This article is exclusively
for Heatmap Plus subscribers.
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
Sign In or Create an Account.
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Welcome to Heatmap
Thank you for registering with Heatmap. Climate change is one of the greatest challenges of our lives, a force reshaping our economy, our politics, and our culture. We hope to be your trusted, friendly, and insightful guide to that transformation. Please enjoy your free articles. You can check your profile here .
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Subscribe to get unlimited Access
Hey, you are out of free articles but you are only a few clicks away from full access. Subscribe below and take advantage of our introductory offer.
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Create Your Account
Please Enter Your Password
Forgot your password?
Please enter the email address you use for your account so we can send you a link to reset your password:
A conversation with Scott Strazik about NIMBYs, the Inflation Reduction Act, and manufacturing problems.
Last week at Greentown Labs’ startup summit in Boston I interviewed Scott Strazik, CEO of GE Vernova, the energy equipment manufacturing arm of General Electric formerly known as GE Renewables and GE Power.
GE Vernova has been at the forefront of a tech and public relations crisis in the offshore wind sector after one of the blades it constructed for the Vineyard Wind farm collapsed into the Atlantic Ocean. Last week, the company reported it found more issues with blades and recorded $700 million in financial losses from offshore wind contracts largely tied to blade issues.
So naturally, I asked him about this – and NIMBYs, and the Inflation Reduction Act, and also about what gives him hope for the future. This interview has been edited for length and clarity.
These days there’s a lot of folks out there who a few years ago were more optimistic than they are today given all kinds of industry trends, policy trends … how would you characterize the pace of the transition right now? Is it speeding up or slowing down?
I actually go into the room today more optimistic than I would’ve been two years ago. I think at the end of the day what we need to think about is, in the electric power system, we need growth to be able to innovate. We’re about to get the most growth that we’ve had – the most load growth in the U.S. – in multiple decades. That actually is an opportunity for us to transform how things work. It’s a lot harder to do that in a flat demand environment, and for the first time in a long time we don’t have that anymore.
So I find it quite interesting when you have conversations about oh my gosh, the hyperscalers need a ton of electricity for data centers, what is this going to do to the energy transition? Hyperscalers, as an example, are amazing customers who care immensely about sustainability. They do need electrons tomorrow but those are electrons they’re committed to decarbonizing over time. So I like our chances now more than I would’ve two years ago.
How has your experience in wind informed your approach to emerging technologies generally?
Well I think in a lot of these cases, this is an all-of-the-above energy technology opportunity for us. We’re going to need a lot of different technologies to solve our challenges and then the real question becomes how do we develop products that can industrialize at scale. And that is really at the heart of the challenge for the wind industry today.
The reality is there’s an incredible amount of innovation with wind. A lot of accelerated larger products. And as they got larger and larger, they got harder and harder to make, and the harder and harder they are to make, the bigger the industry’s quality challenges. And at the end of the day, if we produce products that ultimately don’t work, it doesn’t electrify and decarbonize the world.
When I think about what we do in places like [a startup summit], the technology is the start but it’s also simultaneously saying, is this something we can make at scale?
Do you think we’re not going to be able to manufacture wind at scale?
No, I think we’re definitely going to be able to do it. But I think the industry has gone through such an incredible amount of growth fairly quickly with different product variants that the industry struggled in that regard. The availability of the global install base of wind turbines from an industry perspective has gone down as the growth has gone up. And that’s a bad equation. We need the availability of the product to be working at the same static pace as we plan more and more wind turbines. Do I think we can do that? I think we can. But something I reference a lot is the risk of developing products and businesses on PowerPoint economics versus actual engineering and manufacturing discipline to make sure we can do things right the first time.
I write a newsletter for Heatmap about conflicts in the energy transition – local, state, federal – and I’ve covered conflicts over wind projects, solar projects, battery storage. A trend I’ve seen, especially within first-moving space, is one involving opposition. Because people aren’t familiar with these technologies, it’s easier to scaremonger or get people opposed. I’m wondering, how do you think companies like yourself are doing at handling community engagement and communities’ reception to emerging technologies?
I think what’s critical here is that we all are a catalyst to a conversation. I think the challenge we have sometimes with the energy transition is we actually let the conversation go on for too long.
I actually think the debate is crucial. The debate within communities where there are trades being made – for example, for space or resources — are critical. But the adult conversation is how we converge. Ultimately you need to govern those conversations, make decisions, and go. And today I don’t know if that adult conversation happens fast enough.
For anyone here involved in deployment, are we in a place where people aren’t willing to go? I know at least in some parts of this country, that’s certainly the case. I write about NIMBYs all the time.
