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Rob and Jesse talk Trump, contracts, and climate messaging with the lawmaker from Hawaii.
The first few weeks of the new Trump administration have seen an onslaught of anti-climate actions: an order punishing the wind industry, an attempted reversal of the Environmental Protection Administration’s climate authority, and a brazen — and possibly unconstitutional — attempt to freeze all spending under Biden’s climate laws. Democrats’ climate legacy seems to be under assault. How will they respond?
Senator Brian Schatz has represented Hawaii in the U.S. Senate since 2010. He is the chief deputy whip for the Democratic Party. A self-described climate hawk, he helped shape what became the Inflation Reduction Act, and he has emerged as an early voice of opposition to the second Trump administration. He was previously Hawaii’s lieutenant governor and a state lawmaker.
On this week’s episode of Shift Key, Rob and Jesse talk to Schatz about congressional Democrats’ plan to push back against Trump, what the clean energy industry needs to do for the next four years, and whether this climate backlash to Trump should be different than the last one. Shift Key is hosted by Jesse Jenkins, a professor of energy systems engineering at Princeton University, and Robinson Meyer, Heatmap’s executive editor.
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:
Jesse Jenkins: What can Democrats or others in opposition do to shorten that timeline, so that there is a political cost that’s felt more expediently and they do pull back from this kind of effort?
Brian Schatz: Look, I think there is strength in numbers, and so I think everyone has to — like, we can’t do this in secret, because everybody’s too afraid of being targeted. And you know, I’ve just experienced this over the last two weeks. Everyone is … you know, doesn’t want to poke their head up because the nail that stands up is pounded down. And that’s how autocrats work, right? Is that if you stand up for the rule of law, if you stand up and say, hey, I don’t think this is a good decision, then you are putting your own personal, professional safety at risk. And so there is strength in numbers.
And I’ll just also … I really strongly encourage anybody who listens to this podcast who is in the business of being a clean energy developer, do not plead with the monarch for mercy on your own project. That is what they want. They want you to come in and treat the federal government like it’s the Ford Foundation, or the Pew Charitable Trust, or whomever. And you’re basically saying, I know you don’t want to do DEI, but let me explain to you why this isn’t DEI. I know this says climate, but in fact, really, it’s severe weather adaptation.
Listen, listen, what’s happening is unlawful. What’s happening is impermissible. And the more we get people individually pleading for mercy, the more screwed we all are. We all have to hang together. It’s the American Clean Power Association. It’s the energy company that does both clean and fossil energy. It’s the transmission and distribution companies. It’s the manufacturers. It’s labor. It’s Wall Street. It’s K Street. Like, everyone has to hang together and say, not only is this good for business, but there’s something that is foundationally worse for business than any individual policy decision. And that is the idea that a president can come in and ignore the law. Because once you believe that it depends on an election whether or not a law is going to stick, the United States ceases to be as investable as it once was.
And one of the things that makes us the most powerful economy in the world is, whatever else is going on, if you’re an international investor, you have a number of factors — you know, how are you going to get your money out. But you’re always looking for political and policy stability. And the United States is always able to say, on rule of law, on political and policy stability, we rank number one, two, three, or four. And right now, it is fair to question whether or not we’re an investable place if we believe that a president can come in and just ignore a duly enacted statute.
This episode of Shift Key is sponsored by …
Download Heatmap Labs and Hydrostor’s free report to discover the crucial role of long duration energy storage in ensuring a reliable, clean future and stable grid. Learn more about Hydrostor here.
Music for Shift Key is by Adam Kromelow.
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On Rick Perry’s loan push, firefighters’ mask rules, and Europe’s heat pump problems
Current conditions: The Garnet Fire has scorched nearly 55,000 acres in Sierra National Forest, east of Fresno, California, and now threatens 2,000-year-old sequoia trees • Hurricane Kiko is losing intensity as it reaches Hawaii • Tropical Storm Tapah has made landfall over China, forcing evacuations and school closures.
U.S. emissions cuts under Trump's current policy versus the Biden-era policies. Rhodium Group
The United States’ output of planet-heating pollution is on track to continue double-digit declines through 2040, even if the Trump administration successfully eliminates all the policies it’s targeting to cut greenhouse gas emissions. That’s according to the latest assessment from the Rhodium Group consultancy. A new report published Wednesday morning found that U.S. emissions are set to decline by 26% to 43% relative to 2005 levels in 2040. While that sounds like a significant drop, it’s a “meaningful shift” away from Rhodium’s estimates last year, which showed a steeper decline of 38% to 56%. In all, as Heatmap’s Emily Pontecorvo wrote, the Trump administration’s policies could halve U.S. emissions cuts.
