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I apologize in advance for what I’m about to say, but if you care about the transition to clean energy, it’s high time to pay attention to building energy codes.
The Senate will soon debate an amendment to a must-pass federal budget bill submitted by Marco Rubio, the Republican senator from Florida, that would allow the developers of hundreds of thousands of new homes to eschew modern building standards and instead follow an energy code over a decade old.
I get it. Words like “standards” and “codes” might not excite you the way a new climate policy or techno fix might. But they should, because building energy codes are climate policy and techno fixes wrapped into one.
Building lifespans often exceed 50 years. Requiring new buildings to adopt the most effective energy-saving designs would keep us from digging ourselves into a deeper emissions hole with long-lived, energy-intensive infrastructure. Anything built to weak standards today would make it harder to generate enough clean energy to get the country off fossil fuels, and saddle residents with higher utility bills far into the future. Plus, it’s much more expensive to make a building more efficient later than it is to integrate energy-saving measures from the start.
“We all win with new energy standards,” said Jonathan Horowitz, director of policy for the Housing Assistance Council, a nonprofit that advocates for affordable housing in rural America, during a press call on Monday.
The world of building codes is quite confusing — another reason they tend to go overlooked. But here’s what’s happening.
In 2021, a nonprofit aptly named the International Code Council adopted a new “model” building energy and conservation code. The group was formed in the 1990s to consolidate disparate regional efforts to develop building codes around the United States. Now, many states and local governments simply pay a fee to adopt the ICC’s model code, which is updated every three years, rather than spending time and resources writing and amending their own. (Governments in several other countries have also adopted the ICC’s codes, hence the name.)
The ICC’s energy and conservation code incorporates some of the most up-to-date information on how to ensure that a building’s design — including its walls, floors, ceilings, lighting, windows, doors, and ducts — minimize the building’s energy use.
There are no nationwide minimum building energy standards in the United States. The closest thing we have is the Department of Housing and Urban Development’s rules for federally-backed mortgages, which require newly-built homes to adhere to certain standards in order for buyers to qualify for loans. But the agency is still using the ICC’s 2009 energy code.
The rules don’t let all new construction off the hook. For example, many states and local governments require builders to adhere to more recent iterations of the ICC model code. But a number of states have yet to adopt the latest version — and others have fallen very behind. Arkansas and Kentucky, for example, also use the ICC energy code from 2009. Some states, like Arizona and Kansas, don’t have any state-level building code, leaving it entirely up to municipalities whether or not to instate one.
Since developers have an incentive to make sure their customers have access to federal loans, updating the HUD code could have a big impact.
Earlier this year, HUD proposed adopting the ICC’s new 2021 code. The agency estimated that the change would affect some 168,000 housing units per year, and reduce carbon emissions by 2.2 million metric tons compared to the existing rules. Though it would slightly increase the cost of development, it would yield net average savings to consumers of about $500 per year for single family homes. Buyers of new apartment units could save $6,000 over the course of their mortgage.
But Rubio’s amendment would strip the agency’s funding to implement the higher efficiency standards. “Housing affordability is at a 40 year low,” a Rubio spokesperson told me by email. “The Biden administration’s new rules will cost Americans tens of thousands of dollars, especially at today’s interest rates. No one should be surprised Senator Rubio is fighting for lower housing costs.”
The Huffington Post reported last week that as representative of the second most valuable real estate market in the country, Rubio has received more donations from the homebuilding industry’s political action committees than any other senator over the past two election cycles. The National Association of Home Builders also wrote the senator a letter in September stating that “now is not the time to create or support additional regulations that add more uncertainty, delays, or costs to the home building process.”
The amendment will be considered by the Senate in the coming weeks as the temporary budget deal Congress passed to avert a government shutdown winds down and the body moves to finalize a 2024 budget. The bill that the amendment has been tacked onto currently has bipartisan support, but that’s likely to change now, meaning it could contribute to the risk of another government shutdown.
Get ready for more energy code fun ahead.
