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On trade turbulence, special election results, and HHS cuts
Current conditions: A rare wildfire alert has been issued for London this week due to strong winds and unseasonably high temperatures • Schools are closed on the Greek islands of Mykonos and Paros after a storm caused intense flooding • Nearly 50 million people in the central U.S. are at risk of tornadoes, hail, and historic levels of rain today as a severe weather system barrels across the country.
President Trump today will outline sweeping new tariffs on foreign imports during a “Liberation Day” speech in the White House Rose Garden scheduled for 4 p.m. EST. Details on the levies remain scarce. Trump has floated the idea that they will be “reciprocal” against countries that impose fees on U.S. goods, though the predominant rumor is that he could impose an across-the-board 20% tariff. The tariffs will be in addition to those already announced on Chinese goods, steel and aluminum, energy imports from Canada, and a 25% fee on imported vehicles, the latter of which comes into effect Thursday. “The tariffs are expected to disrupt the global trade in clean technologies, from electric cars to the materials used to build wind turbines,” explained Josh Gabbatiss at Carbon Brief. “And as clean technology becomes more expensive to manufacture in the U.S., other nations – particularly China – are likely to step up to fill in any gaps.” The trade turbulence will also disrupt the U.S. natural gas market, with domestic supply expected to tighten, and utility prices to rise. This could “accelerate the uptake of coal instead of gas, and result in a swell in U.S. power emissions that could accelerate climate change,” Reutersreported.
Republican candidates won in two House races in Florida on Tuesday, one of which was looking surprisingly tight going into the special elections. The victories by Jimmy Patronis in Florida’s First District and Randy Fine in the Sixth District bolster the party’s slim House majority and could spell trouble for the Inflation Reduction Act as the House Ways and Means Committee mulls which programs to cut to pay for tax cuts. But the result in Wisconsin’s Supreme Court election was less rosy for Republicans. Liberal Judge Susan Crawford defeated conservative Brad Schimel despite Schimel’s huge financial backing from Tesla CEO and Trump adviser Elon Musk, who poured some $15 million into the competition. The outcome “could tarnish the billionaire’s political clout and trigger worry for some Republicans about how voters are processing the opening months of Trump’s new administration,” as The Wall Street Journalexplained.
The Trump administration announced mass layoffs across the Department of Health and Human Services on Wednesday, part of a larger effort to reduce the agency’s workforce by 25%. The cuts included key staffers with the Low Income Home Energy Assistance Program, which has existed since 1981 and helps some 6.7 million low-income households pay their energy bills. A 2022 white paper calls LIHEAP “one of the most critical components of the social safety net.” The move comes at a time when many U.S. utilities are preparing to raise their energy prices to account for higher costs for materials, labor, and grid upgrades. In a scathing letter to HHS Secretary Robert F. Kennedy. Jr., Senate Energy and Commerce Democrats call the workforce cuts “reckless” and demand detailed explanations for why roles have been eliminated.
Energy storage startup Energy Vault on Wednesday announced it had closed $28 million in project financing for a hybrid green hydrogen microgrid energy storage facility in California. The firm says its Calistoga Resiliency Center, deployed in partnership with utility company Pacific Gas & Electric, is “specifically designed to address power resiliency given the growing challenges of wildfire risk in California.” The zero-emission system will feature advanced hydrogen fuel cells that are integrated with lithium-ion batteries, which can provide about 48 hours of back-up power via a microgrid to the city of Calistoga during wildfire-related power shutoffs. The site is expected to be commercially operational in the second quarter of 2025.
“The CRC serves as a model for Energy Vault’s future utility-scale hybrid microgrid storage system deployments as the only existing zero-emission solution to address [power shutoff] events that is scalable and ready to be deployed across California and other regions prone to wildfires,” the company said in a press release. As Heatmap’s Katie Brigham wrote last fall, PG&E has become an important partner for climate and energy tech companies with the potential to reduce risk and improve service on the grid.
China will finalize its first-ever sale of a green sovereign bond Wednesday. The country is expected to issue the bond on the London Stock Exchange and has reportedly received more than $5 billion in bids. “It’s no coincidence that China has chosen to list its debut green bond in London, given European investors’ continued strong demand for environmental products,” Bloombergnoted. Green bonds are investment vehicles that raise money exclusively for projects that benefit the climate or environment. China’s finance ministry wants the bond to “attract international funds to support domestic green and low-carbon development,” and specifically climate change mitigation and adaptation, nature conservation and biodiversity, and pollution prevention and control. Some of the money raised might also go toward China’s EV charging infrastructure, according toReuters.
GE Vernova has now produced more than half of the turbines needed for the SunZia Wind project in New Mexico. When completed in 2026, the 2.4 gigawatt project will be the largest onshore wind farm in the Western Hemisphere.
