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Rob and Jesse talk with a former Meta energy executive, Near Horizon Group’s Peter Freed.
If you care about decarbonizing the power grid anytime soon, you have to care about data centers. The AI boom and the ongoing growth of the internet have driven a big new cycle of data center construction in the United States, with tech companies trying to buy electricity on the scale of large cities’ energy demands.
Peter Freed has seen this up close. As Meta’s former director of energy strategy, he worked on clean energy procurement and data center development from 2014 to 2024. He is now a founding partner at the Near Horizon Group, where he advises investors and companies on emerging topics in data centers and advanced clean energy.
On this week’s episode of Shift Key, Rob and Jesse talk with Peter about whether AI and new data centers are going to blow up the grid and break decarbonization. What are the real-world constraints on developing a data center in 2025? Are tech companies beginning to run out of natural gas to burn? What do their investments in clean energy mean? And could the rise of AI prompt an accidental return to coal? 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:
Robinson Meyer: Even now, most of the data centers getting built are not AI data centers, right? The AI signal has yet to fully set in. Is that right?
Peter Freed: That’s right. What I would say is, if you look back at what happened, what got announced in 2024, most of the data centers that broke ground and were announced in 2024 were part of a demand plan that was done in 2023, when we did not have the AI demand ratchet, as I call it, on the system.
Now, what people then did is they probably just pulled stuff in. So you know, maybe you were going to do four data centers in 2024 and a few more in 2025. And instead they just, they yanked it forward. So it is also true that we’re definitely seeing the beginnings of this. But this year, 2025, will be a real bellwether year in terms of what the likely overall picture looks like. And one of the proxies that you can use for that is the capex forecast of the hyperscalers. So Meta’s capex forecast in 2024 was $38 billion; 2025, their capex forecast is $65 billion. So that’s a huge jump.
And by the way, Meta in particular doesn’t have a cloud business, so they’re not dependent on the signals coming in from other people. This is just for their own. So in some ways, it’s a clearer picture than we get from some of the other companies. Both Microsoft and Google are up at $80 billion. So to me this says, okay, 2025 is kind of going to show us where this trajectory is likely to go. And it’s pretty high.
I see the same reports that you all see. We’re probably somewhere between 30 [gigawatts] and 100 gigawatts of incremental data center-related load by 2030. I’d take the over at 50 gigawatts. It might be a little bit less, it might be more — 100 [gigawatts], I don’t know. So that’s a big signal.
Jesse Jenkins: For context, 50 gigawatts is half of the U.S. nuclear power fleet.
Freed: That’s correct. Yeah.
Jenkins: Maybe like 10% of U.S. electricity.
Freed: Yeah. Yeah. And so it lines up pretty well with what we were just talking about in terms of those forecasts. At the same time, if you look at all of the load growth projections that utilities with major data center demand have in their jurisdictions, you also get a number which is way larger than 50 gigawatts.
What is the reason for this gratuitous speculative behavior, the likes of which the industry has never seen? And we can talk as much or as little about that as you want, but it is simultaneously true that I think this is going to be a really large demand driver and that we have bubble-like characteristics in terms of the amount of stuff that people are trying to get done.
Music for Shift Key is by Adam Kromelow.
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States filed yet another motion on Monday asking the court to release urgently needed disaster relief.
In case you missed it: The Federal Emergency Management Agency has continued to withhold millions of dollars from states for disaster recovery, relief, and preparedness despite a district court’s order from March 6 calling on the administration to release the funds.
Among the more than 200 FEMA grants to states that remain frozen are a case management program for survivors of the 2023 Maui wildfires, emergency readiness projects in Oregon, and flood hazard mitigation in Colorado, according to a motion filed on Monday in the lawsuit State of New York v. Trump.
The motion was filed the day after Homeland Security Secretary Kristi Noem said her department would move to “eliminate” FEMA during a cabinet meeting.
Twenty-two states plus the District of Columbia filed the suit in the U.S. District Court for the District of Rhode Island in late January, after President Trump’s Office of Management and Budget issued a directive to federal agency heads to conduct a review of funding related to “foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal,” and to pause disbursement of any related funds in the meantime. The states argued that the memo and the executive orders it cites were unconstitutional.
The states sought an injunction on the pause, which Chief Judge John McConnell Jr., a Biden appointee, granted in early March. “The Executive’s categorical freeze of appropriated and obligated funds fundamentally undermines the distinct constitutional roles of each branch of our government,” he wrote in the ruling. “Here, the Executive put itself above Congress. It imposed a categorical mandate on the spending of congressionally appropriated and obligated funds without regard to Congress’s authority to control spending.”