Well I think – and again, we need people to be heard, we need communities to be heard – projects do take longer to get done today. That’s a dynamic when you think about industrializing products at scale, a lot of products within the electric power system need to be connected to the zero-carbon power sources that we’re creating. That connection does require new transmission lines to get the electrons to where they’re ultimately needed. That is a long, drawn-out process today in the U.S. It’s longer in our U.S. markets than it is in Europe, it’s longer than it is in Asia. That doesn’t mean the conversation shouldn’t happen, because if a transmission line goes through a community that ultimately isn’t benefiting from that transmission line, we’ve got to solve that problem. But the country needs the transmission lines, because without it we’re not going to decarbonize the electric power system.
In my mind this is less about whether we’re having the debates. It’s more about how do we have them quicker and then make decisions and go.
Given the timetables for developing a transmission line or developing a wind farm, those can be decadal timetables. Next year we’re looking at Congress potentially writing a new tax bill. How bankable is the Inflation Reduction Act in a decadal investment landscape?
Two thoughts on that.
First, it can’t take decades to build a transmission line or a wind farm. I can tell you, as one of the biggest players in the space, it sure as heck doesn’t take that long to physically build them. It takes that long because the conversation takes too long before we push go. That’s the challenge. We can do this much quicker, we just have to do it.
Now, on the Inflation Reduction Act – and there are many elements of the Inflation Reduction Act – I’m certain that with the next administration, regardless of who is in it, they’ll scrutinize all the decisions the last administration made. That’s the beauty of our government. All that said, when it comes to most elements of the Inflation Reduction Act that are tied to creating jobs, manufacturing growth, U.S. competitiveness, energy security – it’s becoming very, very clear that building out and really transforming the electric power system in the U.S. supports all of those priorities. Those are things that both sides of the aisle support.
When I look at the things we’re investing in — and we’re investing heavily into expanding U.S. factories to grow the wind industry, to grow further into serving the transmission and switchgear market — we’re not hesitating one bit because of the bankability risk of our democracy. We think both sides of the aisle are going to support things that are aligned with competitiveness, innovation, jobs, and U.S. national security. And that’s what we’re investing in every day.
So, what gives you hope? You’re certainly brimming with it.
We’re in this every day. We added 29 gigawatts of new power globally last year. Forty-four percent of it was in developing countries. That new 29 gigawatts of power we added to the grid was about 25% cleaner than what the grid is in totality and we see a very clear pathway to add a lot more gigawatts every year, and for it to be even cleaner than what we delivered this year or last year. We know how to do this.
I come into rooms like this and listen to the last 20 minutes of [startup] presentations and I say to myself, okay, we’ve got a lot of young companies that are working on really important stuff. Do they know exactly how to industrialize their product yet at the level that it can make an impact? Maybe not. Do they have the customer reach they’re going to need to accelerate the commercial momentum? Probably not in all cases. Guess what: Those are things Vernova can help with. That’s why we like hanging out in a room like this. There’s a lot of companies that operate in this building every day in which that art of the possible is exciting. There’s a lot of other buildings in the country, in the world, where it’s hard to not have a kick in our step. So this is there for the taking.
I’d rather go at it with that mindset than with the alternative because if I go at it with the alternative, I’ll definitely let down my kids. I’ve got a 12 and 10 year old. They already believe that this is their generation’s greatest challenge. So are we going to take it on with optimism and go after it, or the alternative? And I do think that’s an important point I want to hit on is, something I shared with my broad leadership team: I do think at times, as it relates to energy innovation with climate change and the energy transition, we can lean into conversations with pessimism. And I don’t think that helps our industry.
If I do a compare-contrast with the tech industry on the West Coast, where I’m spending a lot more time now, they’re a lot more optimistic about things they have no idea how to actually make a reality. But the optimism is there. And that optimism can sometimes be half the battle. So are we going to scare everybody? Or are we going to frame up what we know how to do, be honest about what we don’t know how to do, and go after it?
I’ll tell you, any time an oil rig fails, no one is having a conversation about the technology. Is this a public perception problem and a media problem with trade-off denial? Is there some sort of double standard going on in the energy transition space versus fossil fuel space?
I don’t think that is the case. I think we want to hold to the standard the media and the communities are expecting of us. There [are] no trade-offs for safety and quality. And when things don’t work, whether it be a solar farm, a wind turbine, a transformer goes down, I’m not crying in my beer over those communities pushing on whether the industry is good enough.
I think a similar thing happens in the fossil fuel industry when things don’t work, but I don’t want a different bar. I don’t think this is about having a different set of expectations for what we need to deliver. We talk every day about the fact that if this industry is going to thrive, it needs to start every single day with safety and quality at the forefront of what we do. Delivery comes next and that’s where I talk about industrializing things at scale. We don’t really have time for hobbies. These things need to be built at scale. And then the economics need to ultimately work because if the economics don’t work and we push this price to everyone with just exponentially higher electricity prices, that’s not going to work either.
