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A conversation with Jason Clark, former chief strategy officer for American Clean Power
With the election approaching, I wanted to talk to the smartest person I could find to explain how the election could affect the Inflation Reduction Act and ultimately renewable energy development. So I hit up Jason Clark, who was until recently chief strategy officer for American Clean Power during passage of the Inflation Reduction Act and the first years of IRS guidance.
Clark, who has started energy policy consulting firm Power Brief, put together a risk profile for every major IRA program in the event of unified Republican control in Washington. I talked to him about the risk analysis, what programs are most at risk, and whether we should care about oil companies supporting some parts of the law.
Why did you do this?
I spent the last six months traveling the world and during that time, I was blissfully tuned out on politics. Now that I’m back in D.C., and given how consequential this election is going to be – suffice it to say, I’m tuned back in.
I was close to the IRA drafting process – I’m familiar with the underlying bill and also how the government thinks about the programs. I recently started a company, Power Brief, that marries my love for clean energy policy and my old consulting habits: pretty visuals and PowerPoints. And looking at what might happen to the IRA felt like THE big thing happening in the space right now, so I wanted to dive deeper.
A lot of the content has been “will they/won’t they” analysis. How much do Republicans feel strongly about this bill overall? How much passion would Trump have for pushing for a full repeal? It’s been out there. But this is so complicated and has so many moving parts. I wanted to try and capture both the political reality for some of these programs and also the very practical reality of how the government thinks about the cost of these programs. The fact it can all be contained in one visual is to help people who care about climate policy and want to really understand what may happen depending on how the election turns out.
We know Congress is going to take a stab at a new tax bill next year. I’ve written about how the IRA would be targeted in that situation. Can you help our readers understand why these programs would be vulnerable in tax talks?
Classic partisan politics in D.C. By the nature of using reconciliation, the IRA was ultimately purely Democratic-led and that automatically paints it with a certain color. I think that [former] President Trump has been very unshy about criticizing the IRA, and when he doesn’t use the IRA moniker, he uses different monikers thereof. And people are going to be looking for the easiest path [to money to extend the Trump-era tax cuts].
What I don’t think is that it’ll be thrown out entirely. We’ve seen members of the House and Senate express support for parts of it–
Republicans?
Correct. There was a letter from 18 House Republicans to the [House] Speaker [Mike Johnson] saying we shouldn’t just throw this out, we should really look at it. And I think that there’s a lot of people who look at where the investment from the IRA is flowing – a lot of the dollars are going to Republican-controlled states and districts. Yes, that may insulate the whole bill from repeal outright but a lot of that is announced investment but hasn’t turned into steel on the ground and jobs yet.
So your chart singles out EV tax credits as most vulnerable to repeal. Why?
The universe of electric vehicle tax credits is fully at risk. We’ve seen it from Republican voters – constituents! – who feel that EVs are just some type of government mandated, this is some car you have to buy. But it also happens to be very, very expensive. When the Joint Committee on Taxation (JCT} crunches the numbers about what this is going to cost between now and 10 years from now, it’s one of the most expensive portions of the legislation. So when you look at it and ask how much is it going to cost to ax this and give us the most savings in the tax code? You get this.
The IRA didn’t create these credits though. It simply expanded them. You think the entire credit could go away in a Republican trifecta?
I think the entire EV tax credit.
Okay. So next up on the chopping block per your chart is the renewable energy investment tax credit, or ITC. Why?
“Both the ITC and the PTC [production tax credit] when they shift into this new tech neutral paradigm have the same risk profile. For these, I don’t think it’s necessarily going to be a full repeal. I think the data about how much money is going into Republican districts is legitimate, and I think it will materialize. But there’s many spectrums of levers that someone can pull.
The tech neutral credit doesn’t end on a certain calendar year date. It ends when the U.S. sector hits a certain emissions target. The credit continues until that moment in time. One way to make the credit look less expensive on paper is to say, no, we are going to end it at a certain point. Take 2030 or 2032. You could codify a timeline on it, so the JCT won’t score the out-years on how expensive the credit is going to be. That is one version of it.
Another version of it is that there’s a base credit and then there’s added layers, like wage requirements or low-income area benefits. And that’s another thing you could pull to say, look, we’re not going to do that anymore.
What would be the impact on developers?
I don’t think a lot of folks appreciate just how long range some of this planning is, how long it takes to permit something, how long it takes to figure out the interconnection queue.