The Trump administration filed notice with the U.S. First Circuit Court of Appeals in Boston that it is appealing the injunction a few days after it was issued.
Prior to the injunction order, the states had identified the disruptions from the pause on FEMA funds as being “particularly acute and widespread.” So as part of the injunction, the Judge directed FEMA to file a status report by March 14 detailing its compliance. But rather than detailing the release of grants previously held hostage, the status report federal lawyers filed on March 14 argued that the agency had “inherent authority” to conduct a “manual review” of the grants, and therefore it is not violating the court’s injunction by continuing to review — and therefore withhold — previously obligated funds.
“This manual review process is not a ‘pause’ or ‘freeze’ on funding,” the status report says, “nor does it mean that the grant is being frozen, held, or not being distributed.”
On Monday, states filed a motion calling BS on this argument and requesting that the court use its authority to enforce the injunction. This was urgent, they argued, because as the end of the first quarter nears, the lack of access to funding is going to start disrupting crucial programs.
If Hawaii doesn’t start receiving reimbursements for its federally-funded case management program by March 31, for example, it will be forced to immediately discontinue its work helping more than 4,000 wildfire survivors create tailored disaster recovery plans and navigate recovery resources. The state used to have to wait approximately a week for FEMA to review reimbursement requests and transfer the funds. Now it’s been waiting nearly 30 days. “This abrupt change in practice is near fatal because a key requirement of FEMA regarding these grant funds is that Hawaiʻi is precluded from maintaining more than three business days’ worth of cash on hand,” the states’ filing says.
FEMA is still issuing funds for some activities. The agency approved Fire Management Assistance Grants for North and South Carolina this week, where several major wildfires have been burning for weeks.
While the Trump administration fights the injunction in court, its supporters in Congress are fighting it on the floor. House Representative Andrew Clyde of Georgia introduced articles of impeachment against Judge McConnell on Tuesday, the latest in a series of such moves to impeach federal judges that have ruled against Trump’s actions. This is despite a warning from the Supreme Court’s Chief Justice, John Roberts, last week in a rare public statement, that “impeachment is not an appropriate response to disagreement concerning a judicial decision.”
Developers have yet to see the approvals start flowing, however.
The Bureau of Land Management claims that Trump’s pause on solar energy permitting is no longer in effect — though no permits have yet come of it.
President Trump paused permitting for solar as well as wind projects for 60 days via executive order on his first day in office. The expiration date on that pause was technically last Friday, and in an exclusive statement to Heatmap, BLM spokesperson Brian Hires said “there is currently no freeze on processing renewable applications for solar” or “making authorization decisions” on projects.
Hires also said all transmission for wind projects is now allowed to advance through federal permitting, a statement that arrives after the agency indicated in emails I obtained that it may soon approve wires for a wind project in Wyoming sited on private land. BLM also approved a transmission project for a solar farm earlier this month, a decision it made public with a press release that also declared solar was part of the president’s “energy dominance” agenda.
This might sound like good news. But I’m going to wait and see before declaring the permitting pause for solar officially dead because we’ve yet to see a solar farm on federal lands permitted under Trump 2.0.
As we reported in February, a leaked industry memo outlined how Trump’s permitting freeze led to chaos and delays for solar energy developers who found that agencies on the fringes of the process — such as the Army Corps of Engineers — were suddenly dragging their feet on crucial permits. Even after the Army Corps told me it was no longer delaying solar permits, I heard conflicting tales from developers, who said there was a disconnect between the public line and government inaction behind the scenes.
A D.C. solar industry lobbyist who requested anonymity to speak candidly on the matter said they’ve yet to receive any clarity on whether the pause has actually been lifted and whether permits will actually be issued now. The source said they’ve heard little from state BLM offices or staff in Washington about what projects may be approved, and that the Interior Department — which oversees BLM — has been “weirdly opaque” with solar developers so far in Trump’s term.
“We can’t get straight answers,” the lobbyist said.
BLM told me the pause is still in effect for wind projects sited on federal lands and in federal waters, pending completion of a comprehensive government review of the wind sector’s environmental and national security implications. There’s been no timetable or deadline set for finishing that review, which has so far been conducted in secret. The agency did not provide me with any information on that study.
