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Inside season 2, episode 1 of Shift Key.
Two years ago this week, President Joe Biden signed the Inflation Reduction Act, the largest investment in clean energy and climate mitigation in American history. It contained roughly two dozen new or expanded tax credits that will — if the forecasts bear out — provide hundreds of billions of dollars in funding over the next decade. The administration is now rushing to finalize those provisions before the November election.
Perhaps no official has been more central to setting up those tax credits than Wally Adeyemo, the deputy secretary of the U.S. Treasury Department. He is also the Treasury’s No. 2 official and chief operating officer. Adeyemo has led the agency’s effort to implement the climate law, overseeing a group of tax lawyers and political appointees who are critical to the legislation’s ultimate success. He joins Shift Key this week to help us kick off our second season and talk about how the effort to implement the climate law is going, what could stand in its way, and why he wants some kind of permitting reform.
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, 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Robinson Meyer: So obviously, one of the huge risks for investors is that the IRA is repealed, in part or in full, in the next Congress. And we know, just as a fact, that Congress is going to have to do something on taxes. Next Congress, the Trump tax cuts are expiring, there’s going to be, there’s interest in doing something with a child tax credit. It’s going to really come down to who has control of the two chambers.
How are you thinking about, as a Democratic administration, protecting the IRA going into a very ambiguous 2025 environment, and how are companies who you talk to thinking through that quite large political risk around the threat of repeal next year?
Wally Adeyemo: So maybe I’ll break it down into two different types of tax credits, the business tax credits and the consumer-oriented tax credits. When it comes to business tax credits, as you both know from following this for a while, those don’t usually go away. Because ultimately, what happens is that, for these businesses, they do a fairly good job of making clear to members how those tax credits are tied to jobs that end up being in their districts.
One of the things that I’m proudest of is, when you look at the dispersion of projects tied to the IRA throughout the country, it puts us in a place where a number of people who voted for — and even, in some cases, many who didn’t vote for — the IRA now have significant projects being funded by the IRA happening in their districts, that they’re hiring people based on IRA-related projects, and it’s driving real economic activity. So when it comes to these business tax credits, my sense is that there’s going to be a case for keeping them, independent from the climate goals, which they’re helping to achieve because of the fact that they’re creating jobs in these districts that are helping to power those local economies.
On the consumer tax credits — and just today, I think we’re speaking on August 7, we put out a report about more than 3 million Americans claiming a set of consumer-oriented credits to help install things like solar panels on their homes, and heat pumps. And on these credits — they existed before the IRA. And frankly, what we did with the IRA was, we further incentivized people and created some flexibility within these credits.
These credits existed in the last administration. They’ve existed during the Obama administration. So the reality is that for some of these consumer-oriented credits and some of the business-oriented credits, they had both existed in Republican administrations. There have been Republicans who have supported them. For example, when you think about the wind credits, there have been a number of senators from the Midwest, both Democrats and Republicans, who have been huge advocates for them because they matter to their district.
So from my standpoint, the most important thing we can do to preserve the IRA is to make sure that we get these rules done as quickly as possible, so that not only businesses but individuals start to rely on them. They help, from my standpoint, address the climate crisis that we face. But from the standpoint of consumers, they help lower their cost. And the report we put out today showed that for some consumers installing a heat pump, for example, it lowered the cost of utilities by up to $3,000 a year. The more that happens, the more people who take advantage of it, the more likely that those tax credits are going to remain. And I think that’s also true for the business tax credit. So that’s the strategy, and I think that it’s one that’s been borne out by other business and consumer tax credits in the past.
This episode of Shift Key is sponsored by …
Watershed’s climate data engine helps companies measure and reduce their emissions, turning the data they already have into an audit-ready carbon footprint backed by the latest climate science. Get the sustainability data you need in weeks, not months. Learn more at watershed.com.
As a global leader in PV and ESS solutions, Sungrow invests heavily in research and development, constantly pushing the boundaries of solar and battery inverter technology. Discover why Sungrow is the essential component of the clean energy transition by visiting sungrowpower.com.
Antenna Group helps you connect with customers, policymakers, investors, and strategic partners to influence markets and accelerate adoption. Visit antennagroup.com to learn more.
Music for Shift Key is by Adam Kromelow.
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On the presidential debate, California’s wildfires, and the nuclear workforce
Current conditions: Hurricane Francine is approaching Louisiana as a Category 1 storm • The streets of Vietnam’s capital of Hanoi are flooded after Typhoon Yagi, and the death toll has reached 143 • Residents of Nigeria’s northern Borno state are urged to watch out for crocodiles and snakes that escaped from a zoo due to flooding.