Companies aren’t thinking what are we going to build this year – they’re thinking what will be put online in 2035. So if the government changes the stability of that, companies start to pull back and say hey, let’s not go too crazy in the outyears. Baseline? It means fewer clean energy projects come online. The industry has been banking on a certain level of certainty to plan against. Any shockwave against that and some companies are going to look and ask if they have the assurance to move forward with this or not.
Okay well, candidly, to that I say: woof. So okay, your chart labels the PTC and energy efficiency credits as vulnerable. Why are they at risk if they cost less than other programs?
There are going to be certain things where the dollars and cents lose out to the political policy realities. On energy efficiency, it would be easy to make that whole category a continuation over the fight on gas stoves or heat pumps and frame them as tax credits for wealthy people to do expensive stuff on their homes, costing the rest of the country. I don’t think it’s as much of a kitchen table conversation per se but it’s up there. Even if it doesn’t save them that much money, it does face the risk of being that low-hanging fruit.
Well, alrighty then. What about 45X? That’s pretty crucial to many manufacturers out there today.
I think both Democrats and Republicans can stand behind more domestic manufacturing coming to the United States. That’s something that is a bipartisan consensus and reducing that, harming that, will pose a liability for politicians. Now similarly, you could shorten the window and amounts, but at the end of the day, it’s a lot more politically resilient despite being seen as the most expensive part of what was included in the IRA.
You ranked about half of the IRA’s programs – hydrogen, carbon capture, sustainable aviation fuels, and more – as being both low cost and at low risk for repeal. Why?
What they benefit from is a greater resonance with Republican policymakers. Carbon capture and sequestration, sustainable aviation fuels and biofuels, hydrogen – all of these things get more of a shrug with Republicans when you talk to them. And that is why you see major oil and gas groups come out and say, hey, let’s not repeal the whole IRA.
But repealing the programs at risk while keeping these other programs… how would that outcome impact the pace of decarbonization?
Drastically. It would effectively remove the economic premise for all future renewable energy generation. It gets rid of a key driver of the shift toward electric vehicles. I think if you repealed everything in the red, then I think what you’ve done is you’ve gotten rid of all the reasons capital is pouring money into renewable energy projects and storage right now. In that scenario you’d see a drastic slowdown in climate ambitions in the electric power sector and also the EV transition that’s been happening.
So… the oil companies telling Trump to keep some of the IRA is a cold comfort, then?
Knowing it doesn’t go away fully is a cold comfort looking at this risk analysis.
What did this exercise teach you about the IRA?
I think that a lot of the net benefit of the decarbonization that translates to jobs and economic development is really, really close, and a lot of what is in the IRA would be lower risk if more of that had been pushed through faster. I think implementation and the natural barriers of the lack of transmission, siting and permitting challenges… There's a confluence of things that make it hard to quickly double the size of the sector but a lot of stuff is coming. But there’s capital behind it, plans behind it, and I think they’re going to build a lot more. As they do that, the sentiment is going to change behind it, but we have to get to that promised land first.
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A review of Heatmap Pro data reveals a troubling new trend in data center development.
Data centers are being built in places that restrict renewable energy. There are significant implications for our future energy grid – but it’s unclear if this behavior will lead to tech companies eschewing renewables or finding novel ways to still meet their clean energy commitments.
In the previous edition of The Fight, I began chronicling the data center boom and a nascent backlash to it by talking about Google and what would’ve been its second data center in southern Indianapolis, if the city had not rejected it last Monday. As I learned about Google’s practices in Indiana, I focused on the company’s first project – a $2 billion facility in Fort Wayne, because it is being built in a county where officials have instituted a cumbersome restrictive ordinance on large-scale solar energy. The county commission recently voted to make the ordinance more restrictive, unanimously agreeing to institute a 1,000-foot setback to take effect in early November, pending final approval from the county’s planning commission.
As it turns out, the Fort Wayne data center is not an exception: Approximately 44% of all data centers proposed in Indiana are in counties that have restricted or banned new renewable energy projects. This is according to a review of Heatmap Pro data in which we cross-referenced the county bans and ordinances we track against a list of proposed data centers prepared by an Indiana energy advocacy group, Citizens Action Coalition of Indiana.
This doesn’t necessarily mean the power going to these data centers is consistently fossil. Data centers can take years to construct and often rely on power fed to them from a distributed regional energy grid. But this does mean it would be exceptionally costly for any of these projects to build renewable generation on site, as a rising number of projects choose to do – not to mention that on a macro level, data centers may increasingly run up against the same cultural dynamics that are leading to solar and wind project denials. (See: this local news article about the Fort Wayne data center campus).