“Perhaps the only bright side in the report is a section on household energy costs,” Emily added. “The loss of tax credits for renewables and home efficiency upgrades will raise electricity bills compared to the projections in last year’s report. But despite that, Rhodium expects overall household energy costs to decrease in the coming decades — in all scenarios. That’s primarily due to the switch to electric vehicles, which lowers transportation costs for EV drivers and puts downward pressure on the cost of gasoline for everyone else.”
Fermi America, the company former Secretary of Energy Rick Perry founded to build one of the world’s biggest data center complexes in Texas, plans to push the Department of Energy for loans to finance its project, E&E News reported. In a filing to the Securities and Exchange Commission for its initial public offering on Monday, the developer laid out its vision for a 5,263-acre gas and nuclear complex in Armadillo, Texas, on land owned by the Texas Tech University. The company said it was in “pre-approval” process with the Energy Department’s loan office, which it hoped would “finance key components” of its energy infrastructure. The company has filed an application for up to four Westinghouse nuclear reactors at the site, which federal regulators confirmed they’re reviewing. In his executive orders on nuclear power in May, Trump directed the Energy Department to approve at least 10 new large-scale reactors. “We believe the Trump Administration’s renewed focus on expedited permitting and the expansion of nuclear infrastructure in the United States presents a favorable backdrop for Fermi to replicate its business model,” the filing said.
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Solar developer Pine Gate Renewables has started consulting advisers to deal with liquidity constraints amid the Trump administration’s push to derail the clean energy industry, Bloomberg reported. The company is working with Lazard Inc. and Latham & Watkins. It has some high-profile backers with loans from Brookfield Asset Management and Carlyle Group, while Blackstone provided preferred equity.
The move to enlist advisers is a sign of the challenges ahead for renewables. With new restrictions on imported solar panels coming into force, solar prices could soon rise. As Heatmap’s Matthew Zeitlin reported in April, that could erode solar’s price advantage over gas. With tariffs staying in place and tax credits going away, Morgan Stanley analysts warned that power purchase agreement prices for solar could go up as high as $73. That’s just a few dollars off from the cost of natural gas.
For decades, the U.S. government banned wildfire fighters from wearing masks that officials deemed too cumbersome, allowing only bandannas that offer no protection against toxins in wildfire smoke. But the Forest Service proposed new guidance Monday acknowledging for the first time that masks can protect firefighters against harmful particles in the smoke, The New York Times reported. The move came as part of a series of safety reforms meant to improve conditions for firefighters. In its reversal, the agency said it has now stockpiled some 80,000 N95 masks and will include them in standard equipment packs for all large fires.
Keeping firefighters employed has been difficult as blazes grow with each passing year. As Heatmap’s Jeva Lange wrote last year, “retirements and defections from skill-based work like firefighting are especially damaging because with every senior departure goes the kind of on-the-job expertise that green new hires can’t replace. But that’s if there are new hires in the first place. Rumors abound that the agencies are struggling to fill their openings even this late in the training cycle, with a known vacancy rate of 20% in the Forest Service force alone.” As I reported last week in this newsletter, the Trump administration’s arrest of immigrant firefighters battling the largest blaze in Washington last month has spurred blowback from lawyers who say the move jeopardized the effort to contain the disaster.
After booming in the wake of Russia’s invasion of Ukraine, European heat pump sales are slumping. It’s part of what one of the world’s largest manufacturers of the appliances called a “structural problem,” as demand dropped to a third of previous projections. In an interview with the Financial Times, Daikin president Naofumi Takenaka said orders for heat pumps have fallen as the economy has weakened and subsidies have decreased. “When we compare the market demand we had projected for 2025 at the time to the current market, it has stopped at roughly one-third of that, so it will take three to five years to return to such levels,” Takenaka said, speaking at Daikin’s headquarters in Osaka. “This is a structural problem.”
