gave a history of deregulation in the electricity markets and suggested it may have been a mistake.
While criticisms of deregulation are by no means new, that they were coming from a FERC commissioner was noteworthy — a Republican no less. While there is not yet a full-scale effort to reverse deregulation in the electricity markets, which has been going on since the 1990s, there is a rising tide of skepticism of how electricity markets do — and don’t — reward reliability, let alone the effect they have on consumer prices.
Christie’s criticisms have a conservative bent, as you’d expect from someone who was nominated by former President Donald Trump to the bipartisan commission. He is very concerned about existing generation going offline and has called activist drives against natural gas pipelines and other transportation infrastructure for the fossil-fuel-emitting power sources a “national campaign of legal warfare…[that] has prevented the construction of vitally needed natural gas transportation infrastructure.”
Since renewables have become, at times, among the world’s cheapest sources of energy and thus quite competitive in deregulated markets with fossil fuels (especially when subsidized), this kind of skepticism is a growing issue in the Republican Party, which has deep ties to oil and gas companies. The Texas state legislature, for instance, responded to Winter Storm Uri, which almost destroyed Texas’ electricity grid in 2021, with its own version of central planning: billions in low cost loans for the construction of new gas-fired power plants. Former Texas Governor Rick Perry, as secretary of energy in the Trump administration, even proposed to FERC a plan to explicitly subsidize coal and nuclear plants, citing reliability concerns. (FERC rejected it.) Some regions that didn’t embrace deregulation, like the Southeast and Southwest, also have some of the most carbon-intensive grids.
But Christie is not so much a critic of renewable resources like wind and solar, per se, as he is very focused on the benefits to the grid of ample “dispatchable” resources, i.e. power sources that can power up and down on demand.
This doesn’t have to mean uncritical acceptance of existing fossil fuel infrastructure. The idea that markets don’t reward reliability enough can help explain the poor winterization for fossil fuel generation that was so disastrous during Winter Storm Uri. And in California, the recognition that renewables alone can’t power the grid 24 hours a day has led to a massive investment in energy storage, which can help approximate the on-demand nature of natural gas or coal without the carbon pollution.
But Christie is primarily interested in the question of just how the planning is done for a system that links together electric generation and consumers. He criticized the deregulated system in much of the country where power is generated by companies separate from the utilities that ultimately sell and distribute that power to customers and where states have less of a role in overall planning, despite ultimately approving electricity rates.
Instead, these markets for power are mediated through a system where utilities pay independent generators a single price for their power at a given time that is arrived at through bidding, often in the context of sprawling multi-state regional transmission organizations like PJM Interconnection, which covers a large swath of the Midwest and Mid-Atlantic region, or the New England Independent System Operator. He says this set-up doesn’t do enough to incentivize dispatchable power, which only comes online when demand spikes, thus making the system overall less reliable, while still showing little evidence that costs have gone down for consumers.
Every year, grid operators and their regulators — including Christie — warn of reliability issues. What Christie argues is that these reliability issues may be endemic to the deregulated system.
Here is where there could be common ground between advocates for an energy transition and conservative deregulation skeptics like Christie. While the combination of deregulation and subsidies has been great for getting solar and wind from zero to around 13 percent of the nation’s utility-scale electricity generation, any truly decarbonized grid will likely require intensive government supervision and planning. Ultimately, political authorities who are guiding the grid to be less carbon-intensive will be responsible for keeping the lights on no matter how cold, warm, sunny, or windy it happens to be. And that may not be something today’s electricity “markets” are up for.
I spoke with Christie in late June about how FERC gave us the electricity market we have today, why states might be better managers than markets, and what he’s worried about this summer. Our conversation has been edited for length and clarity.
What happened to our energy markets in the 1990s and 2000s where you think things started to go wrong?
In the late ‘90s, we had this big push called deregulation. And as I pointed out in the article, it really wasn’t “deregulation” in the sense that in the ‘70s, you know, the trucking and airlines and railroads were deregulated where you remove government price regulation and you let the market set the prices. That’s not what happened. It really was just a change of the price-setting construct and the regulatory construct.