Editor's note: A previous version of this article included Louisiana in a list of states that use an older building energy code. It switched to a newer version earlier this year. The article has been corrected. We regret the error.
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Today’s sit-down is with Nikhil Kumar, a program director at GridLab and an expert in battery storage safety and regulation. Kumar’s folks reached out to me after learning I was writing about Moss Landing and wanted to give his honest and open perspective on how the disaster is impacting the future of storage development in the U.S. Let’s dive in!
The following is an abridged and edited version of our conversation.
So okay – walk me through your perspective on what happened with Moss Landing.
When this incident occurred, I’d already been to Moss Landing plenty of times. It caught me by surprise in the sense that it had reoccurred – the site had issues in the past.
A bit of context about my background – I joined GridLab relatively recently, but before that I spent 20 years in this industry, often working on the integrity and quality assurance of energy assets, anything from a natural gas power plant to nuclear to battery to a solar plant. I’m very familiar with safety regulation and standards for the energy industry, writ large.
Help me understand how things have improved since Moss Landing. Why is this facility considered by some to be an exception to the rule?
It’s definitely an outlier. Batteries are very modular by nature, you don’t need a lot of overall facility to put battery storage on the ground. From a construction standpoint, a wind or solar farm or even a gas plant is more complex to put together. But battery storage, that simplicity is a good thing.
That’s not the case with Moss Landing. If you look at the overall design of these sites, having battery packs in a building with a big hall is rare.
Pretty much every battery that’s been installed in the last two or three years, industry has already known about this [risk]. When the first [battery] fire occurred, they basically containerized everything – you want to containerize everything so you don’t have these thermal runaway events, where the entire battery batch catches fire. If you look at the record, in the last two or three years, I do not believe a single such design was implemented by anybody. People have learned from that experience already.
Are we seeing industry have to reckon with this anyway? I can’t help but wonder if you’ve witnessed these community fears. It does seem like when a fire happens, it creates problems for developers in other parts of the country. Are developers reckoning with a conflation from this event itself?
I think so. Developers that we’ve talked to are very well aware of reputational risk. They do not want people to have general concern with this technology because, if you look at how much battery is waiting to be connected to the grid, that’s pretty much it. There’s 12 times more capacity of batteries waiting to be connected to the grid than gas. That’s 12X.
We should wait for the city and I would really expect [Vistra] to release the root cause investigation of this fire. Experts have raised a number of these potential root causes. But we don’t know – was it the fire suppression system that failed? Was it something with the batteries?
We don’t know. I would hope that the details come out in a transparent way, so industry can make those changes, in terms of designs.
Is there anything in terms of national regulation governing this sector’s performance standards and safety standards, and do you think something like that should exist?
It should exist and it is happening. The NFPA [National Fire Prevention Association] is putting stuff out there. There might be some leaders in the way California’s introduced some new regulation to make sure there’s better documentation, safety preparedness.
There should be better regulation. There should be better rules. I don’t think developers are even against that.
OK, so NFPA. But what about the Trump administration? Should they get involved here?
I don’t think so. The OSHA standards apply to people who work on site — the regulatory frameworks are already there. I don’t think they need some special safety standard that’s new that applies to all these sites. The ingredients are already there.
It’s like coal power plants. There’s regulation on greenhouse gas emissions, but not all aspects of coal plants. I’m not sure if the Trump administration needs to get involved.
It sounds like you're saying the existing regulations are suitable in your view and what’s needed is for states and industry to step up?
I would think so. Just to give you an example, from an interconnection standpoint, there’s IEEE standards. From the battery level, there are UL standards. From the battery management system that also manages a lot of the ins and outs of how the battery operates —- a lot of those already have standards. To get insurance on a large battery site, they have to meet a lot of these guidelines already — nobody would insure a site otherwise. There’s a lot of financial risk. You don’t want batteries exploding because you didn’t meet any of these hundreds of guidelines that already exist and in many cases standards that exist.
So, I don’t know if something at the federal level changes anything.