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On record-breaking temperatures, oil prices, and Tesla Robotaxis
Current conditions: Wildfires are raging on the Greek island of Chios • Forecasters are monitoring a low-pressure system in the Atlantic that could become a tropical storm sometime today • Residents in eastern North Dakota are cleaning up after tornadoes ripped through the area over the weekend, killing at least three people.
A dangerous heat wave moves from the Midwest toward the East Coast this week, and is expected to challenge long-standing heat records. In many places, temperatures could hit 100 degrees Fahrenheit and feel even warmer when humidity is factored in. “High overnight temperatures will create a lack of overnight cooling, significantly increasing the danger,” according to the National Weather Service. Extreme heat warnings and advisories are in effect from Maine through the Carolinas, across the Ohio Valley and down into southern states like Mississippi and Louisiana. “It’s basically everywhere east of the Rockies,” National Weather Service meteorologist Mark Gehring told The Associated Press. “That is unusual, to have this massive area of high dew points and heat.”
AccuWeather
Regional grid operator PJM Interconnection, which covers 13 states, issued an energy emergency alert for today. The alert urges power transmission and generation owners to delay any planned maintenance so that no grid sources are out of commission as temperatures soar. A heat wave of this nature is rare this early in the summer. The last time temperatures hit 100 degrees in June in New York City, for example, was in 1995, according to AccuWeather. Heat waves are becoming more frequent and more intense as the climate warms. Here’s a look at how these events have changed over the past 60 years or so:
Oil markets are jittery this morning after Iran’s parliament endorsed a measure to block the Strait of Hormuz in response to U.S. strikes on Iranian nuclear facilities. About 20% of the world’s oil and liquified natural gas shipments travel through the shipping route, and as The Wall Street Journalexplains, the supplies “dictate prices paid by U.S. drivers and air travelers.” Oil prices rose to five-month highs this morning on the news. Tehran has long threatened to close the strait, but such a move is seen as unlikely because it would disrupt Iran’s own energy exports, which are its “sole global energy revenue stream,” one analyst told the Journal.
A handful of climate-related provisions in the GOP’s reconciliation bill are in limbo after the Senate parliamentarian advised that the policies violated the “Byrd Rule,” i.e. were deemed extraneous to budgetary matters, and thus were subject to a 60-vote threshold instead of the simple majority allowed for reconciliation. The provisions include:
The Senate Finance Committee is set to meet with the parliamentarian today.
In case you missed it: The Supreme Court on Friday gave the green light for fuel producers to challenge a Clean Air Act waiver issued by the EPA that lets California set tougher vehicle emissions standards than those at the federal level. A lower court rejected the lawsuit from Diamond Alternative Energy and other challengers last year, but as Justice Brett Kavanaugh wrote for the majority, California’s ambitious Zero-Emission Vehicle Program is hurting fuel producers, so they have standing to sue. The vote was 7 to 2, with Justices Sonia Sotomayor and Ketanji Brown Jackson dissenting.
As Heatmap’s Katie Brigham has explained, if the EPA waiver is eliminated, Tesla could take a big financial hit. That’s because the zero-emissions vehicle program lets automakers earn credits based on the number and type of ZEVs they produce, and since Tesla is a pure-play EV company, it has always generated more credits than it needs. “The sale of all regulatory credits combined earned the company a total of $595 million in the first quarter [of 2025] on a net income of just $409 million,” Brigham reported. “That is, they represented its entire margin of profitability. On the whole, credits represented 38% of Tesla’s net income last year.”
Tesla launched its Robotaxi service in Austin, Texas, over the weekend. A small number of rides were doled out to hand-picked influencers and retail investors, and a Tesla employee sat in the front passenger seat of each autonomous Model Y to monitor safety. The rollout was “uncharacteristically low-key,” Bloombergreported, but CEO Elon Musk said the company is being “super paranoid about safety.” San Francisco, Los Angeles, and San Antonio are rumored to be the next cities slated for Robotaxi service. “Tesla is still behind Waymo, by several years,” wrote Jameson Dow at Electrek. “But Waymo has also not been scaling particularly quickly, and certainly both are slower than a lot of techno-optimists would have liked. So we’ll have to see which tortoise wins this race.” The stakes are pretty high: Investment management firm ARK Invest projected that Robotaxis could bring in $951 billion for Tesla by 2029 and make up 90% of the company’s earnings.
A new report from energy think tank Ember concludes that in the world’s sunniest cities, it’s now possible (and economically viable) to get at least 90% of the way to constant solar electricity output for every hour of the day, 365 days a year.