In the labyrinthine organizational chart of the U.S. government, the National Oceanic and Atmospheric Administration sits conspicuously within the portfolio of the Department of Commerce. Ocean research and weather monitoring have clear economic stakes, of course, but the responsibilities of the science-oriented agency — targeted for dismantling by the Trump administration for allegedly instigating “climate change alarm” — often seem better suited to the Department of the Interior, or perhaps nestled within the Environmental Protection Agency.
That is, until you start talking about the fisheries.
The United States is the world’s sixth-largest producer of wild-caught seafood, with the fishing industry supporting at least 2.3 million domestic jobs and generating around $321 billion in annual sales. After the National Weather Service, NOAA’s Marine Fisheries Service is the agency’s biggest arm, employing around 4,200 of the roughly 13,000 people who worked at NOAA before Elon Musk’s efficiency layoffs. The NMFS (as it’s known in the acronym-heavy parlance of NOAA) is tasked with managing, conserving, and protecting the nation’s fishing resources and the billions of pounds of domestic seafood harvested annually, along with state departments of natural resources and the Food and Drug Administration.
But like every other line office at NOAA, NMFS now faces cuts of up to 20% of its payroll, which could reduce its services and pass on unpleasant repercussions to seafood-loving Americans. At NOAA Fisheries’ offices in Narragansett, Rhode Island, and Woods Hole, Massachusetts — the latter being the oldest marine research station in the country — at least 20 staff members have already been laid off, The New Bedford Light reports. Though Commerce Secretary Howard Lutnick claimed in his confirmation hearing that it was not his intent to “dismantle” the agency, people all over the climate science and forecasting communities fear that the cuts are effectively doing exactly that. (NOAA declined to comment for this story, citing long-standing practice against discussing internal personnel and management matters.)
“These actions are not the strategic moves of a government looking out for its populace,” Rick Spinrad, the NOAA administrator under President Joe Biden, said in a recent press call hosted by Washington Senator Patty Murray. “They are the unnecessary and malicious acts of a shambolic administration.”
Not all fisherpeople necessarily welcome NOAA into their lives, however. Many fishing communities around the U.S. have long felt neglected by the government, since wild-caught seafood isn’t eligible for traditional farming grants from the Department of Agriculture and it doesn’t qualify for the economic assistance directed toward domestic aquaculture, either. The problem is particularly acute in the case of shrimp, Americans’ favorite seafood, which is eaten by nearly half of the households in the country. Wild-caught shrimp is often more sustainable than domestically farmed shrimp, the latter of which is almost nonexistent, making up less than 1% of what’s on the market in the U.S. But American shrimpers face intense market pressures from the glut of farmed and often illegal foreign imports that make up 90% of the shrimp for sale in stores and restaurants, with little obvious intervention from federal monitors at NOAA or the FDA.
“We’re like, ‘Yeah, kick them all out, burn it down, start fresh,’” Bryan Jones, the vice president of the South Carolina Shrimpers Association and a director of the United States Shrimpers Coalition, told me of he and his colleagues’ frustration with the agency’s priorities. “The entire seafood industry would like to see a mindset shift. What is the purpose of NOAA? Why do they exist?”
Though NMFS performs many functions, perhaps its most important is managing and conserving the nation’s fisheries, the geographic regions where particular stocks of fish are harvested commercially (for example, the Alaska pollock fishery is the nation’s largest commercial fishery, valued at $483.5 million). The agency hires observers to record what’s caught and discarded aboard commercial fishing boats. That data is then used to set quotas on how much of the given population can be harvested in a season, determined in collaboration with private industry partners at the nation’s eight regional fishery management councils. NOAA also prescribes mandatory precautions, such as the use of “turtle excluder devices” in cases where bycatch is a concern, like shrimping.
Though Jones spoke highly of all the individuals he collaborates with at NOAA, the behemoth agency can also move at what feels like a glacial pace. In 2018, for example, a winter freeze decimated the white shrimp stock in Charleston harbor, triggering $1 million in federal disaster relief for the affected shrimpers. But almost seven years later, much of that emergency money still hasn’t been distributed by NOAA. And even that amount was still far short of the $2 million in requests made by the Lowcountry shrimpers.
But there are also stark counterexamples of what can happen to fisheries when the data collected by NOAA falters or degrades, as is likely to happen if the layoffs continue apace. In 2020, the COVID-19 pandemic suspended NOAA’s annual Bering Sea bottom trawl survey, leading to gaps in the data about the snow crab population. Then, in 2021, following a marine heat wave, the snow crab fishery collapsed, meaning its population saw a decline of more than 90% and was too small to sustain a harvest. “Consequently, we don’t have a good idea of what [the snow crab] population looked like the year prior, in 2020, and we need that type of data to know how many fish and crabs we can catch each year, where the populations are going as the oceans change, and to keep track of environmental trends,” Rebecca Howard, a former research fish biologist at the Alaska Fisheries Science Center in Seattle who NOAA laid off, said on the virtual press call with Spinrad and Murray.
