CERAWeek Loves Chris Wright

Current conditions: Critical fire weather returns to New Mexico and Texas and will remain through Saturday • Sharks have been spotted in flooded canals along Australia’s Gold Coast after Cyclone Alfred dropped more than two feet of rain • A tanker carrying jet fuel is still burning after it collided with a cargo ship in the North Sea yesterday. The ship was transporting toxic chemicals that could devastate ecosystems along England’s northeast coast.

THE TOP FIVE

1. Chris Wright says climate change is a ‘side effect of building the modern world’

In a keynote speech at the energy industry’s annual CERAWeek conference, Energy Secretary Chris Wright told executives and policymakers that the Trump administration sees climate change as “a side effect of building the modern world,” and said that “everything in life involves trade-offs." He pledged to “end the Biden administration’s irrational, quasi-religious policies on climate change” and insisted he’s not a climate change denier, but rather a “climate realist.” According to The New York Times, “Mr. Wright’s speech was greeted with enthusiastic applause.” Wright also reportedly told fossil fuel bosses he intended to speed up permitting for their projects.

Other things overheard at Day 1 of CERAWeek:

• Interior Secretary Doug Burgum suggested reopening shuttered coal-fired power plants. Coal-fired power plants account for the largest share (66%) of planned capacity retirements this year in the U.S. Meanwhile, 81% of the new utility-scale power coming online this year will be from renewables.
• International Energy Agency chief Fatih Birol said there is a “need for oil and gas upstream investments,” especially in existing fields.
• Chevron CEO Mike Wirth lamented the recent drastic changes in U.S. energy policy: “Swinging from one extreme to another is not the right policy approach. We have allocated capital that’s out there for decades, and so we really need consistent and durable policy. We need to see some of this in legislation so it’s more durable and not at risk of being swung back in another direction by a future administration.”
• The CEO of oil giant Saudi Aramco said there is “more chance of Elvis speaking next” than the energy transition succeeding.

2. Canada’s Ontario to charge 25% more for electricity exported to U.S.

The premier of Canada’s Ontario province announced he is hiking fees on electricity exported to the U.S. by 25%, escalating the trade war kicked off by President Trump’s tariffs on Canadian goods, including a 10% tariff on Canadian energy resources. The decision could affect prices in Minnesota, New York, and Michigan, which get some of their electricity from the province. Ontario Premier Doug Ford estimated the surcharge will add about $70 to the monthly bills of affected customers. “I will not hesitate to increase this charge,” Ford said. “If the United States escalates, I will not hesitate to shut the electricity off completely.” The U.S. tariffs went into effect on March 4. Trump issued another 30-day pause just days later, but Ford said Ontario “will not relent” until the threat of tariffs is gone for good.

3. Trump administration cuts the climate change ‘crap’

There was a lot of news from the White House yesterday that relates to climate and the energy transition. Here’s a quick rundown:

The EPA cancelled hundreds of environmental justice grants: EPA Administrator Lee Zeldin and Elon Musk’s so-called Department of Government Efficiency nixed 400 grants across environmental justice programs and diversity, equity, and inclusion programs worth $1.7 billion. Zeldin said this round of cuts “was our biggest yet.”

Transportation Secretary Sean Duffy rescinded Biden memos about infrastructure projects: The two memos encouraged states to prioritize climate change resilience in infrastructure projects funded by the Bipartisan Infrastructure Law, and to include under-represented groups when planning projects.

The military ended funding for climate studies: This one technically broke on Friday. The Department of Defense is scrapping its funding for social science research, which covers climate change studies. In a post on X, Defense Secretary Pete Hegseth said DOD “does not do climate change crap. We do training and war fighting.”

Meanwhile, a second nonprofit – the Coalition for Green Capital – filed a lawsuit against Citibank over climate grant money awarded under the Inflation Reduction Act but frozen by Zeldin’s EPA. Climate United filed a similar lawsuit (but targeting the EPA, as well as Citibank) on Saturday.

4. Analysis shows potential impact of gutting EV tax credits, tailpipe emissions rules

A new report from the Princeton ZERO Lab’s REPEAT Project examines the potential consequences of the Trump administration’s plans to kill existing EV tax credits and repeal EPA tailpipe regulations. It finds that, compared to a scenario in which the current policies are kept in place:

• EV sales would drop by about 30% in 2027 and 40% in 2030.
• More than 8 million fewer EVs and plug-in hybrids would be on the roads in 2030.
• The share of EVs in new light-duty vehicle sales would drop from 40% to 24% in 2030.
• All of the planned EV manufacturing expansion projects in the U.S. would be at risk of cancellation; half of existing assembly capacity would be at risk.
• Up to 72% of battery cell manufacturing capacity currently operating or expected to come online by the end of 2025 would also be at risk of closure.

“In other words, killing the IRA tax credits for EVs will decimate the nascent renaissance in vehicle and battery manufacturing investment and employment we’re currently seeing play out across the United States,” said Jesse Jenkins, an assistant professor and expert in energy systems engineering and policy at Princeton University and head of the REPEAT Project. (Jenkins is also the co-host of Heatmap’s Shift Key podcast.)

REPEAT Project

5. U.S. solar capacity broke records in 2024

The U.S. installed nearly 50 gigawatts of new solar power capacity last year, up 21% from 2023, according to a new report from the Solar Energy Industries Association (SEIA) and Wood Mackenzie. That’s a record, and the largest annual grid capacity increase from any energy technology in the U.S. in more than 20 years. Combined with storage, solar represents 84% of all new grid capacity added in 2024.

SEIA and Wood Mackenzie

Last year was “the year of materialization of the IRA,” with supply chains becoming more resilient and interest from utilities and corporate buyers growing. Installations are expected to remain steady this year, with little growth, because of policy uncertainty. Total U.S. solar capacity is expected to reach 739 GW by 2035, but this depends on policy. The worst case scenario shows a 130 GW decline in deployment through 2035, which would represent $250 billion in lost investments.

“Last year’s record-level of installations was aided by several solar policies and credits within the Inflation Reduction Act that helped drive interest in the solar market,” said Sylvia Levya Martinez, a principal analyst of North America utility-scale solar for Wood Mackenzie. “We still have many challenges ahead, including unprecedented load growth on the power grid. If many of these policies were eliminated or significantly altered, it would be very detrimental to the industry’s continued growth.”

THE KICKER

Tesla shares plunged yesterday by 15%, marking the company’s worst day on the market since 2020 and erasing its post-election stock bump.