Chrissy Moy, a Google spokesperson, told me the Fort Wayne facility will get its power off of the PJM grid, and sent me links to solar projects and hydroelectric facilities in other states on the PJM it has power purchase agreements with. I’d note the company claims it “already matches” all of its global annual electricity demand with “renewable energy purchases.” What this means is that if Google can’t generate renewable energy for a data center directly, it will try to procure renewable energy at the same time from the same grid, even if it can’t literally use that clean power at that data center. And if that's not possible, it will search farther afield or at different times. (Google is one of the more aggressive big tech companies in this regard, as my colleague Emily Pontecorvo details.) Google has also boasted that it will provide an undisclosed amount of excess clean electricity through rights transfers to Indiana Michigan Power when the tech company’s load is low and demand on the broader grid is peaking, as part of Google’s broader commitment to grid flexibility.
I reached out to Tom Wilson, an energy systems technical executive at the Electric Power Research Institute, an industry-focused organization that studies modern power and works with tech companies on flexible data center energy use, including Google. Wilson told me that in Indiana, many of the siting decisions for data centers were made before counties enacted moratoria against renewable energy and that tech companies may not always be knowingly siting projects in places where significant solar or wind generation would be impractical or even impossible. (We would just note that Fort Wayne, Indiana, has an opposition risk score of 84 in Heatmap Pro, meaning it would have been a very risky place to build a renewable energy project even without that restrictive ordinance.) It also indicates some areas may be laying down renewables restrictions after seeing data center development, which is in line with a potential land use techlash.
Wilson told me that two thirds of data centers rely on power from the existing energy grid whereas surveys indicate about a third choose to have at least some electricity generation on site. In at least the latter case, land use constraints and permitting problems really can be a hurdle for building renewable energy close to where data is processed. This is a problem exacerbated when centers are developed near population centers, which Wilson said is frequently the case because companies want to reduce “latency” for customers. In other words, they want to “reduce the time it takes to get answers to people” via artificial intelligence or other data products.
“The primary challenges are the size of the data center and the amount of space it takes to build renewables,” he said. “They are moving from 20 megawatt or 40 megawatt data centers to 100, 200, 300 megawatt data centers. It’s really hard to locate that much renewable [energy] right near a population center. So that requires transmission, and unfortunately right now in the U.S. and in many other countries, transmission takes a significant amount of time to build.”
The majority of data centers are served by regional power grids, Wilson told me. Companies like Google, Meta, and others continue to invest in renewable energy procurement while building facilities in areas that have restricted new solar or wind power infrastructure. In some cases, companies may feel they’re forced to seek these places out because the land is just plain cheap and has existing fiber optic cable networks.
At the same time, there are large data centers getting energy generated on site, and how they each approach their energy sources varies. It’s also not always consistent.
For instance, Meta’s new Prometheus supercluster complex in New Albany, Ohio — potentially the world’s first 1 gigawatt data center — will reportedly have a significant amount of new gas power generation constructed at the facility, even though the company also struck a deal with Invenergy over the summer to procure at least 400 megawatts of solar from two projects in Ohio that already have their permits. One is in Clinton County and was fully permitted but resulted in a years-long fight before the Ohio Power Siting Board and included conservative media backlash. The other is in Franklin County and got its permits in 2021, before a recent wave of opposition against solar projects. Prometheus itself will be sited on the Licking County side of New Albany, where solar has been extremely difficult to build, even though most of this Columbus suburb is in solar-supporting Franklin.
Meanwhile, Elon Musk’s xAI data center notoriously relies on a polluting gas plant in Memphis, Tennessee. The surrounding Shelby County had a solar moratorium until mere months ago that residents want to bring back. An affiliate company of xAI used for the project’s real estate is subleasing land near the data center for a solar farm, but it is unclear right now if it’ll power the data center.
In the end, it really does seem like data centers are being sited in places with renewable energy restrictions. What the data center developers plan to do about it — if anything — is still an open question.
And more on the week’s most important fights around renewable energy projects.
1. Ocean County, New Jersey – A Trump administration official said in a legal filing that the government is preparing to conduct a rulemaking that could restrict future offshore wind development and codify a view that could tie the hands of future presidential administrations.
2. Prince William County, Virginia – The large liberal city of Manassas rejected a battery project over fire fears, indicating that post-Moss Landing, anxieties continue to pervade in communities across the country.
