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A year and a half ago, President Biden signed the Inflation Reduction Act, the biggest climate law in American history — and arguably in world history. The law will spend an estimated $500 billion in grants and tax credits to incentivize people and businesses to switch from burning fossil fuels to using cleaner, zero-carbon technologies.
That’s the goal, at least. But is the IRA actually working? Now, 18 months after its passage, we’re starting to be able to answer that question. A new report from a coalition of major energy analysts — including MIT, the Rhodium Group, and our cohost Jesse Jenkins’ lab at Princeton — looks at data from the power and transportation sectors and concludes that yes, the law is starting to decarbonize the American economy.
But it isn’t working in the way many people might expect, because while electric vehicles are on track to meet the IRA’s climate goals, the power sector is not.
That’s the opposite of what you might think from reading the popular press, which has bemoaned an alleged slowdown in new EV sales. But the new report finds that the transportation sector actually came in at the upper end of what modelers expected to see this year. About 9.2% of new cars sold last year in the United States were zero-emissions vehicles; after the IRA passed, modelers had expected EVs to come in anywhere from 8.1 to 9.4% of sales.
But the power sector is lagging behind what modelers had expected to see. While the three groups had projected that 46 to 79 gigawatts of new zero-carbon power would come online last year, only 32.3 gigawatts of new capacity actually did. That is primarily due to a drop in new onshore wind projects, which fell below the installation levels achieved in 2020 and 2021. While solar and batteries continued to go gangbusters, exceeding previous records, they could not make up for the drop in wind. That means that the power sector is not on track to cut emissions 40% by 2030, as compared to 2005 levels, as the bill’s supporters have hoped.
Jesse Jenkins, an energy systems expert and professor at Princeton University, and I dive into the details on the latest episode of Shift Key.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, or wherever you get your podcasts.
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Here is an excerpt from our conversation:
Robinson Meyer: First, let's do the moment of truth. Let’s just first get into the data. So in the power sector, what do we see?
Jesse Jenkins: What we see in the electricity sector is a new record set for zero carbon electricity generation and storage capacity additions. So that's new power plant and battery storage construction.
In aggregate, we saw over 32,000 megawatts or 32 gigawatts of new zero carbon generation and storage added to the U.S. grid in 2023. That's about a 32% increase from the rate in 2022. And it edges out a previous record that we saw in 2021 of about 31.6 gigawatts. So good news is we're setting new record growth rates in total in terms of wind and solar and battery additions.
Unfortunately, that does fall on the lower end of what we were projecting in most of the modeling results. We were looking for, on average, about 46 to 79 gigawatts, so call it 40 to 80 gigawatts on average of additions in 2023 and 2024. We fell short of the low end of that range at 32.3 gigawatts. So unless the pace accelerates substantially in 2024, we're probably going to fall a bit behind schedule in terms of capacity additions.
Meyer: And do we have a sense of what's driving that? Because I think that's a very surprising finding, that we're behind schedule in the power sector, where I think people feel pretty good generally about the pace of decarbonization. Or I think where the common wisdom, at least, is that the pace of decarbonization is like proceeding apace. What's driving this underperformance of the model?
Jenkins: So it's really the difference between solar and wind additions.
The solar sector added about 18.4 gigawatts of capacity in 2023. That's up massively from just about 11 gigawatts in 2022. It's about double what we had seen in 2020, which was kind of our reference when we were doing our modeling as we started the REPEAT project in 2021. And so that's looking encouraging and in fact is running ahead of schedule with the average pace of additions that we saw in REPEAT project results.
Batteries are growing way faster than we expected.
And that helps really make the most of those solar capacity additions because solar and batteries are kind of like peanut butter and jelly, they go together quite well. And that's because solar has this nice, regular daily fluctuation, right? From the sun rising and setting. And that pairs really well with batteries, which today in a way lithium ion batteries are best suited for, you know, only a few hours of storage. So they'll charge for three or four hours in the middle of the day when we've got an abundance of sun. And then they'll discharge in the evening to help meet the evening peak of demand when everybody's coming home from work.
