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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.
You can also add the show’s RSS feed to your podcast app to follow us directly.
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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New York, New Jersey, and Pennsylvania advance a flurry of new ideas to manage the boom.
We know a little bit more about New York’s AI data center moratorium than we did yesterday. Here’s what stands out to me:
Governor Kathy Hochul says this won’t become a ban. “I’m not expecting the need for a ban. I want [the AI companies] to work with us,” she told Bloomberg’s “Odd Lots” podcast. “I understand how important AI is.”
The moratorium isn’t enough for some left-wing groups. As I wrote on Tuesday, Hochul’s order allowed her to avoid signing a more stringent moratorium that included wage requirements and renewable energy mandates for a much wider scope of projects. Kristen Gonzalez, a democratic socialist and a cosponsor of that bill, hailed Hochul anyway for “protecting everyday New Yorkers with a first in the nation moratorium on new large data centers.”
Some New York City progressive groups, while endorsing that more restrictive bill, suggested that she should have gone much further. The New York City chapter of the Sunrise Movement and other left-wing organizations, for instance, posted an Instagram carousel that said: “The dream isn’t better data centers. The dream is no data centers at all.”
New York is also exploring a grid acceleration fund. The governor’s order hints that a few policies should be in place by the time the moratorium ends. These include a new rule that data centers either bring their own power or “pay their fair share” for electricity, and a new state program to help local governments negotiate for community benefits with developers.
But it also opens the door for requiring projects to pay into a grid modernization fund. Such a fund could finance upgrades, set up new virtual power plants, or pay for new sources of zero-carbon energy, the order says. That idea — which resembles proposals from the Searchlight Institute and Groundwork Collaborative — suggests that the state is exploring ways to harness the AI boom for the public. “We want to make sure [data center developers] are investing in the grid,” Hochul said on Tuesday, “but they’re not being asked.”
Which brings me to my larger point. We’re seeing an efflorescence of interesting policymaking on data centers from Democratic governors and state legislators. New York has now enacted this moratorium, of course. Pennsylvania, a true national epicenter of data center construction, has passed new disclosure requirements, and Governor Josh Shapiro has pushed for serious reforms in the country’s largest electricity market.
In New Jersey — where surging power prices were central to last year’s gubernatorial election — the data center buildout has already produced a flurry of new laws. In its most recent session, the state legislature pared back tax incentives for data centers, required utilities to offer a rate for large electricity users, and required data center operators to publish water and energy data. It also set up a novel program that will let data centers pay to reduce electricity demand elsewhere on the grid, such as by setting up virtual power plants (or paying those who participate in them).
It’s been exciting to see different states — and, to be blunt, to see Democratic-governed states, particularly those in the Northeast and Mid-Atlantic — try to take on the data center boom. It’s good to see them test out ideas, solve problems through legislation, and harness this moment for the public good without strangling the buildout entirely. For too long, blue states have leaned into a particular economic model, one in which states want to attract varying forms of development but in fact succeed only in creating new suburbs, office buildings, and warehouses.
Soon after Democrats passed the Inflation Reduction Act, observers noticed that the law’s fruits — and notably its manufacturing investments — were sprouting in red or purple states, particularly in the Southeast and Sun Belt. The so-called Battery Belt bloomed in the Mid-South, for instance, not the Rust Belt. As I discussed with the political scientist Alexander Gazmararian on Heatmap’s podcast Shift Key, that was often due (counterintuitively, I think, for liberals) to a failure of governance: It is GOP-governed states that have the local expertise, institutional capacity, and political muscle memory to attract big new economic development projects.
If Democrats want to see their states do big things — build new housing and transit, decarbonize their power grids, or give birth to new industries — then they will need to develop the same kind of capability. That’s why I’ve so relished seeing blue states reckon with the data center boom. It should be encouraging that New Jersey policymakers, for instance, have to figure out how to manage a new and fast-growing industry on the technological frontier. Even questions that may seem troublesome right now — around land use, for instance, or how to relieve a congested power grid — will likely lead to policies that improve the state.
This kind of policymaking helps the Democratic Party, too. After all, the party’s future national leaders — its members of Congress, cabinet secretaries, and even presidents — are currently serving at the state and local level. The data center boom’s lessons — for good and ill — will resound among the party’s leadership for a long time.
Can she appease AI skeptics, economic development advocates, and renewables boosters?
New York Governor Kathy Hochul tried to pick out a middle way with her data center moratorium, carefully charting a course between the demands of industry, advocacy groups, and voters who are increasingly suspicious of the data center and artificial intelligence industries. Did she succeed? Only time will tell.
Hochul’s first-in-the-nation permitting pause has been hailed by data center opponents who want to re-orient American politics around the artificial intelligence backlash and lamented by the technology sector and its allies, including several in the Trump administration. President Donald Trump himself wrote on Truth Social, “New York State has made a terrible decision.” adding that the “Radical Left Dumocrats must not be allowed to cause us to lose Data Centers, AI, and all of this incredible new Technology, to China.”