My last question is, if you were giving advice to a developer, what would you say to them about making communities best aware of these tech advancements?
Before that, I am really hoping Vistra and all the agencies involved [with Moss Landing] have a transparent and accountable process of revealing what actually happened at this site. I think that’s really important.
A climate tech company powered by natural gas has always been an odd concept. Now as it moves into developing data centers, it insists it’s remaining true to its roots.
Crusoe Energy has always been a confusing company, whose convoluted green energy credentials raise some eyebrows. It started as a natural gas-powered Bitcoin miner, then became a climate tech unicorn thanks to the fact that its crypto operations utilized waste gas that would have otherwise been flared into the atmosphere. It’s received significant backing from major clean tech investors such as G2 Venture Partners and Lowercarbon Capital. And it touts sustainability as one of its main selling points, describing itself as “on a mission to align the future of computing with the future of the climate,” in part by “harnessing large-scale clean energy.”
But these days, the late-stage startup valued at $2.8 billion makes the majority of its revenue as a modular data center manufacturer and cloud services provider, and is exploring myriad energy solutions — from natural gas to stranded solar and wind assets — beyond its original focus. Earlier this week, it announced that it would acquire more than 4 gigawatts of new natural gas capacity to power its data center buildout. It’s also heavily involved in the Trump-endorsed $500 billion AI push known as the Stargate Project. The company’s Elon Musk-loving CEO Chase Lochmiller told The Information that his team is “pouring concrete at three in the morning” to build out its Stargate Project data centers at “ludicrous speed.”
Some will understandably take a glance at this rising data center behemoth and wonder if climate tech is really an accurate description of what Crusoe actually does these days. As the steady drumbeat of announcements and press surrounding Crusoe’s partnerships and power deals has built up, I certainly wondered whether the company had pivoted to simply churning out data centers as quickly as possible. But investors — and the company itself — told me that’s far from true.
Clay Dumas, a partner at Lowercarbon Capital, which invested in the company’s $128 million Series B and $350 million Series C rounds, told me that Crusoe remains as mission-focused as ever. “When it comes to power, Crusoe is the most aggressive innovator in the AI infrastructure space,” Dumas said via text message. “There is no better team to integrate new energy sources for compute workloads so we don’t turn the whole world into one giant fracking operation.”
Ben Kortlang, a partner at G2 Venture Partners, which led the company’s Series C round, agreed, telling me that Crusoe is best positioned to build out data centers in a way that doesn’t “plant the seeds for 50 or 100 years of environmental damage.”
Yet it’s hard to pin down exactly what the energy mix will end up looking like for the high-profile data centers in Crusoe’s pipeline, including the complex it’s currently building for OpenAI, which is part of the Stargate project in Abilene, Texas. The company announced on Tuesday that it had started construction on the second phase of the facility, which expands the total scope from around 200 megawatts of power across two facilities to include a total of eight buildings over 4 million square feet, using 1.2 gigawatts of power. Crusoe’s spokesperson, Andrew Schmitt, declined to comment on whether this additional capacity would serve Stargate.
What Schmitt did confirm via email is that while the project has a 1.2 gigawatt grid interconnection — enough to meet the entirety of its power needs — Crusoe will also rely on natural gas as “backup energy,” as well as behind-the-meter energy solutions such as solar and battery storage to “create a highly optimized and efficient power plan for the full site.”
The company also won’t speculate on how much energy will come from each particular source. To some degree, the exact grid energy mix and what additional energy resources will get built is unknowable, though Schmitt told me that Crusoe chose Abilene for the area’s abundant wind resources. There’s often too much of it for the grid to handle, meaning the excess energy is curtailed or sold at a negative price. But if a large load — say, a Crusoe data center — were added to the grid, less renewable energy would go to waste, thereby increasing the profitability of renewables projects and incentivizing more buildout overall.