It took what had been the most common form of regulation of utilities, where utilities are considered to be natural monopolies, and said we’re going to restructure these utilities and we’re going to let the generation part compete in these regional markets.
And, you know, from an economic standpoint, okay, so far so good. But there’s been a lot of questioning as to whether there’s really true competition. Many parts of the country also just didn’t do it.
I think there’s a serious question whether that’s benefiting consumers more than the cost of service model where state regulators set the prices.
So if I’m an electricity consumer in one of the markets that’s more or less deregulated, how might reliability become an issue in my own home?
First of all, when you’re in one of these areas that are deregulated, essentially you’re paying the gas price. If it goes up, that’s what you’re going to pay. If it goes down, it looks really good.
But from the reliability standpoint, the question is whether these markets are procuring enough resources to make sure you have the power to keep your lights on 24/7. That is the big question to a consumer in a so-called deregulated state: Are these markets, which are now the main vehicle for buying generation resources, are they getting enough generation resources to make sure that your lights stay on, your heat stays on, and your air conditioning stays on?
Do you think there’s evidence that these deregulated markets are doing a worse job at that kind of procurement?
Well, let’s take, for example, PJM, which came out with an announcement in February that said they were going to lose in the next five years over 40 gigawatts. A gig is 1,000 megawatts, so that’s a lot of power, that’s a lot of generating resources. And the independent market monitor actually has told me it is closer to 50 gigawatts. So all these units are going to retire and they’re going to retire largely for economic reasons. They’re not getting sufficient compensation to stay open.
The essence of restructuring was that generating units are going to have to make their money in the market. They’re not going to get funding through what's called the “rate base,” which is the regulated, traditional cost-of-service model. They have to get it in the markets and theoretically, that sounds good.
But in reality, if they can’t get enough money to pay their cost, they’re going to retire and then you don’t have those resources. Particularly in the RTOs [regional transmission organizations, i.e. the multi-state electricity markets], you’re seeing these markets result in premature retirements of generating resources. And so, now, why is that? It’s more of a problem in the RTOS than non-RTOS because in the non-RTOS, they procure resources under the supervision of a state regulator through what’s called an integrated resource plan or IRP.
The reason I think the advantage and reliability is with the non-RTOS is that those utilities have to prove to a state regulator that their resource plan makes sense, that they’re planning to buy generating resources. Whether they’re buying wind or solar or gas, whatever, they have to go to a state regulator and say, “Here’s our plan” and then seek approval from that regulator. And if they’re shutting down units, the state regulator can say, “Wait a minute, you’re shutting down units that a few years ago you told us were needed for reliability, and now you’re telling us you want to shut them down.” So the state regulator can actually say , “No, you’re not going to shut that unit down. You’re going to keep running it.”
That’s why I think you have more accountability in the non-RTOS because the state regulators can tell the utility, “you need more resources, go build it or buy it,” or “you already have resources, you’re not going to shut them down, we’re not going to let you.”
You don’t have that in an RTO. In an RTO, it’s all done through the market. The market decides, to the extent it has a mind. You know, it’s all the result of market operations. It’s not anybody saying whether it’s a good idea or not for a certain unit to shut down.
I find it interesting that a lot of the criticism of the deregulated system — and a lot of places that are not deregulated — come from more conservative states that would generally not think of themselves as having this kind of strong state role in economic policy. What’s different about electricity? Why do you think the politics of this line up differently than it would on other issues?
I don’t know. That’s an interesting question. I haven’t even thought about it in those terms.
I think it goes back to when deregulation took place in the mid-to-late ‘90s. Other than Texas, which went all the way, the states that probably went farthest on it were in the Northeast. Part of the reason why is because they already had very high consumer prices. I think deregulation was definitely sold as a way to reduce prices to consumers. It hasn’t worked out that way.
