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On EV trends, Rivian’s factory fire, and West Nile Virus
Current conditions: The Midwest is bracing for a brutal heat wave • California’s Sierra Nevada mountain range received a dusting of snow over the weekend • It will be 85 degrees and cloudy today in Flushing Meadows for the start of the U.S. Open tennis championship.
A fire broke out in the parking lot at Rivian’s Normal, Illinois, plant on Saturday, damaging dozens of cars before being extinguished. The plant itself was not affected, according to the Normal Fire Department, and no one was injured. The source of the blaze is under investigation. Rivian’s Normal factory produces all of the EV company’s current models. Last week Rivian got the city’s approval to expand the plant by about 1.3 million square feet to manufacture the upcoming mass-market R2 SUV. EVs catch fire less often than gas-powered cars, but they burn hotter and are harder to put out once alight.
Dr. Anthony Fauci, the former director of the National Institute of Allergy and Infectious Diseases, is recovering from West Nile Virus, a spokeswoman said. Fauci was hospitalized with fever, chills, and fatigue but is now at home and is expected to make a full recovery. According to Dr. Jonathan LaPook, the chief medical correspondent for CBS News, Fauci thinks he was infected after being bitten by a mosquito in his backyard. West Nile is the most common mosquito-borne disease in the United States, according to the Centers for Disease Control and Prevention. So far this year 216 cases have been confirmed. About one in five infected people develop symptoms. According to the Environmental Protection Agency, climate change is one of many factors that increase the risk of human exposure to West Nile by accelerating mosquito development, biting rates, and disease incubation.
The Wall Street Journalexplores what’s going on with plug-in hybrid cars, which have been on the market for more than a decade but are experiencing a bit of a revival as of late. The number of models on sale in the U.S. has nearly doubled over the last five years, to 47, and sales were up 60% in the U.S. in the first quarter of 2024. While conventional hybrids come with a small battery and motor that helps power the car’s engine to reduce fuel use, plug-in hybrids have a bigger battery that’s strong enough to run the vehicle exclusively on electricity for a little while before the gas engine takes over. The recent rise in sales is attributed in part to automakers being forced to comply with new tailpipe emissions rules, and drivers being EV curious but not quite ready to abandon gas entirely. “Plug-in hybrids balance the need to reduce vehicle emissions and offer consumers an entry point to electrified vehicles,” a Stellantis spokesperson told the Journal. GM is bringing back plug-in hybrids in 2027 after axing the Chevrolet Volt. Toyota, Volkswagen, and Ford are all either considering rolling out a plug-in hybrid in the U.S. or expanding existing lineups.
A U.K.-based startup called Promethean Particles recently closed an £8 million ($10.5 million) Series A funding round to make tiny, super absorbent particles that the company says can soak up greenhouse gases. Promethean Particles produces metal-organic frameworks (MOFs), which are “composed of metal ions interconnected by organic molecules to form a porous, lattice-like structure.” These nanoparticles have huge surface area, and the size of their pores can be customized to trap different gases and liquids. So the technology is being eyed as an option for capturing carbon at source for storage and transport, but like many CCS technologies, it is very expensive. The company’s MOFs are already being used in a prototype project in the U.K. Promethean Particles will use the new funding round (which was led in part by Aramco Ventures) to create a bigger manufacturing facility and work to improve affordability.
In case you missed it last week: The U.S. Joint Office of Energy and Transportation recently got to work on its mission to repair roughly 4,500 EV charging ports across the country. It’s starting with an out-of-service charging station in Washington, D.C., that will get new infrastructure and added charging capacity at faster speeds. The upgrades are made possible by a $150 million grant program through the National Electric Vehicle Infrastructure Formula Program, which was created as part of the Bipartisan Infrastructure Law.
Almost all (97%) of the new electricity generation capacity the U.S. added in the first half of 2024 came from carbon-free sources including wind, solar, battery storage, and nuclear.
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Turns out, when you reduce electricity rates for heat pump owners, more people buy heat pumps.
One of the most significant actions a person can take to fight climate change is to swap out their fossil fuel-fired furnace or boiler for electric heat pumps. But while rebates and other subsidies can help defray the up-front cost of the switch, the price of electricity relative to natural gas is still a major deterrent in many places. Lower emissions for higher monthly bills is not much of a tradeoff.
Could the solution be as simple as utilities giving heat pump users a discounted rate in the winter?
There’s a growing consensus among climate and clean energy experts that this is a crucial and urgent step toward decarbonizing, at least in the near term. A number of recent reports make the case not just that discounted rates for heat pump users will help spur adoption of the technology, but also that these customers are currently being overcharged.