Former President Trump and Vice President Kamala Harris squared off on the debate stage in Philadelphia last night. Here are some important climate and energy highlights from the evening:
Three large wildfires – the Line fire, the Bridge fire, and the Airport fire – are burning in Southern California, fueled by intense heat and thick, dry vegetation. Already more than 100,000 acres have been scorched. The Line fire is closing in on the popular vacation destination Big Bear, and is threatening some 65,000 structures. Los Angeles County Fire Chief Anthony Marrone said the scale of the emergencies is straining firefighting resources, and FEMA is sending financial aid to the state. In neighboring Nevada, the Davis Fire has grown to nearly 6,000 acres and is burning toward ski resorts in Tahoe. Temperatures in the region started to cool yesterday after a long and brutal heat wave. The weather shift could help firefighters bring the blazes under control.
The White House is launching an American Climate Corps national tour this fall to highlight the work being carried out by corps members in different communities and showcase important projects. The events will feature remarks from the administration and other officials, roundtable talks with ACC members, and swearing-in ceremonies. The tour began in Maine this week with a focus on climate resilience and urban forestry, and heads to Arizona next week. The rest of the schedule is as follows, with more dates to come:
The number of students studying to become nuclear engineers is declining as demand for carbon-free nuclear energy is on the rise, according toThe Wall Street Journal. Citing data from the Oak Ridge Institute for Science and Education, the Journal reported that just 454 students in the U.S. graduated with a degree in the field in 2022, down 25% from a decade earlier. Meanwhile, the industry’s workforce is aging. “We need nuclear expertise in order to combat climate change,” said Sara Pozzi, professor of nuclear engineering and radiological sciences at the University of Michigan. “We are at a crucial point where we need to produce the new generation of nuclear experts so that they can work with the older generation and learn from them.” The drop in new recruits comes down to nuclear’s image problem thanks to public disasters like Chernobyl and Fukushima, the Journal speculated.
Critical metal refining company Nth Cycle announced this week it has become the first company to produce nickel and cobalt mixed hydroxide precipitate (MHP) in the U.S. following the opening of its commercial-scale facility in Ohio. The company’s “Oyster” technology uses electricity to turn recyclable industrial scrap and mined ore into MHP, a key component in clean-energy technologies like batteries. “This revolutionary innovation replaces pyrometallurgy with one of the cleanest technologies in the world, and accelerates the net zero targets of the public and private sector,” the company said in a press release. It claims the Ohio unit can produce 900 metric tons of MHP per year, which would be enough to supply batteries for 22 million cell phones. The company says its process reduces emissions by 90% compared to traditional mining methods and can help EV manufacturers meet the IRA’s sourcing requirements.
A new nationwide poll of 1,000 registered U.S. voters found that 90% of respondents support President Biden’s federal clean energy incentives in the Inflation Reduction Act, including 78% of respondents who said they were Trump voters.
Maybe you’ve never heard of it. Maybe you know it too well. But to a certain type of clean energy wonk, it amounts to perhaps the three most dreaded words in climate policy: the interconnection queue.
The queue is the process by which utilities decide which wind and solar farms get to hook up to the power grid in the United States. Across much of the country, it has become so badly broken and clogged that it can take more than a decade for a given project to navigate.
On this week’s episode of Shift Key, Jesse and Rob speak with two experts about how to understand — and how to fix — what is perhaps the biggest obstacle to deploying more renewables on the U.S. power grid. Tyler Norris is a doctoral student at Duke University’s Nicholas School of the Environment. He was formerly vice president of development at Cypress Creek Renewables, and he served on North Carolina Governor Roy Cooper’s Carbon Policy Working Group. Claire Wayner is a senior associate at RMI’s carbon-free electricity program, where she works on the clean and competitive grids team. 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, 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: Can I interject and just ask why, over the past decade, the interconnection queue got much longer — but also over the past decade, 15 years, the U.S. grid did change in character and in fuel type a lot, right? We went from burning a lot of coal to a lot of natural gas. And that transition is often cited as one of the model transitions, one of the few energy transitions to happen globally that happened at the speed with which we would need to decarbonize. Obviously, switching coal to gas is not decarbonizing, but it is a model — it happened fast enough that it is a good model for what decarbonizing would look like in order to meet climate goals.
Evidently, that did not run into these kind of same interconnection queue problems. Why is that? Is that because we were swapping in within individual power plants? We were just changing the furnace from a coal furnace to a gas furnace? Is that because these were larger projects and so it didn’t back up in the queue in the same way that a lot of smaller solar or wind farms do?
Claire Wayner: I would say all the reasons you just gave are valid, yeah. The coal to gas transition involved, likely, a lot of similar geographic locations. With wind and solar, we’re seeing them wanting to build on the grid and in a lot of cases in new, rather remote locations that are going to require new types of grid upgrades that the coal to gas transition just doesn’t have.
Jesse Jenkins: Maybe it is — to use a metaphor here — it’s a little bit like traffic congestion. If you add a generator to the grid, it’s trying to ship its power through the grid, and that decision to add your power mix to the grid combines with everyone else that’s also generating and consuming power to drive traffic jams or congestion in different parts of the grid, just like your decision to hop in the car and drive to work or to go into the city for the weekend to see a show or whatever you’re doing. It’s not just your decision. It’s everyone’s combined decisions that affects travel times on the grid.