This strategy, Schmitt told me, “reflects [Crusoe’s] guiding principle of bringing load to stranded and under-utilized energy” rather than bringing energy sources to the data center load itself, as the industry has traditionally done. G2, the venture capital firm, is all in on this premise. “By putting a big load center right there in a fantastic renewable resource environment, the thing that will naturally get built is renewables,” Kortlang told me. “Crusoe doesn’t need to mandate that, or control that, or be the one building the renewables. They’re creating the demand.”
But this approach is only net-positive for the climate if it increases the share of renewables in the mix overall, i.e. if new, large loads are leading to more solar and wind buildout than new natural gas buildout. And while a renewables-heavy buildout seems to be what Crusoe and its investors are assuming will happen, Crusoe can’t actually control what gets put on the grid or the economic or political factors that drive those decisions.
It appears to be inevitable that gas will play some role, even if it’s providing power directly to the data center itself and not to the grid overall. According to Business Insider, public filings with the Texas Commission on Environmental Quality show that so far, Crusoe plans to operate on-site natural gas turbines at the Abilene facility totaling 360 megawatts of power. That represents 30% of the data center’s total 1.2 gigawatts of announced capacity.
Although powering data centers with new solar or wind is usually the cheapest option — especially in places like Abilene — building natural gas can be quicker and more reliable, assuming you’re able to acquire the severely backlogged turbines. That’s something Kortlang readily acknowledged to me. “We will see a lot of buildout of natural gas over the last half of this decade, because it’s the easiest thing to controllably build that gets you large amounts of baseload power quickly,” he said.
Kortlang didn’t seem fazed by Crusoe’s announcement this Monday that it’s pursuing a joint venture with the investment firm Engine No. 1, giving the company access to a whopping 4.5 gigawatts of natural gas power. To put that in perspective, there’s only about 25 gigawatts of existing data center capacity in the U.S. today. Schmitt told me this latest announcement is unrelated to the Stargate Project.
Engine No. 1 has secured seven GE Vernova natural gas turbines through a partnership with Chevron announced in January. As Chevron puts it, this joint development will create “scalable, reliable power solutions for United States-based data centers running on U.S. natural gas.” But critically, as Crusoe emphasized, “plans for these data centers include the use of post-combustion carbon capture systems,” which are designed to capture the CO2 from power plants after the fossil fuels are burned, but before they’re released to the atmosphere.
Presumably, these plans will also incorporate either some way to utilize the CO2 in industry or to permanently sequester it underground, though the company hasn’t mentioned anything to this effect. This technology hasn’t been a part of the company’s strategy in the past, though Kortlang told me that Crusoe has been evaluating the viability of carbon capture and storage for as long as G2 has been involved.
Gas-fired power plants paired with carbon capture have never really caught on, simply because they’re pretty much bound to cost more than not building carbon capture. When I asked Kortlang if this meant Crusoe was banking on its data center customers being willing to pay more for greener power, he told me that was “to be determined.” Who exactly was going to design and build the carbon capture technology — Crusoe, Chevron, or another to-be-named project partner — was also “to be determined.” But there’s not actually all that much time to figure it out. In Chevron’s announcement, the company said it was planning to deliver power by the end of 2027.
So, is Crusoe still a climate tech company? The answer seems to be yes — or at least it’s definitely still trying to be.
No other developer has been as diligent about utilizing stranded assets to power data centers. And with its expansion into carbon capture, it certainly seems Crusoe is leaning into an all-of-the-above approach to data center decarbonization. As Dumas told me, “before too long” we’ll also see Crusoe powering its operations with “geothermal, bioenergy, and after that fusion technologies that keep them out ahead of the pack.”
But Crusoe’s business model — and its clean tech bonafides in general — have always relied upon ultimately unprovable counterfactuals. First it was: If this waste gas weren’t powering Bitcoin mining, it would be vented into the atmosphere. That seemed fairly certain, since flaring is common practice in many areas. Now the company is pitching a somewhat fuzzier hypothetical: If this Crusoe data center, powered by some combination of natural gas and stranded renewables, were instead built by another company, it would inevitably be dirtier. Whether or not Crusoe is a boon for the climate ultimately depends upon the degree to which that unquantifiable claim ends up being true.