The reason why is that today, most utilities operate in “summer peaking” systems, where electricity demand is highest on the hottest days of the year. Utilities spend lots of money on infrastructure like power plants, substations, transformers, and wires to make sure they can deliver power reliably on those days. But in the winter, a lot of that stuff sits unused. So it doesn’t increase overall system costs for people to use more electricity in the winter.
In fact, “it’s less expensive to offer electricity in the winter in summer peaking systems,” Matthew Malinowski, who directs the buildings program at the nonprofit American Council for an Energy-Efficient Economy, told me. And yet a lot of utilities charge customers a flat rate, no matter the time of year. “It seems only fair to charge people less for the electricity they use in the winter,” Malinowski said.
Some utilities are already starting to do this. Malinowski and his colleagues published a study on Tuesday that used real utility rates to examine the current cost of operating heat pumps in four cold-weather states. Their modeling illustrates how heat pump-specific rates can make the technology much more attractive compared to natural gas-fired heating. (Households switching from fuel oil or propane heating to heat pumps will almost always save money.)
The first state they looked at, Maine, has famously had a lot of success getting residents to switch to heat pumps. It turns out favorable rates may have been a big part of that. The cost of electricity there is not much higher than natural gas, so when a household there switches to heat pumps, its annual bills remain roughly the same. Additionally, Maine’s biggest utility recently ran a pilot program where it offered customers the option to sign up for a “heat pump rate,” giving them discounted electricity in the winter and slightly higher than normal electricity in the summer. The study estimated that an average household in Maine using this rate would save just over $200 per year compared to one that heats with natural gas.
Just 6% of households in Maine used heat pumps a decade ago, before the state began offering incentives. As of last year, that number had grown to 26%, although many homes still use natural gas boilers and furnaces as back-up systems.
The other three states the study focuses on — Minnesota, Colorado, and Connecticut — have much higher electricity rates relative to natural gas, and simply switching to a heat pump would not be economic. But Minnesota has a winter pricing program similar to Maine’s. The utility Xcel offers a deeply discounted rate to customers who heat their homes with electricity through the colder months, whether they use heat pumps or less efficient electric resistance systems. The report estimates that heat pump users who opt-in to this rate will save about $400 per year compared to if they heated their homes with natural gas.
Xcel is also the largest utility in Colorado, where it does not yet offer a winter discount rate. There, the authors calculate that heat pumps currently cost about $500 more per year than natural gas heating. But a new law in Colorado requires utilities to submit new heat pump-specific electric rates to regulators for approval by 2027. If Xcel offered the same discount as it does in Minnesota, that would bring heat pump operating costs roughly on par with gas heating.
Colorado isn’t the only state actively pursuing heat pump-specific rates to spur adoption. In Massachusetts, which the study did not look at, a small utility called Unitil began offering a discounted heat pump rate on March 1 of this year, and regulators are requiring National Grid, which serves about 15% of the state, to offer one beginning next winter.
Meanwhile, in Connecticut, electricity prices are so much higher than gas prices that the authors conclude that “rate interventions are ultimately not enough” to make heat pumps competitive. “The state needs deep investment in making electric power more affordable to its residents,” they write, such as “taking on some costs of grid maintenance and upgrades, putting a price on carbon, or implementing clean heat standards.”
One caveat to the study is that it uses electric rates in 2024 but meteorological data from 2018. Since the world was notably warmer last year than in 2018, the authors’ cost estimates are likely conservative. In reality, heat pumps may already be more affordable than the study makes them seem.
Another is that heat pump-specific rates are only really a solution for the next five to 10 years. As more households adopt heat pumps, the electric grid will begin to shift toward a winter-peaking system, and there won’t really be a case to charge heat pump users less. Massachusetts regulators have acknowledged they will need to monitor this and re-evaluate heat pump rates regularly as the situation evolves.
“We’re just responding to the situation today,” Malinowski told me. “Heat pump penetration is very small, and those users are overpaying based on the service they're demanding of the grid, and what they're providing to the grid, which is revenue during off-peak times when electricity is cheaper to provide.”
This is the first story in a Heatmap series on how clean energy has fared under Trump.
The renewables industry was struggling even before Donald Trump made his return to the White House. High interest rates, snarled supply chains, and inflation had already dealt staggering blows to offshore wind; California turned hostile to the residential solar market; and even as deployment of utility-scale solar accelerated, profits haven’t necessarily followed. (Those were still reserved for the fossil fuel industry.)