Whereas you look at the Southeast, which never went in for deregulation. The Southeastern states, which are still non-RTO states, had relatively very low rates, so they didn’t see a problem to be fixed.
The other big trend since the 1990s and 2000s is the explosive growth of renewables, especially wind and solar. Is there something about deregulated electricity markets, the RTO system, that makes those types of resources economically more favorable than they would be under a different system?
Well, if you’re getting a very high subsidy, like wind and solar are getting, it means you can bid into the energy markets effectively at zero. So if you can bid in at zero offering, you’re virtually guaranteed to be a winner. In a non-RTO state, a state that's doing it through an integrated resource plan, the state regulator reviews the plan. That's why I think an IRP approach is better actually for implementing wind and solar because you can implement and deploy wind and solar as part of an integrated plan that includes enough balancing resources to make sure you keep the lights on.
To me an Integrated Resource Plan is a holistic process, where you can look at all the resources at your disposal: wind, solar, gas, as well as the demand side. And you can balance them all in a way that you think, “Okay, this balance is appropriate for us for the next three years, or four years, or five years.” Because you’re typically doing an IRP every three to five years anyway. And so I think it’s a good way to make sure you balance these resources.
In a market there’s no balancing. In a market it’s just winners and losers. And so wind and solar are almost always going to win because they have such massive subsidies that they’re going to get to offer in at a bid price of zero. The problem with that is they’re not going to get paid zero. They’re going to get paid the highest price [that all electricity suppliers get]. So they offer in at zero, but they get paid the highest price, which is going to be a gas price. It’s probably going to be the last gas unit to clear, that’s usually the one that’s the highest price unit. And yet because of the single clearing price mechanism, everybody gets that price. So you can offer it at zero to guarantee you clear, but then you’re going to get the highest price, usually a gas combustion turbine peaker.
Do you think we would see as much wind and solar on the grid if it weren’t for the fact that a lot of the resources are benefiting from the pricing mechanism you describe?
I don’t think you can draw that conclusion because there are non-RTO states that have what’s called a mandatory RPS, mandatory renewable portfolio standard. And so you can get there through a mandatory RPS and a cost to service model just as you can end up in a market. And actually, again, I think you can get there in a more balanced way to make sure that the reliability is not being threatened in the meantime.
To get back to what we’re talking about in the beginning, my understanding is that FERC, where you are now, played a large role in encouraging deregulation in the formation of RTOs. Is this something that your staff or other commissioners disagree with you about? How do you see the role you’re playing, where you’re doing public advocacy and reshaping this conversation around deregulation?
First of all, we always have to give the standard disclaimer, you never talk about a pending case. But FERC was really the driving force behind a lot of this deregulation. So obviously, they decided that that’s what they wanted to push, and they did. And so I think it’s appropriate as a FERC regulator to raise questions. I think raising questions about the status quo is an important thing that we do and should do. Ultimately, you advocate for what you think it ought to be and if the votes come eventually, it might take several years, but it’s important.
One of the things I try to do is, I put the consumer at the center of everything I do. It is absolutely my priority. And I think that it should be every regulator’s priority, particularly in the electric area because most consumers in America — in fact, almost all consumers in America — are captive customers. By captive. I mean, they don’t get to choose their electric supplier.
Like, where do you live, Matthew?
I live in New York City.
You don’t get to choose, right? You’re getting electricity from ConEd. And you don’t have any choice. So you’re a captive customer. And most consumers in America are captive customers. We tried this retail choice in a few states that didn’t work. You know, they’re still doing it. I’m not going to say whether it’s working or not, but I know we tried it in Virginia, and it didn’t work at all because of a lot of reasons.
I always put customers first and say, “Look, these customers are captive. We have to protect them. We have to protect the captive customers by making sure they’re not getting overcharged.” So that’s why I care about these issues. And that’s why I wrote this article. I think that customers in a lot of ways in America are not getting treated fairly. They’re getting overcharged and I think they’re not getting what they should be getting. And so I think a big part of it is some of this stuff that FERC's been pushing for the last 25 years.