The batteries basically helped shift the solar output from the middle of the day to hit that evening peak. And that's, that's really helpful. Where things are running behind schedule is really in the wind sector, where we only built about half of the peak rate, actually less than half that we've seen historically in 2023. Additions of wind power in 2023 were only about 6.3 gigawatts, and that's down from nearly 15 gigawatts in each of 2020 and 2021.
So that's a step backwards at a time when we should be smashing new record growth rates across all of these sectors. And that's giving me the biggest concern as we look at in the next couple of years.
Meyer: And that's, I mean, last show we talked about offshore wind and the troubles in offshore wind and how it seems like some big offshore wind projects that we thought might be coming online in the middle of this decade might not be coming online till the end of the decade. But when we talk about wind underperforming in terms of the whole country over the past year, we're really still talking about onshore wind. This is like big turbines in the middle of the Great Plains, not big turbines off the coast of New York, New Jersey, right?
Jenkins: That's right. Yeah, I think I don't think we had any significant offshore wind capacity additions coming in 2024. You know, most of that we were expecting would come in between 2026 and 2030 or 2035. So this is really a story about onshore wind, where if we look at the economics of onshore wind across the country, there's a tremendous number of sites that look very economic given the incentives provided by the Inflation Reduction Act.
And unfortunately, we're just not building out at the pace that would be economically justified. And that is really an indicator that there are a substantial number of other non-economic frictions or barriers to deployment of wind in particular at the pace that we want to see.
The full transcript is here.
This episode of Shift Key is sponsored by Advanced Energy United, KORE Power, and Yale …
Advanced Energy United educates, engages, and advocates for policies that allow our member companies to compete to power our economy with 100% clean energy, working with decision makers and energy market regulators to achieve this goal. Together, we are united in our mission to accelerate the transition to 100% clean energy in America. Learn more at advancedenergyunited.org/heatmap
KORE Power provides the commercial, industrial, and utility markets with functional solutions that advance the clean energy transition worldwide. KORE Power's technology and manufacturing capabilities provide direct access to next generation battery cells, energy storage systems that scale to grid+, EV power & infrastructure, and intuitive asset management to unlock energy strategies across a myriad of applications. Explore more at korepower.com — the future of clean energy is here.
Build your skills in policy, finance, and clean technology at Yale. Yale’s Financing and Deploying Clean Energy certificate program is a 10-month online certificate program that trains and connects clean energy professionals to catalyze an equitable transition to a clean economy. Connect with Yale’s expertise, grow your professional network, and deepen your impact. Learn more at cbey.yale.edu/certificate.
Music for Shift Key is by Adam Kromelow.
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Deep Fission says that building small reactors underground is both safer and cheaper. Others have their doubts.
In 1981, two years after the accident at Three Mile Island sent fears over the potential risks of atomic energy skyrocketing, Westinghouse looked into what it would take to build a reactor 2,100 feet underground, insulating its radioactive material in an envelope of dirt. The United States’ leading reactor developer wasn’t responsible for the plant that partially melted down in Pennsylvania, but the company was grappling with new regulations that came as a result of the incident. The concept went nowhere.
More than a decade later, the esteemed nuclear physicist Edward Teller resurfaced the idea in a 1995 paper that once again attracted little actual interest from the industry — that is, until 2006, when Lowell Wood, a physicist at the Lawrence Livermore National Laboratory, proposed building an underground reactor to Bill Gates, who considered but ultimately abandoned the design at his nuclear startup, TerraPower.
Now, at last, one company is working to make buried reactors a reality.
Deep Fission proposes digging boreholes 30 inches in diameter and about a mile deep to house each of its 15-megawatt reactors. And it’s making progress. In August, the Department of Energy selected Deep Fission as one of the 10 companies enrolled in the agency’s new reactor pilot program, meant to help next-generation startups split their first atoms by July. In September, the company announced a $30 million reverse merger deal with a blank check firm to make its stock market debut on the lesser-known exchange OTCQB. Last month, Deep Fission chose an industrial park in a rural stretch of southeastern Kansas as the site of its first power plant.