Then Trump came into office, issuing a barrage of executive orders that, at best, didn’t help, and at worst threatened to choke off the industry’s remaining avenues for growth. Now, Republican legislators are eyeing the Inflation Reduction Act for red meat to feed their tax cut machine; Elon Musk — himself the richest green tech entrepreneur of all time — is captaining an effort to slash the size of the federal government, particularly environmental programs; and the federal regulatory apparatus has essentially ground to a halt.
The early days of the Trump presidency have turned a clean energy slump into a kind of green freeze, with projects being cancelled and clean energy investors in many cases fixating on hypothetical policy changes, as opposed to the ins and outs of any given quarter. This creates a kind of trap for green energy companies, which are being punished in the immediate term for bad results while investors sit on the sidelines until the final resolution of the IRA comes into focus.
Speaking about the solar industry specifically, Morningstar analyst Brett Castelli told me that near term viability is not going to be about the specifics of any given company’s financial performance. “It’s going to be about how much the IRA is potentially changed.”
That’s likely the case across the green energy sectors. The iShares Global Clean Energy ETF, which tracks a number of renewables companies, is down 14% since November 5, and down 20% in the past year. “All businesses like certainty,” Castelli said. “The renewables market right now is facing a high degree of uncertainty in regards to what changes are coming to the IRA.”
But not every company has been affected equally. Those that were already flagging have been quick to blame the political environment, while others have gamely tried to explain to investors and the public how their lines of business align with the Trump administration’s priorities.
Executives at the residential solar company Sunnova — whose stock has fallen to below a dollar a share since it issued a “going concern” notice, essentially notifying investors that its existence as a company was under threat — mentioned “policy” or “political” or “politicians” six times in its earnings call last week. Chief Executive John Berger told an analyst that the reason for the going concern notice was that “the overall environment is terrible. I mean, it’s the political environment, the capital markets,” and that the company “struggled to close some things after the election.”
Berger stepped down Monday, and Sunnova’s former chief operating officer Paul Mathews immediately took over. Mathews “will focus on disciplined growth, stronger cash generation, cost efficiency, and enhancing the customer experience,” the company said.
Other companies have told investors and the public that they’re scrapping expansion plans, in many cases due to a policy change or a market change running downhill from policy.
“Manufacturing is probably where we see the biggest concern,” Maheep Mandloi, a stock analyst at Mizuho Securities, told me. “A lot of solar and battery projects are getting pushed out.”
Among them, battery manufacturer KORE Power, said in February that it was canceling a $1 billion battery project in Arizona. The Arizona facility was going to be supported with federal financing, specifically a loan from the Energy Department’s Loan Program Office for up to $850 million, but theconditional commitment never turned into cash in hand before the end of the Biden administration. Its new chief executive, Jay Bellows, told Canary Media that the company wanted to retrofit an existing facility into a battery plant instead.
Aspen Aerogels, which makes thermal barriers for batteries in electric vehicles, told investors in February that it wouldn’t move forward with a planned new plant in Statesboro, Georgia, and would instead “maximize capacity” at its Rhode Island plant. The company’s chief financial officer noted that it had already “decided to right-time” its Statesboro project in early 2023, “pre-empting a reset in EV demand expectations.”
And just last week, Ascend Elements, a battery materials company, said it was scrapping plans to manufacture cathode active material at its Hopkinsville, Kentucky plant, the Times Leader reported Thursday. Ascend said that it had agreed with the Department of Energy to cancel a $164 million grant that would support cathode active material (a key battery component) manufacturing, although a separate, $316 million grant for cathode precursor technology “remains active.”
But optimism still abounds — and it has nothing to do with any hopes about the fate of grants and tax credits under the IRA. Regardless of the law’s fate, the exuberance over artificial intelligence may prove to be an even greater subsidy.
In contrast to Sunnova, Sunrun — another residential solar company whose stock price has flagged since the election, but whose ability to stay in business has not been questioned — put a much more neutral spin on the political environment. Chief Executive Mary Powell told investors during the company’s earnings call in late February, “The fundamental long-term demand drivers for our business are incredibly strong and unrelated to any political party affiliation. Americans want greater energy independence and control of their lives and their pocketbooks. The country also needs more power from all sources to fuel rapid growth in electrification and data centers, and our growing fleet of energy resources will be part of the solution.”
Where once executives focused their rah-rah optimism on the declining costs of renewables, today they’re talking up their products’ quick path to deployment. The speed with which renewables can be built and switched on — especially solar and storage — compares favorably to the four-to-five year development timelines for new gas-fired plants. NextEra chief executive John Ketchum told analysts in a January earnings call “you can build a wind project in 12 months, a storage facility in 15, and a solar project in 18 months.”
That’s either the light at the end of the tunnel or the pot of gold at the end of the rainbow, depending on your level of fatalism or skepticism.