Before we discuss what Hochul did, we must first discuss what she didn’t do.
What Hochul’s moratorium is not is her signature on the Responsible Data Center Development Act, a data center moratorium that passed both houses of the state legislature in June. That moratorium had a lower energy use threshold for the moratorium: 20 megawatts, compared to Hochul’s 50 megawatts.
One of that bill’s sponsors, democratic socialist Kristen Gonzalez, appeared alongside Hochul when she signed the executive order Tuesday and hailed the governor for “protecting everyday New Yorkers with a first in the nation moratorium on new large data centers.” When asked about this discrepancy by reporters, Hochul said that “we want to make sure we didn’t touch the data centers that are powering hospitals and schools and research centers,” and specifically mentioned data centers used by “bank back-office operations.”
Protecting bank back-office operations is not typically top of mind for democratic socialists. Gonzalez’s office did not respond to a request for comment.
The goal of the moratorium, Hochul said, is to develop a process for data centers to pay their way in terms of grid costs and electricity rates.
“We expect this process, which we already launched, to be completed within the year,” she said. “Once this policy’s in place, the moratorium will be reviewed and lifted.”
What is still unclear is how this moratorium interacts with renewables development, especially upstate where there is enough open space for both wind and solar power as well as large data centers.
While the New York governor has pulled back on the state’s climate goals as renewable energy and transmission has come under the dual assault of the Trump administration and rising costs, Hochul has made a point of promoting clean power development across the state, especially nuclear and hydropower, which can be built and maintained close to her western New York home base.
A New York data center industry could — emphasis on could — be a major customer for renewable power in the state, especially as there’s little prospect of large-scale new natural gas development.
During her speech announcing the moratorium, Hochul emphasized that “we’ve invested so much in other forms of power to meet the current needs of New Yorkers and our businesses,” and that “New York will require data centers to either produce their own energy or pay a premium to tap into our grid.”
The executive order itself lays out a process whereby, once the moratorium is lifted, new data centers may be required “to fund new clean electric generation and/or battery storage dedicated to their operations, consistent with the State’s clean energy goals, including customer-sited distributed energy resources, to the greatest extent feasible.”
When discussing her energy and economic policies on Bloomberg’s “Odd Lots” podcast this week, Hochul connected her data center moratorium with economic development efforts, especially upstate, where large data centers are more likely to be sited.
Referring to Micron’s $100 billion Syracuse-area semiconductor manufacturing project, Hochul told hosts Joe Weisenthal and Tracy Alloway, “I’ll work with you to get the power you need.” (The state approved a transmission line for the project last year.)
“If I have to choose between powering a largely vacant data center with the same amount of power I can have with a Micron with 1,000 jobs, I can tell you right now where I’m going,” Hochul said. “They can come under the conditions we lay out.”
But it may be just as likely data center developers take the hint and avoid a state with expensive power and high costs of doing business in the best of times.
“I don’t think we know yet how this will impact what’s known as behind-the-meter or off-the-grid power solutions: natural gas, cogeneration, solar, wind, battery storage,” Jeffrey Moerdler, a partner at the law firm Haynes Boone who chairs the data center practice, told me. “I assume it will hold up data centers powered by alternative energy sources.”
As for whether Hochul can successfully keep the one-year moratorium a year (temporary policies have a tendency to become permanent), develop new rules to address her concerns about grid costs and local opposition, and then have data centers line up to get back into New York, Moerdler was skeptical.
“It’s going to take years to make up for that shift” against data center development, he told me, predicting that the moratorium could lead to “many years of new data centers not locating here because they already started during that one-year period somewhere else.”
Something else that must be noted in all of this: “New York is not a high priority location for data centers.” Whether the state’s governor wants it to be remains to be seen.
Where is the smoke worst, where will it go next, and what causes that color?
Before wildfire smoke turns the skies to a jaundiced yellow-gray, it might look almost pretty. Midday light grows diffuse, taking on a crepuscular golden hue. Shadows soften and stretch long. The sunsets are particularly incredible: radiant, neon red.
But as with oleander and poison dart frogs, beautiful things are often the most dangerous. The same wildfire particulates that scatter the light will, once dense enough, turn the air around you orange, then black. They will get into your lungs — slipping past your nose hairs and mucus, the body’s defenses that stop larger particulates — and provoke your immune system into an attack. The tiny air sacs at the ends of the bronchioles in your lungs, where the gas exchange of “breathing” actually happens, will become inflamed. You will become short of breath. You will cough. The smallest smoke particulates may even enter your bloodstream.
And if you are like 24,000 other Americans every year, this will kill you.
Though wildfire smoke exposure might seem to be more of a nuisance to a healthy person than anything else, experts agree it should be taken seriously. “In my profession, wildland firefighting, you make a decision that you run into that,” Nicholai Allen, a firefighter and founder of Safe Soss, a home-hardening product line, told me. “But for my family and my children, I don’t want them breathing in the smoke that’s traveling that far. We have air purifiers, and we’re taking similar precautions.”