Based in Berkeley, California, the one-time hub of the West Coast’s fading anti-nuclear movement, the company says its design is meant to save money on above-ground infrastructure by letting geology do the work to add “layers of natural containment” to “enhance safety.” By eliminating much of that expensive concrete and steel dome that encases the reactor on the surface, the startup estimates “that our approach removes up to 80% of the construction cost, one of the biggest barriers for nuclear, and enables operation within six months of breaking ground.”
“The primary benefit of placing a reactor a mile deep is cost and speed,” Chloe Frader, Deep Fission’s vice president of strategic affairs, told me. “By using the natural pressure and containment of the Earth, we eliminate the need for the massive, above-ground structures that make traditional nuclear expensive and slow to build.”
“Nuclear power is already the safest energy source in the world. Period,” she said. “Our underground design doesn’t exist because nuclear is unsafe, it exists because we can make something that is already extremely safe even safer, simpler, and more affordable.”
But gaining government recognition, going public, and picking a location for a first power plant may prove the easy part. Convincing others in the industry that its concept is a radical plan to cut construction costs rather than allay the public’s often-outsize fear of a meltdown has turned out to be difficult, to say nothing of what actually building its reactors will entail.
Despite the company’s recent progress, I struggled to find anyone who didn’t have a financial stake in Deep Fission willing to make the case for its buried reactors.
Deep Fission is “solving a problem that doesn't actually exist,” Seth Grae, the chief executive of the nuclear fuel company Lightbridge, told me. In the nearly seven decades since fission started producing commercial electrons on the U.S. grid, no confirmed death has ever come from radiation at a nuclear power station.
“You’re trying to solve a political problem that has literally never hurt anyone in the entire history of our country since this industry started,” he said. “You’re also making your reactors more expensive. In nuclear, as in a lot of other projects, when you build tall or dig deep or lift big and heavy, those steps make the projects much more expensive.”
Frader told me that subterranean rock structures would serve “as natural containment, which also enhances safety.” That’s true to some extent. Making use of existing formations “could simplify surface infrastructure and streamline construction,” Leslie Dewan, a nuclear engineer who previously led a next-generation small modular reactor startup, told IEEE Spectrum.
If everything pans out, that could justify Deep Fission’s estimate that its levelized cost of electricity — not the most dependable metric, but one frequently used by solar and wind advocates — would be between $50 and $70 per megawatt-hour, lower than other SMR developers’ projections. But that’s only if a lot of things go right.
“A design that relies on the surrounding geology for safety and containment needs to demonstrate a deep understanding of subsurface behavior, including the stability of the rock formations, groundwater movement, heat transfer, and long-term site stability,” Dewan said. “There are also operational considerations around monitoring, access, and decommissioning. But none of these are necessarily showstoppers: They’re all areas that can be addressed through rigorous engineering and thoughtful planning.”
As anyone in the geothermal industry can tell you, digging a borehole costs a lot of money. Drilling equipment comes at a high price. Underground geology complicates a route going down one mile straight. And not every hole that’s started ends up panning out, meaning the process must be repeated over and over again.
For Deep Fission, drilling lots of holes is part of the process. Given the size of its reactor, to reach a gigawatt — the output of one of Westinghouse’s flagship AP1000s, the only new type of commercial reactor successfully built from scratch in the U.S. this century — Deep Fission would need to build 67 of its own microreactors. That’s a lot of digging, considering that the diameters of the company’s boreholes are on average nearly three times wider than those drilled for harvesting natural gas or geothermal.
The company isn’t just distinguished by its unique approach. Deep Fission has a sister company, Deep Isolation, that proposes burying spent nuclear fuel in boreholes. In April, the two startups officially partnered in a deal that “enables Deep Fission to offer an end-to-end solution that includes both energy generation and long-term waste management.”
In theory, that combination could offer the company a greater social license among environmental skeptics who take issue with the waste generated from a nuclear plant.
In 1982, Congress passed a landmark law making the federal government responsible for the disposal of all spent fuel and high-level radioactive waste in the country. The plan centered on building a giant repository to permanently entomb the material where it could remain undisturbed for thousands of years. The law designated Yucca Mountain, a rural site in southwestern Nevada near the California border, as the exclusive location for the debut repository.