For much of the 1980s and 1990s, U.S. fisheries were not in a good state; overfishing caused the populations of many of the country’s most iconic fish stocks, including flounder and cod, to collapse. Stricter limits on overfished stocks have allowed populations to recover in recent years. Today, the U.S. can boast of having “the best-managed fisheries in the world,” Sally Yozell, the former Deputy Assistant Secretary for Oceans at NOAA, told me. “And there was a lot of pain that went into getting to that point,” she said. “It took a lot of science and a lot of pain by the fishermen,” who weren’t allowed to harvest certain species during the recovery efforts. Today, the agency is involved in managing more than 400 fish stocks.
But Yozell also pointed out that it is the balance between commerce and science that is crucial. “It’s not fair to say to a fisherman, ‘Okay, you go and guard your own hen house,’” she added. “I mean, they’ll fish as much as they can — and why not? It’s in their nature. That’s why we have openings and closings [of fisheries] that are science-based,” intended to prevent overfishing or population collapse.
If the quality of NOAA’s fishery management data suffers as it hemorrhages staff, the regional fishery management councils will likely err on the side of caution rather than risk a fishery collapse, which, if severe enough, could result in localized extinctions. “That could mean scaling back the amount of fish that could be harvested to take a more precautionary approach,” Sarah Poon, the associate vice president of Resilient Fishery Solutions at the Environmental Defense Fund, told me. Sure enough, fishermen have already overfished Atlantic bluefin tuna off North Carolina this year because NOAA failed to close the fishery after the quota was reached — an uncharacteristic oversight that was apparently due to the agency’s layoffs, Reuters reports, and that will likely result in more conservative management of fisheries down the line.
The New England Fishery Management Council is already warning that the continued freeze at NOAA could delay the traditional May 1 opening of its groundfish fishery, and the valuable New England scallop fishery might also see delays as NOAA struggles to issue its standard regulations. Spinrad, the former NOAA administrator, has warned that the layoffs could potentially disrupt the $320 billion annual salmon hatcheries in the Pacific Northwest if commercial fishing closures or delays continue to occur.
Despite his frustrations with the bureaucracy of NOAA, the South Carolina shrimper, Jones, said that fishing communities would be the first to acknowledge the importance of good data, science, common-sense regulations, and stock management. “We’re all environmentalists at the end of the day,” he said, pointing out that fishermen wouldn’t have jobs if pollution or overfishing endangered the shrimp population.
But while many at NOAA now fear for their livelihoods, the stakes for small fishing communities have long felt existential. “It’s not hyperbole to say we’re at a precipice,” Jones went on. “There’s a chance that we may not be around in a couple of years — it’s that bad.” Sales of South Carolina seafood have nearly halved since the early 2010s, and the number of shrimp boats on the water in Georgetown County, the “seafood capital” of the state, has done the same.
But if wild-caught shrimp vanish from the markets, it could mean an even heavier reliance on farmed imports. Foreign aquaculture, however, is rife with forced labor and human rights violations, rampant environmental pollution and habitat destruction, and serious contamination concerns. Other seafood sectors, like white fish, are contending with adversaries such as Russia mixing in foreign-caught fish with domestic fish during processing and labeling it American wild-caught, or with outright mislabeling — though it again falls on NOAA’s potentially compromised enforcement capabilities to verify that U.S. seafood is actually wild-caught in the U.S.
EDF’s Poon told me it’s the most volatile fisheries that are ultimately most reliant on NOAA’s data, a category she believes shrimp falls into given warming-related environmental pressures and harmful algal blooms. While she agreed that NOAA Fisheries could use some “fine-tuning and refinement,” Poon added that turmoil at the agency is “already upending some of these decision-making processes that we have,” for the worse.
And while the NOAA layoffs might be cathartic for some in the fishing industry, there is also no clear indication that a regime change in Washington will mean the reversal of fortunes for fishermen. “It’s like we’re viewed as something to be managed out of existence; that’s the perception we’ve had and the way we felt,” Jones said. “I see a lot of great scientists and folks that work on the ground with us and are very helpful, but from an agency standpoint — yes, that’s how we felt.”
But “I mean, we’ve never gotten a call from Howard Lutnick, either,” he said.