Our time is running out. So I will leave with a question that is topical: It’s already been quite hot in Texas, but outside of Texas and in FERC-land, where are you concerned about reliability issues this summer?
Well, I’m concerned about everywhere. It’s not a flippant remark. I read very closely the reliability reports that we get from NERC and we have reliability challenges in many, many places. It’s not just in the RTOs. I think we have reliability challenges in the South. Fortunately, the West this year, which has been a problem the last couple of years, is actually looking pretty good because all the rain last winter — even flooding — really was great for hydropower.
I’m from California, and I think it’s the first time in my adult life that I remember stories about dams being 100 percent, if not more than 100 percent, full.
The rains and snowfall were so needed. It’s filled up reservoirs that have been really dry for years. And from an electrical standpoint, it’s been really good for hydro. So they’re looking at really good hydro availability this summer in ways they haven't been for the last several years. So the West actually, because of all the rain and the greater available of hydro, I think is in fairly good shape.
There’s a problem in California with the duck curve, the problem is still there. If you have such a high solar content, when the sun goes down, obviously the solar stops generating and so what do you do you know for the next four to five hours? Because the air conditioners are still running, it’s still hot, but that solar production has just dropped off the table. So they’ve been patching with some battery storage and some gas backup.
But I’m worried about everywhere. I watch very closely the reports that come out of the RTOs and you can’t be shutting down dispatchable resources at the rate we’re doing when you’re not replacing them one to one with wind or solar. The arithmetic doesn’t work and it’s going to catch up to us at some point.
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The Energy and Commerce Committee dropped its budget proposal Sunday night.
Republicans on the House Committee on Energy and Commerce unveiled their draft budget proposal Sunday night, which features widespread cuts to the Inflation Reduction Act and other clean energy and environment programs.
The legislative language is part of the House’s reconciliation package, an emerging tax and spending bill that will seek to extend much of the 2017 Tax Cuts and Jobs Act, with reduced spending on the IRA and Medicaid helping to balance the budgetary scales.
The Energy and Commerce committee covers energy and environmental programs, while the Ways and Means Committee has jurisdiction over the core tax credits of the IRA that power much of America’s non-carbon power generation. Ways and Means has yet to release its draft budget proposal, which will be another major shoe to drop.
The core way the Energy and Commerce proposal generates budgetary savings is by proposing “rescissions” to existing programs, whereby unspent money would be yanked away.
The language also includes provisions to auction electromagnetic spectrum, as well as changes to Medicaid.Overall, the Congressional Budget Office told the committee, the recommendations would “reduce deficits by more than $880 billion” from 2025 to 2034, which was the target the committee was instructed to hit. The Sierra Club estimated that the cuts specifically to programs designed to help decarbonize heavy industry would add up to $1.6 billion.
The proposed rescissions would affect a number of energy financing and grant programs, including:
And that’s just the “energy” cuts. The language also includes a number of cuts to environmental programs, including:
Lastly, the proposal would also repeal federal tailpipe emission standards starting in the 2027 model year. These rules, which were finalized just last year, would have provided a major boost to the electric vehicle industry, perhaps pushing EV sales to over half of all new car sales by the beginning of the next decade. The language also repeals the latest gas-mileage standards, which were released last year and would have applied to the 2027 through 2031 model years, eventually bumping up miles-per-gallon industry-wide to over 50 by the 2031 model year.
What the Council on Foreign Relations’ new climate program gets drastically wrong.
Let’s start with two basic facts.
First, the climate crisis is here now, killing people, devastating communities, and destroying infrastructure in Los Angeles and Asheville and Spain and Pakistan and China. And it will get worse.