Beaked whales are considered one of the least understood mammals in the world due to their cryptic behavior and distribution in offshore waters, diving deeper than any other mammals on record and going below the surface for more than two hours. But scientists at Brazil’s Instituto Aqualie, Juiz de Fora Federal University, Mineral Engenharia e Meio Ambiente, and Santa Catarina State University set out to record the elusive whales. By doing so, they identified at least three different beaked whale species. “The motivation for this research arose from the need to expand knowledge on cetacean biodiversity in Brazilian waters, with particular attention to deep-diving species such as beaked whales,” author Raphael Barbosa Machado said in a press release.
Rob and Jesse riff on the state of utility regulation in America — and how to fix it.
Electricity is getting more expensive — and the culprit, in much of the country, is the poles and wires. Since the pandemic, utility spending on the “last mile” part of the power grid has surged, and it seems likely to get worse before it gets better.
How can we fix it? Well, we can start by fixing utility regulation.
On today’s episode of Shift Key, Rob and Jesse talk about why utility regulation sucks and how to make it better. In Europe and other parts of the world, utilities are better at controlling their cost overruns. What can the U.S. learn from their experience? Why is it so hard to regulate electricity companies? And how should the coming strains of electrification, and climate change affect how we think about the power grid? 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.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, YouTube, 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: This is, I think, exactly where the wonky habit of referring to this as “T&D,” or transmission and distribution —
Jesse Jenkins: Yeah, we should split those.
Meyer: — simply because it’s a part of people’s bills, is actually driving the misnomer, because it allows renewable opponents — like the current administration, like officials in the current administration to say, Oh, well, the transmission and distribution section, the wire is part of the grid, is the surging part of electricity costs, this is driven by renewables. And that kind of does cohere to a mental model people might have of, oh, you have to build a lot of solar farms everywhere, or, oh, you have to build a lot of wind farms everywhere. They’re distributed over the landscape, unlike a single big power plant or something, and therefore that is driving up transmission spending.
And indeed, for renewables, as Jesse was saying, you do have to build more transmission. But where you look at the actual increase in prices is coming from in that T&D section of the bill, it is not at all that story. It’s all coming from distribution.
Jenkins: It’s certainly not coming from long-distance transmission because we’re not building any long-distance transmission, right?
And that’s the other big problem, is we have not been building transmission at anywhere near the pace that we have historically during periods when demand was growing rapidly to tap into the best resources around the country. But also, then, we should be, if we were to try to tap into American renewable energy resources that could lower consumer costs. The transmission we are building is mostly also local, short-distance, reliability-related upgrades that the transmission utilities are able to build with much less regulatory oversight.
Mentioned:
Rob on how electricity got so expensive
Matthew Zeitlin on Trump’s electricity price problem
Ofgem’s price cap
Previously on Shift Key: How to Talk to Your Friendly Neighborhood Public Utility Regulator
Jesse’s upshift (plus one more); Rob’s upshift.
This episode of Shift Key is sponsored by …
Hydrostor is building the future of energy with Advanced Compressed Air Energy Storage. Delivering clean, reliable power with 500-megawatt facilities sited on 100 acres, Hydrostor’s energy storage projects are transforming the grid and creating thousands of American jobs. Learn more at hydrostor.ca.
Music for Shift Key is by Adam Kromelow.
A new report from Rhodium Group takes stock of how Trump’s policies will affect America’s emissions future.
In less than a year, the Trump administration has fully transformed U.S. climate and energy policy. The changes have come through the tax code, regulatory repeals, and sweeping but fickle tariffs. Taken together, it means that the worst-case scenario for climate action under Biden has now become the best-case scenario under Trump.
That’s one of the key findings of the Rhodium Group’s latest Taking Stock report, an annual look at how U.S. policies will shape our energy system and emissions trajectory. It’s the first comprehensive assessment of the degree to which Trump’s second term, early as it is, could impede the energy transition. While total U.S. emissions are not expected to go up in the coming decade, the report projects greatly diminished progress compared to the path we were on a year ago.
That point is most clearly illustrated by the following finding: For the past two decades, the U.S. has been reducing emissions by an average of 1% per year. In the coming decade, Rhodium projects that Trump’s policies could reduce this rate by more than half.
Last year’s report, produced at the absolute peak of U.S. climate policy, modeled the effect of clean energy tax credits in the Inflation Reduction Act, new regulations on cars, trucks, power plants, and oil and gas operations, Biden’s freeze on new liquified natural gas export facilities, and a number of state-level policies. While these actions were not expected to be enough to fulfill Biden’s promise to the rest of the world under the Paris Agreement to cut emissions by 50% to 52% by 2030 compared to 2005, they represented America’s first credible show of climate leadership on the global stage. The report estimated that by 2035, we would be able to reduce greenhouse gas emissions 38% to 56%.