Now, the big difference between the grid and travel on roads or most other forms of networks we’re used to is that you don’t get to choose which path to go down. If you’re sending electricity to the grid, electricity flows with physics down the path of least resistance or impedance, which is the alternating current equivalent of resistance. And so it’s a lot more like rivers flowing downhill from gravity, right? You don’t get to choose which branch of the river you go down. It’s just, you know, gravity will take you. And so you adding your power flows to the grid creates complicated flows based on the physics of this mesh network that spans a continent and interacts with everyone else on the grid.
And so when you’re going from probably a few dozen large natural gas generators added that operate very similarly to the plants that they’re replacing to hundreds of gigawatts across thousands of projects scattered all over the grid with very complicated generation profiles because they’re weather-dependent renewables, it’s just a completely different challenge for the utilities.
So the process that the regional grid operators developed in the 2000s, when they were restructuring and taking over that role of regional grid operator, it’s just not fit for purpose at all for what we face today. And I want to highlight another thing you mentioned, which is the software piece of it, too. These processes, they are using software and corporate processes that were also developed 10 or 20 years ago. And we all know that software and computing techniques have gotten quite a bit better over a decade or two. And rarely have utilities and grid operators really kept pace with those capabilities.
Wayner: Can I just say, I’ve heard that in some regions, interconnection consists of still sending back and forth Excel files. To Tyler’s point earlier that we only just now are getting data on the interconnection queue nationwide and how it stands, that’s one challenge that developers are facing is a lack of data transparency and rapid processing from the transmission providers and the grid operators.
And so, to use an analogy that my colleague Sarah Toth uses a lot, which I really love: Imagine if we had a Domino’s pizza tracker for the interconnection queue, and that developers could just log on and see how their projects are doing in many, if not most regions. They don’t even have that visibility. They don’t know when their pizza is going to get delivered, or if it’s in the oven.
This episode of Shift Key is sponsored by …
Watershed’s climate data engine helps companies measure and reduce their emissions, turning the data they already have into an audit-ready carbon footprint backed by the latest climate science. Get the sustainability data you need in weeks, not months. Learn more at watershed.com.
As a global leader in PV and ESS solutions, Sungrow invests heavily in research and development, constantly pushing the boundaries of solar and battery inverter technology. Discover why Sungrow is the essential component of the clean energy transition by visiting sungrowpower.com.
Antenna Group helps you connect with customers, policymakers, investors, and strategic partners to influence markets and accelerate adoption. Visit antennagroup.com to learn more.
Music for Shift Key is by Adam Kromelow.
In the closing minutes of the first presidential debate tonight, Donald Trump’s attacks on Kamala Harris took an odd, highly specific, and highly Teutonic turn. It might not have made sense to many viewers, but it fit into the overall debate’s unusually substantive focus on energy policy.
“You believe in things that the American people don’t believe in,” he said, addressing Harris. “You believe in things like, we’re not gonna frack. We’re not gonna take fossil fuel. We’re not gonna do — things that are going to make this country strong, whether you like it or not.”
“Germany tried that and within one year, they were back to building normal energy plants,” he continued. “We’re not ready for it.”
What is he talking about? Let’s start by stipulating that Harris has renounced her previous support for banning fracking. During the debate, she bragged that the United States has hit an all-time high for oil and gas production during her vice presidency.
But why bring Germany into it? At the risk of sane-washing the former president, Trump appears to be referencing what German politicians call the Energiewiende, or energy turnaround. Since 2010, Germany has sought to transition from its largest historic energy sources, including coal and nuclear energy, to renewables and hydropower.
The Energiewiende is often discussed inside and outside of Germany as a climate policy, and it has helped achieve global climate goals by, say, helping to push down the global price of solar panels. But as an observant reader might have already noticed, its goals are not entirely emissions-related: Its leaders have also hoped to use the Energiewiende to phase out nuclear power, which is unpopular in Germany but which does not produce carbon emissions.
The transition has accomplished some of its goals: The country says that it is on target to meet its 2030 climate targets. But it ran into trouble after Russia invaded Ukraine, because Germany obtained more than half of its natural gas, and much of its oil and coal besides, from Russia. Germany turned back on some of its nuclear plants — it has since shut them off again — and increased its coal consumption. It also began importing fossil fuels from other countries.
In order to shore up its energy supply, Germany is also planning to build 10 gigawatts of new natural gas plants by 2030, although it says that these facilities will be “hydrogen ready,” meaning that they could theoretically run on the zero-carbon fuel hydrogen. German automakers, who have lagged at building electric vehicles, have also pushed for policies that support “e-fuels,” or low-carbon liquid fuels. These fuels would — again, theoretically — allow German firms to keep building internal combustion engines.
So perhaps that’s not exactly what Trump said, to put it mildly — but it is true that to cope with the Ukraine war and the loss of nuclear power, Germany has had to fall back on fossil fuels. Of course, at the same time, more than 30% of German electricity now comes from wind and solar energy. In other words, in Germany, renewables are just another kind of “normal energy plant.”