A conversation with Mary King, a vice president handling venture strategy at Aligned Capital
Today’s conversation is with Mary King, a vice president handling venture strategy at Aligned Capital, which has invested in developers like Summit Ridge and Brightnight. I reached out to Mary as a part of the broader range of conversations I’ve had with industry professionals since it has become clear Republicans in Congress will be taking a chainsaw to the Inflation Reduction Act. I wanted to ask her about investment philosophies in this trying time and how the landscape for putting capital into renewable energy has shifted. But Mary’s quite open with her view: these technologies aren’t going anywhere.
The following conversation has been lightly edited and abridged for clarity.
How do you approach working in this field given all the macro uncertainties?
It’s a really fair question. One, macro uncertainties aside, when you look at the levelized cost of energy report Lazard releases it is clear that there are forms of clean energy that are by far the cheapest to deploy. There are all kinds of reasons to do decarbonizing projects that aren’t clean energy generation: storage, resiliency, energy efficiency – this is massively cost saving. Like, a lot of the methane industry [exists] because there’s value in not leaking methane. There’s all sorts of stuff you can do that you don’t need policy incentives for.
That said, the policy questions are unavoidable. You can’t really ignore them and I don’t want to say they don’t matter to the industry – they do. It’s just, my belief in this being an investable asset class and incredibly important from a humanity perspective is unwavering. That’s the perspective I’ve been taking. This maybe isn’t going to be the most fun market, investing in decarbonizing things, but the sense of purpose and the belief in the underlying drivers of the industry outweigh that.
With respect to clean energy development, and the investment class working in development, how have things changed since January and the introduction of these bills that would pare back the IRA?
Both investors and companies are worried. There’s a lot more political and policy engagement. We’re seeing a lot of firms and organizations getting involved. I think companies are really trying to find ways to structure around the incentives. Companies and developers, I think everybody is trying to – for lack of a better term – future-proof themselves against the worst eventuality.
One of the things I’ve been personally thinking about is that the way developers generally make money is, you have a financier that’s going to buy a project from them, and the financier is going to have a certain investment rate of return, or IRR. So ITC [investment tax credit] or no ITC, that IRR is going to be the same. And the developer captures the difference.
My guess – and I’m not incredibly confident yet – but I think the industry just focuses on being less ITC dependent. Finding the projects that are juicier regardless of the ITC.
The other thing is that as drafts come out for what we’re expecting to see, it’s gone from bad to terrible to a little bit better. We’ll see what else happens as we see other iterations.
How are you evaluating companies and projects differently today, compared to how you were maybe before it was clear the IRA would be targeted?
Let’s say that we’re looking at a project developer and they have a series of projects. Right now we’re thinking about a few things. First, what assets are these? It’s not all ITC and PTC. A lot of it is other credits. Going through and asking, how at risk are these credits? And then, once we know how at risk those credits are we apply it at a project level.
This also raises a question of whether you’re going to be able to find as many projects. Is there going to be as much demand if you’re not able to get to an IRR? Is the industry going to pay that?
What gives you optimism in this moment?
I’ll just look at the levelized cost of energy and looking at the unsubsidized tables say these are the projects that make sense and will still get built. Utility-scale solar? Really attractive. Some of these next-gen geothermal projects, I think those are going to be cost effective.
The other thing is that the cost of battery storage is just declining so rapidly and it’s continuing to decline. We are as a country expected to compare the current price of these technologies in perpetuity to the current price of oil and gas, which is challenging and where the technologies have not changed materially. So we’re not going to see the cost decline we’re going to see in renewables.
And more news around renewable energy conflicts.
1. Nantucket County, Massachusetts – The SouthCoast offshore wind project will be forced to abandon its existing power purchase agreements with Massachusetts and Rhode Island if the Trump administration’s wind permitting freeze continues, according to court filings submitted last week.
2. Tippacanoe County, Indiana – This county has now passed a full solar moratorium but is looking at grandfathering one large utility-scale project: RWE and Geenex’s Rainbow Trout solar farm.
3. Columbia County, Wisconsin – An Alliant wind farm named after this county is facing its own pushback as the developer begins the state permitting process and is seeking community buy-in through public info hearings.
4. Washington County, Arkansas – It turns out even mere exploration for a wind project out in this stretch of northwest Arkansas can get you in trouble with locals.
5. Wagoner County, Oklahoma – A large NextEra solar project has been blocked by county officials despite support from some Republican politicians in the Sooner state.
6. Skagit County, Washington – If you’re looking for a ray of developer sunshine on a cloudy day, look no further than this Washington State county that’s bucking opposition to a BESS facility.
7. Orange County, California – A progressive Democratic congressman is now opposing a large battery storage project in his district and talking about battery fire risks, the latest sign of a populist revolt in California against BESS facilities.