On Wednesday, more than 100 million people in the Midwest and Northeast face unhealthy smoke conditions from fires burning up to 2,000 miles away. Here’s what you need to know.
The smoke is largely coming from 150 or so lightning-ignited fires in Ontario and northeastern Minnesota. Triple-digit temperatures, dry conditions, and high winds have fanned a “wall of fire” across the region, as the firefighting newsletter The Hotshot Wakeup put it, even as Canada is, on the whole, tracking behind its five-year average for area burned so far. Most of the fires sending smoke to the U.S. this week are still out of control and spreading rapidly.

A high-pressure area over the central U.S. and a low-pressure area over Eastern Canada are acting as a funnel, pulling bad air east across the Great Lakes region and into the populous Acela Corridor. Conditions are worst closest to the fires: Around 8 a.m. on Wednesday morning, Duluth, Minnesota had a “hazardous” air quality rating of 785 out of 800. By the afternoon, Toronto had the worst air quality of any major city in the world, and drivers in northern Michigan have been advised to slow down and turn on their low-beam headlights because visibility has been so reduced by the smoke. The eastern-moving plume has also blanketed large portions of Upstate New York.
Degraded air quality reached the Boston and New York City areas on Tuesday night and is expected to linger through Thursday. The smoke reaches as far north as Maine, having dimmed the morning light in New Hampshire, and could spread as far south as Washington, D.C. over the next 24 hours.
Though the smoke is staying largely to the north over the middle part of the country, forecasts show it could dip into downtown Chicago on Thursday as well.
Wednesday and early Thursday will be the worst days for the eastern U.S., per the current outlook. A cold front should help push the worst of the smoke out of the region as we head into the weekend.
So far it appears that much of the smoke has remained high enough in the atmosphere that while you’ll be able to see and likely smell it, it might not cause extreme air quality problems on the ground. As of Wednesday afternoon, New York City was recording some of the worst air on the East Coast, with an air quality index of around 160 — bad enough to trigger an “unhealthy” alert for the general public and to rank fifth-worst among major cities worldwide. The rest of the region still mostly showed orange readings designed to alert sensitive groups such as older adults, people with respiratory conditions, and pregnant women, or more moderate yellow ratings.
Conditions could still change, though. Heat, pressure, and winds can drive smoke down to ground level, where it becomes a threat to public health. In fact, the Fox Forecast Center’s models indicate that particulate matter concentrations around the Great Lakes and Northeast could be on par with the 2023 East Coast smoke event, during which New York had the world’s worst air quality, although The New York Times reports that “even the most severe forecasts” this week should not approach that level.
The best thing to do is to continue monitoring your local air quality. If you want help navigating what those readings mean, my colleague Emily Pontecorvo has written a great explainer.
For many on the East Coast, the orange skies are a flashback to the 2023 smoke event. While eerie and apocalyptic, the smoke also gives us an excuse to talk about Mie theory.
Air molecules are much smaller than the wavelength of light. When white light from the sun enters the atmosphere, nitrogen and oxygen scatter the short, higher-frequency blue light in multiple directions. This is known as Rayleigh scattering, and is also the answer to, “Why is the sky blue?” Under normal conditions, wherever you look in the sky, blue light is headed toward your eye.
Smoke particles, while small enough to enter our lungs when inhaled, are larger than air molecules — about the same size as light wavelengths. Because these particles are larger, they also scatter light more democratically, including the lower-frequency, longer reds and oranges. This is called Mie scattering. When sunlight passes through smoke, the reds, oranges, yellows, and blues are all mixed together as they reach our eyes, appearing as a hazy gray or white.
You might expect thicker smoke to result in a darker gray, then. But smoke also contains organic compounds from burned plants called brown carbon, plus soot, both of which absorb visible light. Brown carbon, in particular, prefers light at the shorter end of the spectrum, absorbing about three-quarters of the total light at blue wavelengths in smoke plumes, compared to about half at red wavelengths. That means that when the smoke thickens, the blue light doesn’t reach our eyes nearly as well, and the sky takes on an orange appearance.
One of the dangers of the current smoke event is that it coincides with high temperatures across the Central U.S. and New England. Both conditions together — high heat and smoke — can lead to some confusion over how to respond.
The best strategy is to keep your windows closed. But while it might feel safe side, wildfire smoke can still degrade indoor air quality. “If you have a fresh air intake on your air conditioning system, I would shut that off so that you’re recirculating just your purified air inside your house,” Allen, the firefighter, told me.
You can also install activated carbon exterior filters on attic and crawl space vents and run a purifier with a HEPA filter. (If you bought an air purifier during the last smoke event, consider this your reminder to replace your filter.) “Then I would avoid going outside or exercising outside if there’s smoke in the air,” Allen added. “When the particles are arriving to you from a great distance from the wildfire, they are the smaller particles that can get in your lungs. So not to create undue fear, but there’s definitely stuff in that air that you don’t want to breathe.”