Second, Donald Trump is the President of the United States. He began the process to withdraw the United States from the Paris Agreement on January 20, 2025, his first day in office in his second term. (He, of course, did this in his first term as well.) He illegally froze funding for climate programs that had passed and became law during the Biden administration, and his administration continues to ignore court orders to unfreeze these monies. He has signed numerous executive orders, including onreinvigorating clean [sic] coal,reversing state-level climate policies, “Zero-based regulatory budgeting to unleash American energy,” and “unleashing” American energy, the last of which revoked more than a dozen Biden era executive orders.
How do we address a world that is increasingly shaped by these two facts?
One attempt can be seen in the Council on Foreign Relations’s new “Climate Realism Initiative.” Its statement of purpose attempts to make climate action palatable to MAGA world by securitizing it, framing climate change as a foreign threat to Fortress America. It calls for investing in next-generation technologies and geoengineering in the hopes of leapfrogging the Chinese-led clean energy revolution that is beginning to decarbonize the world today is the best realistic way forward.
This attempt is doomed to failure. Real climate realism for the United States is to stop the destruction of American state capacity, and then to reflect and build on areas of core strength including finance and software.
CRI’s launch document does not call for the U.S. to reduce its own emissions. I’ll say that again: There is no call for the U.S. to reduce its own emissions in the essay establishing the mission and objectives of the Climate Realism Initiative. Written by Varun Sivaram, formerly chief strategy and innovation officer at wind energy developer Orsted and now the leader of the initiative, the essay proposes that four dug-in “fallacies” are getting in the way of effective policy-making: that climate change “poses a manageable risk” to the U.S.; that “the world’s climate targets are achievable;” that the clean energy transition is a “win-in for U.S. interests and climate action;” and that “reducing U.S. domestic greenhouse gas emissions can make a meaningful difference.” For Sivaram, the problem is always other places and their emissions.
He then goes on to propose three “pillars” of climate realism: the need for America to prepare for a world “blowing through climate targets;” to “invest in globally competitive clean technology industries;” and to “lead international efforts to avert truly catastrophic climate change.” How an America that does not commit to reduce its own emissions will have any credibility or standing to lead international efforts is left unstated.
Sivaram attempts to trick the reader into overlooking America’s emissions by ignoring the facts of the past and focusing instead on guesses about the future. It’s true that in 2023, China produced more than a quarter of new global carbon pollution — more than the United States, Europe, and India combined. But no country has contributed more to the blanket of pollution that traps additional heat in our atmosphere than the United States, which has emitted over 430 billion tons of CO2, or 23% of the world’s total historical emissions. Even in 2023, the U.S. remained the world’s number two carbon polluter.
Sivaram goes further than merely minimizing the U.S. role in creating our current climate problems. Indeed, he sets up climate change as a problem that foreign countries are imposing on Americans. “Foreign emissions,” he writes, “are endangering the American homeland,” and the effects of climate disasters “resemble those if China or Indonesia were to launch missiles at the United States.” There is something to this rhetoric that is powerful — we should think about climate-induced disasters as serious threats and respond to them with the kind of resources that we lavish on the military industrial complex. But the idea that it is foreign emissions that are the primary source of this danger is almost Trumpian.
The initiatives proposed in the Climate Realism launch are the initiatives of giving up. Investing in resilience and adaptation is needed in any scenario, but tying this spending on adaptation to Trumpian notions of protecting our borders reeks of discredited lifeboat ethics, which only cares to save ourselves and leaves others to suffer for our sins. And while supporting next-generation technologies is an appropriate piece of the policy puzzle, they should be like the broccoli at a steakhouse: off to the side and mostly superfluous compared with the meat and potatoes of deployment and mitigation to decarbonize today.
Sivaram may argue that there’s no point in trying to compete against China in the technologies of today when Chinese firms are so dominant and apparently willing to make these products while earning minimal profits. And from a parochial profit-maximizing perspective, there is a business case that firms should not be building lots of new solar cell manufacturing facilities given global manufacturing capacity.
But if American automotive firms simply ignore the coming EV wave and hope against hope that some breakthrough in solid state batteries will allow them to leapfrog over the firms vying today, they are fooling themselves. Electric vehicle giant BYD and world-leading battery manufacturer CATL have both announced batteries that can charge a car in five minutes. Both are also moving in the solid state space, and CATL is pushing into sodium ion batteries.