Construction took years to start. After initial work got underway during the Bush administration, Obama took office and promptly slashed all funding for the effort, which was opposed by then-Senate Majority Leader Harry Reid of Nevada; the nonpartisan Government Accountability Office clocked the move as a purely political decision. Regardless of the motivation, the cancellation threw the U.S. waste disposal strategy into limbo because the law requires the federal government to complete Yucca Mountain before moving on to other potential storage sites. Until that law changes, the U.S. effort to find a permanent solution to nuclear waste remains in limbo, with virtually all the spent fuel accumulated over the years kept in intermediate storage vessels on site at power plants.
Finland finished work on the world’s first such repository in 2024. Sweden and Canada are considering similar facilities. But in the U.S., the industry is moving beyond seeing its spent fuel as waste, as more companies look to start up a recycling industry akin to those in Russia, Japan, and France to reprocess old uranium into new pellets for new reactors. President Donald Trump has backed the effort. The energy still stored in nuclear waste just in this country is sufficient to power the U.S. for more than a century.
Even if Americans want an answer to the nuclear waste problem, there isn’t much evidence to suggest they want to see the material stored near their homes. New Mexico, for example, passed a law barring construction of an intermediate storage site in 2023. Texas attempted to do the same, but the Supreme Court found the state’s legislation to be in violation of the federal jurisdiction over waste.
While Deep Fission’s reactors would be “so far removed from the biosphere” that the company seems to think the NRC will just “hand out licenses and the public won’t worry,” said Nick Touran, a veteran engineer whose consultancy, What Is Nuclear, catalogs reactor designs and documents from the industry’s history, “the assumption that it’ll be easy and cheap to site and license this kind of facility is going to be found to be mistaken,” he told me.
The problem with nuclear power isn’t the technology, Brett Rampal, a nuclear expert at the consultancy Veriten, told me. “Nuclear has not been suffering from a technological issue. The technology works great. People do amazing things with it, from curing cancer to all kinds of almost magical energy production,” he told me. “What we need is business models and deployment models.”
Digging a 30-inch borehole a mile deep would be expensive enough, but Rampal also pointed out that lining those shafts with nuclear-grade steel and equipping them with cables would likely pencil out to a higher price than building an AP1000 — but with one one-hundredth of the power output.
Deep Fission insists that isn’t the case, and that the natural geology “removes the need for complex, costly pressure vessels and large engineered structures” on the surface.
“We still use steel and engineered components where necessary, but the total material requirements are a fraction of those used in a traditional large-scale plant,” Frader said.
Ultimately, burying reactors is about quieting concerns that should be debunked head on, Emmet Penney, a historian of the industry and a senior fellow at the Foundation for American Innovation, a right-leaning think tank that advocates building more reactors in the U.S., told me.
“Investors need to wake up and realize that nuclear is one of the safest power sources on the planet,” Penney said. “Otherwise, goofy companies will continue to snow them with slick slide decks about solving non-issues.”
On energy efficiency rules, Chinese nuclear, and Japan’s first offshore wind
Current conditions: Warm air headed northward up the East Coast is set to collide with cold air headed southward over the Great Lakes and Northeast, bringing snowfall followed by higher temperatures later in the week • A cold front is stirring up a dense fog in northwest India • Unusually frigid Arctic air in Europe is causing temperatures across northwest Africa to plunge to double-digit degrees below seasonal norms, with Algiers at just over 50 degrees Fahrenheit this week.

Oil prices largely fell throughout 2025, capping off December at their lowest level all year. Spot market prices for Brent crude, the leading global benchmark for oil, dropped to $63 per barrel last month. The reason, according to the latest analysis of the full year by the Energy Information Administration, is oversupply in the market. China’s push to fill its storage tanks kept prices from declining further. Israel’s June 13 strikes on Iran and attacks on oil infrastructure between Russia and Ukraine briefly raised prices throughout the year. But the year-end average price still came in at $69 per barrel, the lowest since 2020, even when adjusted for inflation.