But you can’t start with the economics. You can’t start with whether you can make it at scale. First it has to be safe and it has to be high quality. And I actually think communities, the media, investors holding that bar to every element of the renewables industry is a step in the right direction.
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
And more of the week’s top conflicts around renewable energy
1. Worcester County, Massachusetts – The town of Oakham is piping mad about battery energy storage.
2. Worcester County, Maryland – A different drama is going down in a different Worcester County on Maryland’s eastern shore, where fishing communities are rejecting financial compensation from U.S. Wind tied to MarWin, its offshore project.
3. Lackawanna County, Pennsylvania – A Pivot Energy solar project is moving ahead with getting its conditional use permit in the small town of Ransom, but is dealing with considerable consternation from residents next door.
4. Cumberland County, North Carolina – It’s hard out here for a 5-megawatt solar project, apparently.
5. Barren County, Kentucky – Remember the Geenex solar project getting in the fight with a National Park? The county now formally has a restrictive ordinance on solar… that will allow projects to move through permitting.
6. Stark County, Ohio – Stark Solar is no more, thanks to the Ohio Public Siting Board.
7. Cheboygan County, Michigan – A large EDP Renewables solar project called the Northern Waters Solar Park is entering the community relations phase and – stop me if you’ve heard this before – it’s getting grumbles from locals.
8. Adams County, Illinois – A Summit Ridge Energy solar project located near the proposal in the town of Ursa we’ve been covering is moving forward without needing to pay the city taxes, due to the project being just outside city limits.
9. Cottonwood County, Minnesota – National Grid Renewables has paused work on the Plum Creek wind farm despite having received key permits to build, a sign that economic headwinds may be more powerful than your average NIMBY these days.
10. Oklahoma County, Oklahoma – Turns out you can’t kill wind in Oklahoma that easily.
11. Washoe County, Nevada – Trump’s Bureau of Land Management has opened another solar project in the desert up for public comment.
12. Shasta County, California – The California Energy Commission this week held a public hearing on the ConnectGen Fountain Wind project, which we previously told you already has gotten a negative reaction from the panel’s staff.
A conversation with Heather Cooper, a tax attorney at McDermott Will & Emery, about the construction rules in the tax bill.
This week I had the privilege of speaking with Heather Cooper, a tax attorney at McDermott Will & Emery who is consulting with renewables developers on how to handle the likelihood of an Inflation Reduction Act repeal in Congress. As you are probably well aware, the legislation that passed the House earlier this week would all but demolish the IRA’s electricity investment and production tax credits that have supercharged solar and wind development in the U.S., including a sharp cut-off for qualifying that requires beginning construction by a date shortly after the bill’s enactment.
I wanted to talk to Heather about whether there was any way for developers to creatively move forward and qualify for the construction aspect of the credits’ design. Here’s an abridged version of our conversation, which happened shortly after the legislation passed the House Thursday morning.
How would this repeal affect projects that are already in the pipeline?
Projects in the pipeline are likely going to be safe harbored or grandfathered from these repeals, assuming they’ve gone far enough into their development to meet certain tax rules.
For projects that are less far along in the pipeline and haven’t had any outlays or expenditures yet, those developers right now are scrambling and I’ve gotten probably about 100 emails from my clients today asking me questions about what they can do to establish construction has begun on their project.
If they don’t satisfy those construction rules under the tax bill, they will be completely ineligible for the energy generating credits — the investment tax credit and production tax credit. A pretty significant impact.
What are the questions your clients are asking you?
I’m being asked how these credits are being repealed, if there’s any grandfathering, and how it’s impacting transferability. Also, they’re asking if these rules are tied to construction or placing in service or tax years generally. But also, it seems like people are asking what folks need to do to technically begin construction.
How much will this repeal affect fights between developers and opposition? I spoke to an attorney who told me this repeal could empower NIMBYs, for example.
I don’t know if it empowers them as much as NIMBYs will have less to worry about. If these projects are no longer economical, if these are no longer efficient to build, then the projects just won’t get built. NIMBYs and opponents will be happy.
I don’t think anything about the particular structure of the repeal, though, is empowering opponents. It is what it is.
Like, you can begin construction by entering into procurement contracts for equipment to build your facility so if you’re building a project you can enter into a contract today to get modules, warehouse those modules, and then use those modules to cause one or more projects as having begun construction based on when they were purchased.
If a developer today is able to enter into those contracts, that’ll be outside the scope of anything an opponent would have anything to do with.
Are we expecting people to make decisions before the Senate has acted on this bill or are people in a holding pattern?