The notion that U.S. firms ought to sit out this fight for strategic reasons also ignores how China has come to dominate these sectors — by investing in today’s state of the art and pushing it forward through incremental process improvements at scale. The Thielian notion that “competition is for losers” leads to an immense amount of waste as wannabe founders search for unbreakable technological advantages. If venture capitalists want to fund such bets, I’m not going to stop them. But as a policy prescription for climate realism, it fails.
The final gambit of the essay is to advocate for America-controlled geoengineering. This, too, is an area where research may be needed. But regardless, it is the kind of emergency backup plan that you hope that you never need to use, rather than something that should be central to anyone’s policy strategy. Trump is currently decimating American capacity to research hard problems, whether they be cancer or vaccines or social science or anything else, so it is difficult to imagine that this administration is likely to spend real resources to investigate geoengineering.
The Climate Realism Initiative pitches itself as “bipartisan.” But where is the MAGA coalition that supports this? Even simple spending on adaptation and resilience seems unlikely to find much of a political home given the Trump administration’s drastic cuts in weather and disaster forecasting. Sivaram even mentions the need to balance the budget as part of climate realism, which must be a sick joke. For all of the fanfare over cuts to the federal government under Trump, the budget deficit is the last thing that they care about. Tax cuts remain the coin of the realm, with the House budgetary guidelines expanding the deficit by $2.8 trillion. Elon Musk’s Department of Government Efficiency, similarly, has a distorted notion of government efficiency, ignoring the returns to government investments and gutting the tax collection capacity of the IRS.
The Biden administration had plans — “all of the above” energy among them — that were coherent, if not necessarily the most appealing to the world. They were based on the idea that a resilient climate coalition in the U.S. required more than just deploying Chinese-made products.
CRI seems to want to engage instead in a fantasy conversation where anti-Chinese nationalism can unite Americans to fight climate change — an all-form, no-content negative sum realpolitik that does little to address the real, compelling, and deeply political questions that the climate crisis poses.
Alternative visions are possible. The American economy is services based. Americans and American firms will inevitably make some of the hardware components of the energy transition, but the opportunities that play to our strengths are mostly on the software side.
It is critical to remember that the clean technologies that power the energy transition are categorically different from the fossil fuels that the world burned (and still burns) for energy. We do not require a constant stream of these technologies to operate our economy. The solar panels on your roof or in the field outside of town still generate electricity even if you can’t buy new ones because of a trade war. Same with wind turbines. In fact, renewables are a source of energy security because the generation happens from domestic natural resources — the sun and wind. Yet smart thinkers like Jake Sullivan fall into the trap of treating “dependence” on Chinese renewable technologies as analogous to European dependence on Russian natural gas.
Even China’s ban on U.S.-bound rare earth exports won’t make much of a dent. Despite the name, rare earths aren’t that rare, and while China does dominate their processing, it’s a tiny industry; in making fun of the “critical” nature of rare earths, Bloomberg opinion writer Javier Blas noted that the total imports of rare earths from China to the U.S. in 2024 was $170 million, or about 0.03% of U.S.-China trade. That being said, the major concern is if supplies fall to zero then major processes that require tiny amounts of rare earths (like Yttria and turbine construction) could be completely halted with serious fallout.
The American government should carefully choose what industries it would like to support. Commodity factories that have little-to-no profits, like solar cells, seem unattractive. There are many more jobs in installing solar than there are in manufacturing it, after all.
On the other hand, sectors with a much larger existing domestic industry, such as wind turbines and especially automobiles, should not be left to wither. But rather than a tariff wall to protect them, the U.S. auto firms should be encouraged to partner with the leading firms — even if those firms are Chinese — to build joint ventures in the American heartland, so that they and the American people can participate in the EV shift.