3. Oklahoma County, Oklahoma – The Sooner state legislature on Monday held a joint committee meeting on solar and wind setbacks featuring prominent anti-wind advocates.
4. Tippacanoe County, Indiana – The developers of a large-scale solar project are suing the county over being rejected.
5. Dane County, Wisconsin – The Wisconsin Public Service Commission approved Invenergy’s Badger Hollow wind project – the state’s first new fully-permitted wind energy project in more than a decade.
A conversation with Courtney Brady of Evergreen Action.
This week I chatted with Courtney Brady, Midwest region deputy director for climate advocacy group Evergreen Action. Brady recently helped put together a report on rural support for renewables development, for which Evergreen Action partnered with the Private Property Rights Institute, a right-leaning advocacy group. Together, these two organizations conducted a series of interviews with self-identifying conservatives in Pennsylvania and Michigan focused on how and why GOP-leaning communities may be hesitant, reluctant, or outright hostile to solar or wind power.
What they found, Brady told me, was that politics mattered a lot less than an individual’s information diet. The conversation was incredibly informative, so I felt like it was worth sharing with all of you.
The following chat was edited lightly for clarity. Let’s dive in:
Okay, so tell me first why you did this report.
Clean energy deployment is getting increasingly challenging for a variety of reasons. What’s happening on the federal level is one thing, but something we don’t talk about much in the climate movement is what’s happening locally, what actually determines the odds of a project being successful and incorporated into the grid.
The side of the story we often hear that’s the loudest is from people at the local level who are opposed to these projects, and it limits our ability to understand the nuances. It’s not always that everyone opposes these projects in their community — that’s often not the case. We talked to several farmers in this report who are using these projects as a lifeline to keep farms in their families’ hands, generate income, preserve their farms. These projects can provide an income lifeline for these farms.
Something we tried to accomplish with this report was to understand the different perspectives, what was driving them. The only way we could do that was by going out and talking to these people in their own communities, on their own land.
The group we worked with has a very conservative background. They work on Republican campaigns. They’re very involved in local government relations. And they were the ones who were able to go out and interview these folks about what this means for their communities.
A few weeks ago, I interviewed the head of the League of Conservation Voters about the way that renewables are perceived as culturally left wing. Are there any takeaways in your research about how to deal with that?
You know, I expected to hear a little bit more of that political ideological leanings than what we actually got in these interviews. Our partners went out and interviewed seven folks; four of the case studies were in Pennsylvania, and three of them were in Michigan. It was a mix of local government officials and landowners themselves, most of whom were farmers. And they asked them, What are you hearing in your community? Where’s the opposition coming from?
I’d assumed this would be a left-versus-right, red-versus-blue issue, but this is not what we heard. We heard a lot about a lack of information or misinformation in these communities and the crucial incomes these projects can provide to landowners themselves. Again, everyone in this report that was interviewed identified as a conservative or said they were Trump supporters. It’s interesting to hear that hasn’t impacted their views of clean energy at large. They were either really happy with the projects they’d sited or still trying to get projects sited years and years later.
When you talked about misinformation, what came up?
The sizing of these leases. We heard about fears in communities that land was going to be completely overtaken over by solar or wind.
Some of these farmers said one of the biggest things they heard from their neighbors was that we’re giving away hundreds and thousands of acres to solar projects and wind projects and taking away land that should go towards crops and food. We’re hearing from these farmers that a lot of this land is no longer fertile, so providing a temporary solar lease allows that farmer to continue generating revenue while letting that land breathe.
People really had this fear of farmland being completely converted to energy production. I don’t know where a lot of that came from. We asked if that was something spread on the internet and we heard, Neighbors talk and there are Facebook groups. So there’s this overblown fear about the size of projects.
When it comes to these interviews, it does seem like you spoke to a lot of people who believe what you say. But did you speak to people who don’t believe this stuff? Because right now we’re seeing cases where opposition is either winning over county commissioners or voting out of office local officials who believe exactly what you heard from some folks.
We’ve heard so much of the opposition. It’s trending, really growing across the country. And understanding the root of why opposition is there is important. But so often we don’t hear the other side of it, these really nuanced perspectives.
There are these folks in the middle who are really thematic in these interviews — this is not about energy but a core American property rights issue. That resonates with people regardless of party.
The other piece is, there’s fear in communities of being the person to speak out against groups that are loud, the ones who want to kick people out of office over energy things. So it was really important to elevate these voices and in the interviews just made a lot of common sense. This was about elevating voices that don’t always get a seat at the table in discussions around these issues.