When the election happened in November I had increased interest in clients who were concerned about a worst-case scenario like this, that credits would be repealed at or around the time of enactment. We had clients betting not that this would happen but [there was still] a 1% chance or a 5% chance. And folks asked then, how do we re-up thinking about how to begin construction on projects as a precautionary measure.
A lot of my clients were thinking about the worst case scenario beforehand. This is probably just escalating their thinking.
I don’t think people have a lot of time to think about what to do, though, given the 60-day cut off after enactment.
What is the silver lining here? Is there any? If I were to talk to a developer right now, is there an on the bright side here?
The short answer is no. Maybe it makes power projects a lot more expensive and American energy a lot more expensive and therefore those building power projects can make more money from their existing projects? That’s whether they’re renewable or otherwise. Other than higher power costs – for consumers, regular old taxpayers – there’s not really a bright side.
So, what you’re saying is, you don’t have any good news?
The good news is the Senate is still out there and needs to review this. There are a few senators who’ve expressed strong support of these credits – I’m not super optimistic, but four senators tend to have a bit more sway than congresspeople do.
How well-organized opposition is killing renewable energy in a state that’s desperate for power
The Commonwealth of Virginia is clamping down on solar farms.
At least 39 counties in Virginia – 41% of all the state’s counties – now have some form of restriction on solar development, according to a new analysis of Heatmap Pro data. Many of these counties adopted ordinances significantly reducing how much land can be used and capping the total acreage of land allowed for solar projects. Some have gone further by banning new solar facilities altogether.
I wanted to get to the bottom of the Virginia dilemma after we collected this data and crunched these numbers because, simply put, it didn’t make a lot of sense.
Historically Virginia, like Texas, has been a relatively favorable state for energy infrastructure. Culturally, it would make sense for people to welcome new forms of energy. The state is an epicenter in the American data center boom, home to about 35% of all hyperscalers in the world – an economic boon that’ll require inordinate amounts of power. One would assume people want that energy to come from cleaner sources!
Yet counties across the state have been rolling up the red carpets. Mecklenburg recently banned new solar projects. Surry limited solar projects to a tenth of the county’s acreage. Buckingham has put a firm limit on development to 7,500 megawatts of solar projects in total. Why?
Well, here’s where I’ve landed: the opposition’s well organized and benefits from a history of conflicts over other forms of development.
Citizens for Responsible Solar – an anti-renewables organization headquartered in Culpepper, Virginia, founded by a former special adviser to President George W. Bush – has been active in the state since at least 2018. Although it is a national organization in name, and does have factions in other states, its website primarily boasts “success stories” in Virginia counties, including Augusta, Culpepper, Fauquier, Gloucester, Henry, Madison, Mecklenburg, and Page counties.
CRS is primarily focused on opposing solar on agricultural lands – a topic we’ve previously covered thoroughly – as well as forested areas. It claims to not be entirely against solar energy but only wants projects on industrial-zoned acreage. But the organization is also well documented to spread misinformation about solar energy itself.
Dr. Faith Harris of Virginia Interfaith Power & Light told me this week that her experience speaking with individuals opposed to renewable energy in the state indicates that falsehoods and conspiracy theories are playing a large role in turning otherwise friendly counties against solar energy. In her view, this has become an even bigger problem since the state turned red with the election of Governor Glenn Youngkin, who this week vetoed a slate of climate bills, including one that would make it easier to permit small solar farms and battery storage facilities.
“We’ve had a lot of misinformation and directions and narratives changed trying to initiate a resurgence of more fossil fuels,” Harris said. “It’s part of the movement to prevent and stop renewable energy.”
There’s something else going on, too, and it’s historically linked to systemic social inequities in some of these counties. They’ve been burned before, Harris noted, over the construction of other forms of industrial energy.
For years, Buckingham County residents resisted the construction of a gas compression station smack dab in the middle of a historically Black neighborhood. I covered this conflict early in my environmental journalism career because it was central to the construction of the now-defunct Atlantic Coast gas pipeline. It was a fight Buckingham won, in no small part due to the support of organizations like Virginia Interfaith Power & Light.
Now, Buckingham has capped solar projects. I asked Harris why a county that was so aggressive in fighting gas power would be against renewable energy, and she bluntly replied that these two fights are “pretty much directly related” – with the added conspiracy factor making matters worse for solar projects. For example, she’s heard complaints from residents in Buckingham about trees that could be cut down for solar, echoing the claims spread by organizations like CRS.
“People in the communities have been challenged and frightened in some way that solar is somehow going to have an impact on them, and not really even recognizing that they’re constantly being exposed to air and water contamination,” she said. “I don’t think the average person understands how they get their energy.”
She added: “This is still an ongoing challenge and in many ways we – the climate movement – have failed to educate the public well enough.”