The price drop bodes poorly for reviving Venezuela’s oil industry in the wake of the U.S. raid on Caracas and arrest of the South American country’s President Nicolás Maduro. At such low levels, investments in new infrastructure are difficult to justify. “This is a moment where there’s oversupply,” oil analyst Rory Johnston told my colleague Matthew Zeitlin yesterday. “Prices are down. It’s not the moment that you’re like, I’m going to go on a lark and invest in Venezuela.”
The Energy Department granted a Texas company known for recycling defunct tools from oil and gas drilling an $11.5 million grant to fund an expansion of its existing facility in a rural county between San Antonio and Dallas. The company, Amermin, said the funding will allow it to increase its output of tungsten carbide by 300%, “reducing our reliance on foreign nations like China, which produces 83%” of the world’s supply of the metal used in all kinds of defense, energy, and hardware applications. “Our country cannot afford to rely on our adversaries for the resources that power our energy industry,” Representative August Pfluger, a Texas Republican, said in a statement. “This investment strengthens our district’s role in American energy leadership while providing good paying jobs to Texas families.”
That wasn’t the agency’s only big funding announcement. The Energy Department gave out $2.7 billion in contracts for enriched uranium, with $900 million each to Maryland-based Centrus Energy, the French producer Orano, and the California-headquartered General Matter. “President Trump is catalyzing a resurgence in the nation’s nuclear energy sector to strengthen American security and prosperity,” Secretary of Energy Chris Wright said in a press release. “Today’s awards show that this Administration is committed to restoring a secure domestic nuclear fuel supply chain capable of producing the nuclear fuels needed to power the reactors of today and the advanced reactors of tomorrow.”
Low-income households in the United States pay roughly 30% more for energy per square foot than households who haven’t faced trouble paying for electricity and heat in the past, federal data shows. Part of the problem is that the national efficiency standards for one of the most affordable types of housing in the nation, manufactured homes, haven’t been updated since 1994. Congress finally passed a law in 2007 directing the Department of Energy to raise standards for insulation, and in 2022, the Biden administration proposed new rules to increase insulation and reduce air leaks. But the regulations had yet to take effect when President Donald Trump returned to office last year. Now the House of Representatives is prepared to vote on legislation to nullify the rules outright, preserving the standards set more than three decades ago. The House Committee on Rules is set to vote on advancing the bill as early as Tuesday night, with a full floor vote likely later in the week. “You’re just locking in higher bills for years to come if you give manufacturers this green light to build the homes with minimal insulation,” Mark Kresowik, senior policy director of the American Council for an Energy-Efficient Economy, told me.
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The newest reactor at the Zhangzhou nuclear station in Fujian Province has officially started up commercial operation as China’s buildout of new atomic power infrastructure picks up pace this year. The 1,136-megawatt Hualong One represents China’s leading indigenous reactor design. Where once Beijing preferred the top U.S. technology for large-scale reactors, the Westinghouse AP1000, the Hualong One’s entirely domestic supply chain and design that borrows from the American standard has made China’s own model the new leader.
In a sign of just how many reactors China is building — at least 35 underway nationwide, as I noted in yesterday’s newsletter — the country started construction on two more the same week the latest Hualong One came online. World Nuclear News reported that first concrete has been poured for a pair of CAP1000 reactors, the official Chinese version of the Westinghouse AP1000, at two separate plants in southern China.
Back in October, when Japan elected Sanae Takaichi as its first female prime minister, I told you about how the arch-conservative leader of the Liberal Democratic Party planned to refocus the country’s energy plans on reviving the nuclear industry. But don’t count out offshore wind. Unlike Europe’s North Sea or the American East Coast, the sharp continental drop in Japan’s ocean makes rooting giant turbines to the sea floor impossible along much of its shoreline. But the Goto Floating Wind Farm — employing floating technology under consideration on the U.S. West Coast, too — announced the start of commercial operations this week, pumping nearly 17 megawatts of power onto the Japanese grid. Japanese officials last year raised the country’s goal for installed capacity of offshore wind to 10 gigawatts by 2030 and 45 gigawatts by 2040, Power magazine noted, so the industry still has a long way to go.