But the core of real climate realism for the United States is not about new factories. It’s about playing to our strengths. The United States has the best finance and technology sectors in the world, and these should be used to help decarbonize at home and around the world. This climate realism agenda can come in left- and right-wing flavors. A leftist vision is likely state-led with designs, guides, and plans, while the right-wing vision relies on markets.
Take Texas. On May 7, 2020, the Texas grid set a record with 21.4 gigawatts of renewable electricity generation. Just five years later, that figure hit 41.9 gigawatts. Solar and batteries have exploded on the grid, with capacity hitting 30 gigawatts and 10 gigawatts respectively. They have grown so rapidly because of the state’s market-based system, with its low barriers to interconnection and competitive dynamics.
Of course, not every location is blessed with as much wind, sun, and open space as Texas. But there’s no reason why its market systems can’t be a template for other states and countries. This, too, is industrial policy — not just the factory workers building the technologies or even the installers deploying them. There is lots of work for the lawyers and power systems engineers and advertisers and policy analysts and bankers and consultants, as well.
Yet instead of seizing these real chances to push climate action forward at home and abroad, the Trump administration is eviscerating American state capacity, the rule of law, and global trust in the government. The whipsawing of Trump’s tariffs generates uncertainty that undercuts investment. The destruction of government support for scientific exploration hits at the next-generation moonshots that Sivaram is so enamored of, as well as the institutions that educate our citizens and train our workforce. Trump’s blatant disregard for court orders and his regime’s cronyism undercut belief in the rule of law, and that investments will rise and fall based on their economics rather than how close they are to the President.
But it’s not just Trump. Texas legislators are on the verge of destroying the golden goose of cheap electricity through rapid renewables deployment out of a desire to own the libs. Despite the huge economic returns to rural communities that have seen so much utility-scale expansion in the state, some Republican legislators are pushing bills that would stick their fingers into the electricity market pie, undercutting the renewable expansion and mandating expensive gas expansion.
The Trump business coalition, which was mostly vibes in the first place, is fracturing. There are conflicting interests between those who want to fight inflation and those who see low oil prices as a problem. Pushing down oil prices by pressuring OPEC+ to pump more crude and depressing global economic outlooks with the trade war (Degrowth Donald!) has hurt the frackers in Texas. Ironically, one way to lower their costs is to electrify operations, so they don’t have to rely on expensive diesel.
Climate change is here, but so is Donald Trump. Ignoring either one is a recipe for disaster as they both create destructive whirlwinds and traffic in uncertainty. The real solution to both is mitigation — doing everything possible today to stop as much of the damage as possible before it happens.
On a deal with Beijing, CATL, and the ‘energy emergency’
Current conditions: The high will be 88 degrees Fahrenheit in the Twin Cities today after Minneapolis-Saint Paul hit 90 on Sunday, breaking the 125-year daily record • Localized flooding is expected in the Florida Panhandle due to a slow-moving atmospheric river • A heatwave in North Africa will bring temperatures to 113 degrees today across parts of Mali.
China and the United States have agreed to temporarily lower tariffs on each other’s imports by 115% for 90 days, the countries announced in a joint statement on Monday morning. The deal follows a weekend of trade negotiations in Geneva with Treasury Secretary Scott Bessent, U.S. Trade Representative Ambassador Jamieson Greer, and their Chinese counterparts. The White House had issued a statement from Bessent on Sunday night that teased “substantial progress” between the two nations to address the trade war.
The decision will leave minimum U.S. tariffs on Chinese goods at 30%, down from 145%, and China’s tariffs on American imports at 10%, down from 125%, CNN notes. Monday’s news saw Dow futures rise by 2% and S&P 500 futures rise by almost 3%. But while some have hailed the result of the talks as a “best case scenario,” fears about rising costs have already caused companies including Rivian and First Solar to lower deliverable estimates and expected revenue for the year. China and the U.S. additionally agreed to a “mechanism to continue discussions about economic and trade relations,” while Bessent said both sides are committed to “more balance in trade” going forward.