On Energy Transfer’s legal win, battery storage, and the Cybertruck
Current conditions: Red flag warnings are in place for much of Florida • Spain is bracing for extreme rainfall from Storm Martinho, the fourth named storm in less than two weeks • Today marks the vernal equinox, or the first day of spring.
A jury has ordered Greenpeace to pay more than $660 million in damages to one of the country’s largest fossil fuel infrastructure companies after finding the environmental group liable for defamation, conspiracy, and physical damages at the Dakota Access Pipeline. Greenpeace participated in large protests, some violent and disruptive, at the pipeline in 2016, though it has maintained that its involvement was insignificant and came at the request of the local Standing Rock Sioux Tribe. The project eventually went ahead and is operational today, but Texas-based Energy Transfer sued the environmental organization, accusing it of inciting the uprising and encouraging violence. “We should all be concerned about the future of the First Amendment, and lawsuits like this aimed at destroying our rights to peaceful protest and free speech,” said Deepa Padmanabha, senior legal counsel for Greenpeace USA. The group said it plans to appeal.
The Department of Energy yesterday approved a permit for the Calcasieu Pass 2 liquified natural gas terminal in Louisiana, allowing the facility to export to countries without a free trade agreement. The project hasn’t yet been constructed and is still waiting for final approvals from the independent Federal Energy Regulatory Commission, but the DOE’s green light means it faces one less hurdle.
CP2 was awaiting DOE’s go-ahead when the Biden administration announced its now notorious pause on approvals for new LNG export facilities. The project’s opponents argue it’s a “carbon bomb.” Analysis from the National Resources Defense Council suggested the greenhouse gases from the project would be equivalent to putting more than 1.85 million additional gas-fueled automobiles on the road, while the Sierra Club found it would amount to about 190 million tons of carbon dioxide equivalent annually.
President Trump met with 15 to 20 major oil and gas executives from the American Petroleum Institute at the White House yesterday. This was the president’s first meeting with fossil fuel bosses since his second term began in January. Interior Secretary Doug Burgum and Energy Secretary Chris Wright were also in the room. Everyone is staying pretty quiet about what exactly was said, but according to Burgum and Wright, the conversation focused heavily on permitting reform and bolstering the grid. Reuters reported that “executives had been expected to express concerns over Trump’s tariffs and stress the industry view that higher oil prices are needed to help meet Trump’s promise to grow domestic production.” Burgum, however, stressed that oil prices didn’t come up in the chat. “Price is set by supply and demand,” he said. “There was nothing we could say in that room that could change that one iota, and so it wasn’t really a topic of discussion.” The price of U.S. crude has dropped 13% since Trump returned to office, according to CNBC, on a combination of recession fears triggered by Trump’s tariffs and rising oil output from OPEC countries.
The U.S. installed 1,250 megawatts of residential battery storage last year, the highest amount ever and nearly 60% more than in 2023, according to a new report from the American Clean Power Association and Wood Mackenzie. Overall, battery storage installations across all sectors hit a new record in 2024 at 12.3 gigawatts of new capacity. Storage is expected to continue to grow next year, but uncertainties around tariffs and tax incentives could slow things down.
China is delaying approval for construction of BYD’s Mexico plant because authorities worry the electric carmaker’s technology could leak into the United States, according to the Financial Times. “The commerce ministry’s biggest concern is Mexico’s proximity to the U.S.,” sources told the FT. As Heatmap’s Robinson Meyer writes, BYD continues to set the global standard for EV innovation, and “American and European carmakers are still struggling to catch up.” This week the company unveiled its new “Super e-Platform,” a new standard electronic base for its vehicles that it says will allow incredibly fast charging — enabling its vehicles to add as much as 249 miles of range in just five minutes.
Tesla has recalled 46,096 Cybertrucks over an exterior trim panel that can fall off and become a road hazard. This is the eighth recall for the truck since it went on sale at the end of 2023.