This oncoming demand could reignite the renewables industry even if it potentially loses access to generous IRA subsidies, Ben Hubbard, the chief executive of the infrastructure advisory firm Nexus Holdings, told me.
“The hyperscale datacenter demand is pretty massive, and when you have to really start massively upgrading your transmission and distribution infrastructure, those rates get passed on, unfortunately, to the average ratepayer like me and you and everybody else.” With higher rates, renewables could become profitable and investable on their own, without IRA subsidies, Hubbard said.
NextEra, a major renewables developer that also operates a natural gas fleet, has been one of the main promoters of the “speed to power” narrative. In its January earnings call, Ketchum told analysts, “We’re expecting load demand to increase over 80% over the next five years, six-fold over the next 20 years. And if you think about generation types and needing all of the above, they’re not all created equally in terms of timing.”
Although the Trump administration is seeking to unleash fossil fuel development, power plants don’t build themselves. They need, at the very least, turbines, and those gas turbines are not easy to get your hands on. As Heatmap has reported, manufacturer GE Vernova has only modest plans to increase capacity, and is already getting reservations for turbine slots in 2027 and 2028.
“With gas-fired generation, the country is starting from a standing start,” NextEra CEO Ketchum said on the earnings call. “We need shovels in the ground today because our customers need the power right now.”
Developers and investors hope this means that data center developers and utilities will become both voracious and omnivorous in their power demand.
“I think what you’re going to see is the big tech companies, especially, are going to just have to eat the cost if they want to win the AI race,” Hubbard told me. “They’re going to take natural gas fuel, and they’re going to take biomass power, and they’re going to take solar. They’re going to take it all, because it’s almost insignificant relative to getting ahead of AI demand.”
Most of the industry, however, is gamely working through an environment where their day-to-day business may be fine, but their investors are still in wait-and-see mode.
“The common feedback we hear from a lot of investors is, 'I’ll just probably come back once the dust settles and I know exactly what things are going to change,” Mandloi told me.
That’s even as executives point to a glorious future of AI-driven electricity demand. But investors may be waiting to count their chips from the IRA before they’re willing to take a flyer on powering data centers that are yet to be built.
And there’s nothing certain about the AI boom, either. More computationally efficient Chinese models have thrown that energy narrative into doubt, driving down the share price of Nvidia, which makes the chips that consume all that data center power (along with the share prices of power companies with large natural gas fleets). That stock is down by almost 20% so far this year. If the chip designer’s AI profits are less than previously thought, the electron providers may have to settle for less, as well. Renewables companies are hoping the data center boom will be a case of “if you build it, they will come,” but investors aren’t yet quite willing to buy it.
For those keeping score, that’s three more than wanted to preserve them last year.
Those who drew hope from the letter 18 House Republicans sent to Speaker Mike Johnson last August calling for the preservation of energy tax credits under the Inflation Reduction Act must be jubilant this morning. On Sunday, 21 House Republicans sent a similar letter to House Ways and Means Chairman Jason Smith. Those with sharp eyes will have noticed: That’s three more people than signed the letter last time, indicating that this is a coalition with teeth.
As Heatmap reported in the aftermath of November’s election, four of the original signatories were out of a job as of January, meaning that the new letter features a total of seven new recruits. So who are they?
The new letter is different from the old one in a few key ways. First, it mentions neither the Inflation Reduction Act nor its slightly older cousin, the Infrastructure Investment and Jobs Act, by name. Instead, it emphasizes “the importance of prioritizing energy affordability for American families and keeping on our current path to energy dominance amid efforts to repeal or reform current energy tax credits.” The letter also advocates for an “all-of-the-above” approach to energy development that has long been popular among conservatives but has seemed to fall out of vogue under Trump 2.0.
Lastly, while the new letter repeats the previous version’s emphasis on policy stability for businesses, it adds a new plea on behalf of ratepayers. “As our conference works to make energy prices more affordable, tax reforms that would raise energy costs for hard working Americans would be contrary to this goal,” it reads. “Further, affordable and abundant energy will be critical as the President works to onshore domestic manufacturing, supply chains, and good paying jobs, particularly in Republican run states due to their business-friendly environments. Pro-energy growth policies will directly support these objectives.”
As my colleagues Robinson Meyer and Emily Pontecorvo have written, tariffs on Canadian fuel would raise energy prices in markets across the U.S. That includes some particularly swingy states, e.g. Michigan, which perhaps explains Rep. James’ seeming about-face.
Republicans’ House majority currently stands at all of four votes, so although 21 members might not be huge on the scale of the full House, they still represent a significant problem for Speaker Johnson.