Image: Sean Gallup/Getty Images
Chinese electric-vehicle battery giant Contemporary Amperex Technology announced in a filing Monday that it aims to raise as much as $4 billion in its Hong Kong Stock Exchange listing this year. CATL EV batteries were installed in more than 17 million vehicles last year, including Teslas, meaning it was represented in one in every three EVs in 2024, The Wall Street Journal reports; however, earlier this year, the company was given a “scarlet letter” in the U.S. when the Pentagon added it to a blacklist of “Chinese military companies.”
CATL is reportedly offering around 118 million shares, with a final price to be announced on or around May 19, and trading starting on May 20. The offer price will be no more than 263 Hong Kong dollars per share, or about $33.81. Its share offering would “more than double proceeds in Hong Kong’s market for listings this year,” per Bloomberg.
Fifteen states filed a lawsuit on Friday arguing that President Trump’s declaration of an “energy emergency” is “unsupported.” As we’ve covered at Heatmap, Trump’s January 20 executive order directed federal agencies to “use all necessary resources to build critical infrastructure” to expedite extraction of coal, natural gas, and oil, including by bypassing or shortening environmental protections and reviews. The states, however, argued in their filing that “U.S. energy production is at an all-time high and growing,” and that “the invocation of the nation’s emergency authorities … is reserved for actual emergencies — not changes in presidential policy.”
The lawsuit was brought by Democratic attorneys general in Washington, California, Arizona, Connecticut, Illinois, Massachusetts, Maine, Maryland, Michigan, Minnesota, New Jersey, Oregon, Rhode Island, Vermont, and Wisconsin. Washington State’s Office of the Attorney General said in a press release that, in addition to being unlawful, Trump’s energy emergency order notably “excludes wind, solar, and batteries — among the cheapest and cleanest modern energy sources that exist today.”
Equinor has threatened to cancel its Empire Wind project if the Trump administration does not immediately lift its stop-work order,E&E News reports. The 54-turbine offshore wind project, located south of New York’s Long Island, is fully permitted and has been under construction since 2024. Equinor, however, said that the Interior Department’s order in April to “halt all construction … until further review of information that suggests the Biden administration rushed through its approval without sufficient analysis” is costing the company $50 million a week, which it called “unsustainable.” Equinor also took issue with the characterization of its permitting process as “rushed,” noting that it took the company eight years to receive its federal permits, and that its lease was obtained during the first Trump administration.
As my colleagues Emily Pontecorvo and Jael Holzman have reported, canceling the project would be a huge blow to New York State’s clean energy goals, since Empire Wind was seen as a path away from its dependence on fossil fuels. “The state’s target of deploying 9 gigawatts of offshore wind by 2035 was already going to be nearly impossible due to Trump’s pause on new leases and permits,” they wrote. “Without the 800 megawatt Empire Wind project, New York will only have 1 gigawatt in the pipeline.”
PJM Interconnection issued a warning on Friday that anticipated above-average temperatures this summer “could trigger [grid] supply shortages for the first time,” Bloomberg reports. PJM — the country’s largest regional transmission organization, operating a 13-state market across much of the East Coast and Midwest — said that for most of the summer, it anticipates a peak of just over 154 gigawatts, “for which PJM should have adequate reserves to maintain reliability.” But 2025 also marks the first time PJM has assessed that an extreme scenario could put it over its generation capacity, with a potential peak demand as high as 166 gigawatts, beating 2006’s record of 165.6 gigawatts. “Under such circumstances, PJM would call on contracted demand response programs,” which pay customers to reduce their electricity use on an emergency basis, “to meet its required reserve needs,” the company said.
Construction began last week on the world’s largest battery storage facility in a new technology center in Laufenburg, Switzerland. The redox flow battery will reportedly have a total capacity of 1.6 gigawatt-hours with an output of over 800 megawatts, surpassing the world’s largest redox flow battery in China, which has a storage capacity of 400 megawatt-hours and an output of 100 megawatts.