Now the low end of that spectrum has become overly optimistic. Rhodium has revised its estimate downwards to reflect revisions to the tax credits in the One Big Beautiful Bill Act — namely, the early end of subsidies for wind, solar, and EVs. The new report also takes into account tariffs, which primarily serve to reduce industrial activity in the U.S. in the near term, Congress’ cancellation of California’s vehicle emissions waivers, and Trump’s efforts to roll back greenhouse gas regulations. The result is that Rhodium expects emissions to decline by 26% to 35% by 2035.
The gap between this projection and last year’s represents about 800 million to 1.3 billion metric tons of carbon. On the high end, that’s roughly equivalent to the emissions from California, Texas, and Michigan combined.
The estimates are expressed as a range because the report looks at what would happen under three different scenarios. The highest emissions scenario models a world where oil and gas prices remain low, clean technology costs remain high, and the economy grows faster than current projections. The low emissions scenario is the opposite — it shows how Trump’s policies will affect our trajectory if oil and gas prices are higher, clean technologies see steeper cost declines and performance improvements, and economic growth is more aligned with current projections. The mid-emissions scenario splits the difference.
The most significant policies for shifting our emissions trajectory, according to Ben King, one of the report’s authors, are the combination of tax credits and regulations affecting the power sector. The regulations, in particular, mean the difference between having almost no coal plants on the grid by 2040 and retaining as many as 77 gigawatts of coal power by that date. “That’s still a massive decline in the amount of coal relative to what we have today,” King said, “but it is a very different-looking grid than if those regulations were to stay in place.”
Whether coal plants are replaced by clean energy or natural gas largely depends on the cost of each. Somewhat counterintuitively, the report projects less coal in the high emissions scenario because low natural gas prices mean that gas plants supplant both coal and renewables.
Even the forms of clean energy that the Trump administration supports, such as nuclear and geothermal, are not expected to play a significant role in reducing emissions over the next 15 years. For example, in the low emissions scenario, where oil and gas prices are high, about 2 gigawatts of new advanced nuclear is added to the grid in the 2030s. But because the tax credit for existing nuclear plants is set to expire in 2032, the models project that 2 gigawatts to 5 gigawatts of nuclear power will shut down in the 2030s, more than canceling out the additions.
The effect of unwinding transportation-related regulations and incentives is more straightforward — fewer EVs, higher emissions. Last year’s report projected that up to 72% of all light duty vehicle sales would be electric by 2032. The new report expects light duty EV sales to make up just 43% of the total, at most, by 2040. This is almost entirely due to the loss of greenhouse gas rules. If those remained in place, EV sales could reach 71% by 2040.
Perhaps the only bright side in the report is a section on household energy costs. The loss of tax credits for renewables and home efficiency upgrades will raise electricity bills compared to the projections in last year’s report. But despite that, Rhodium expects overall household energy costs to decrease in the coming decades — in all scenarios. That’s primarily due to the switch to electric vehicles, which lowers transportation costs for EV drivers and puts downward pressure on the cost of gasoline for everyone else.
No modeling exercise is perfect, and this one contains a number of caveats. One of the biggest points of uncertainty right now is how much energy demand from data centers will grow. The authors modeled just one pathway for data centers, with power demand nearly doubling by 2030 and more than tripling by 2040. But they note that analyst estimates fall as much as 80% higher or 80% lower. If demand turns out to be higher, “it would effectively turn up the dial on the trends that we’re seeing already,” King said.
Another area of uncertainty is that the Trump administration is working overtime to find creative new ways to stymie wind and solar development, as my colleague Jael Holzman has documented. It could turn out that these moves are even more effective than what Rhodium has captured in this report, King told me. With tariffs changing on a weekly, sometimes even daily basis, it was also difficult to capture how much of an impact they will have on technology prices, he said. Lastly, there’s a human behavior element that’s difficult for models to project.
“In the absence of government support, this is all going to happen on the basis of what private investors see as wise moves moving forward,” King said. “I don’t know the extent to which they might look at the uncertainty that the Trump administration is introducing for some of these technologies, and say, ‘Gosh, I’m going to avoid that for the foreseeable future, and maybe even beyond.’”