Beavers may be the trick to heal nature’s burn scars after a wildfire. A team of scientists at the U.S. Forest Service and Colorado State University are building fake beaver dams in scorched areas to study how wetlands created by the dams impact the restoration of the ecosystem and water quality after a blaze. “It’s kind of a brave new world for us with this type of work,” Tim Fegel, a doctoral candidate at Colorado State, who led the research, said in a press release.
Rob talks about the removal of Venezuela’s Nicolás Maduro with Commodity Context’s Rory Johnston.
Over the weekend, the U.S. military entered Venezuela and captured its president, Nicolás Maduro, and his wife. Maduro will now face drug and gun charges in New York, and some members of the Trump administration have described the operation as a law enforcement mission.
President Donald Trump has taken a different tack. He has justified the operation by asserting that America is going to “take over” Venezuela’s oil reserves, even suggesting that oil companies might foot the bill for the broader occupation and rebuilding effort. Trump officials have told oil companies that the U.S. might not help them recover lost assets unless they fund the American effort now, according to Politico.
Such a move seems openly imperialistic, ill-advised, and unethical — to say the least. But is it even possible? On this week’s episode of Shift Key, Rob talks to Rory Johnston, a Toronto-based oil markets analyst and the founder of Commodity Context. They discuss the current status of the Venezuelan oil industry, what a rebuilding effort would cost, and whether a reopened Venezuelan oil industry could change U.S. energy politics — or even, as some fear, bring about a new age of cheap fossil fuels.
Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap, and Jesse Jenkins, a professor of energy systems engineering at Princeton University. Jesse is off this week.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, or wherever you get your podcasts.
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Here is an excerpt from our conversation:
Robinson Meyer: First of all, does Venezuela have the world’s largest hydrocarbon reserves — like, proven hydrocarbon reserves? And number two, let’s say that Trump has made some backdoor deal with the existing regime, that these existing issues are ironed ou to actually use those reserves. What kind of investment are we talking about on that end?
Rory Johnston: The mucky answer to this largest reserve question is, there’s lots of debate. I will say there’s a reasonable claim that at one point Venezuela — Venezuela has a lot of oil. Let’s just say it that way: Venezuela has a lot of oil, particularly the Orinoco Belt, which, again, similar to the oil sands we’re talking about —
Meyer: This is the Orinoco flow. We’re going to call this the Orinoco flow question.
Johnston: Yeah, exactly, that. Similar to the Canadian oil sands, we’re talking about more than a trillion barrels of oil in place, the actual resource in the ground. But then from there you get to this question of what is technically recoverable. Then from there, what is economically recoverable? The explosion in, again, both Venezuelan and Canadian reserve estimates occurred during that massive boom in oil prices in the mid-2000s. And that created the justification for booking those as reserves rather than just resources.
So I think that there is ample — in the same way, like, Russia and the United States don’t actually have super impressive-looking reserves on paper, but they do a lot with them, and I think in actuality that matters a lot more than the amount of technical reserves you have in the ground. Because as we’ve seen, Venezuela hasn’t been able to do much with those reserves.
So in order to, how to actually get that operating, this is where we get back to the — we’re talking tens, hundreds of billions of dollars, and a lot of time. And these companies are not going to do that without seeing a track record of whatever government replaces the current. The current vice president, his acting president — which I should also note, vice president and oil minister, which I think is particularly relevant here — so I think there’s lots that needs to happen. But companies are not going to trip over themselves to expose themselves to this risk. We still don’t know what the future is going to look like for Venezuela.
Mentioned:
The 4 Things Standing Between the U.S. and Venezuela’s Oil
Trump admin sends tough private message to oil companies on Venezuela
Previously on Shift Key: The Trump Policy That Would Be Really Bad for Oil Companies
This episode of Shift Key is sponsored by …
Heatmap Pro brings all of our research, reporting, and insights down to the local level. The software platform tracks all local opposition to clean energy and data centers, forecasts community sentiment, and guides data-driven engagement campaigns. Book a demo today to see the premier intelligence platform for project permitting and community engagement.
Music for Shift Key is by Adam Kromelow.