Chris Wright Swoops In to Defend the LPO

Current conditions: Tropical Storm Barbara has weakened from hurricane strength and is heading northwest, away from Mexico • A heat advisory is in place for the Sacramento Valley in California, with temps expected to top 100 degrees Fahrenheit Tuesday night • Severe thunderstorms will bring heavy rain to the Southeast today.

THE TOP FIVE

1. Chris Wright is negotiating with Congress to save the LPO

If the U.S. is going to lead on nuclear power, the “best way to get shovels in the ground” is for the Department of Energy’s Loan Programs Office to provide low-cost debt, Secretary of Energy Chris Wright said during an interview at a conference on Monday. The budget reconciliation bill that passed the House last month would gut the LPO’s budget to provide such loans. Wright accused the Biden administration of abusing its lending authority and giving the office a bad name. “I’m in a little bit of a negotiation trying to keep it around,” Wright said, adding that he saw opportunities to support transmission lines and critical mineral projects in addition to nuclear. “It will be around, the question is just going to be the scale and scope of how much we can do with the Loan Programs Office.” The Senate Energy committee is expected to release its own proposal for the LPO in the budget reconciliation bill as soon as today.

Wright at the White House in April.Andrew Harnik/Getty Images

2. RIP Atlantic Shores

Last fall, Heatmap named Atlantic Shores, a 2,800-megawatt proposed wind farm off the coast of northern New Jersey, one of the most at-risk projects of the energy transition. Eight months later, Atlantic Shores is officially dead. The developer submitted a filing to New Jersey regulators seeking to terminate its agreement to sell power into the state. The move came after the oil giant Shell pulled out of the project in January, and the Trump administration revoked its air permits in March. The administration’s anti-wind actions have forced the company “to materially reduce its personnel, terminate contracts, and cancel planned project investments,” the filing says.

3. LCOE is so yesterday

A new report from the Clean Air Task Force argues that the “levelized cost of energy,” the dominant metric used to make financial comparisons between energy sources, is not fit for purpose in today’s discussions about meeting power demand. The calculation covers capital and operating costs, but it does not take into account increasingly important factors such as when the power is available (i.e. not at night, for solar without batteries, which represent an additional cost), and whether it will require new transmission lines or upgrades. While LCOE can illustrate that solar has gotten cheaper over time, it can’t say what will most economically serve the needs of the grid in a given region, my colleague Matthew Zeitlin explains.

4. Sunnova declares bankruptcy

Rooftop solar company Sunnova has filed for chapter 11 bankruptcy protection after laying off just over half its staff last week, its second major round of layoffs this year. The news came shortly after Solar Mosaic, a residential solar financing company, also filed for bankruptcy. Between high interest rates that are cratering demand and policy uncertainty due to proposals in Washington to kill solar subsidies, the industry is in turmoil. Sunnova asserted that the bankruptcy filing “is not expected to have a material effect on our servicing operations for existing customers.” More on what this all means for customers in my story from yesterday.

5. Opponents say Texas well application is no good

The Environmental Protection Agency on Monday proposed approving Texas’ application to regulate carbon dioxide injection wells, kicking off a 45-day comment period. If its application is approved, Texas would become the fifth state to be granted oversight of such “class VI” wells at the state level, following North Dakota, Wyoming, Louisiana, and West Virginia. Last year, a group of Texas Democrats sent a letter to the agency advising it to reject Texas’ application due to the state’s history of poor enforcement. The EPA had opened a probe into the state’s oversight of other types of injection wells after a petition from environmental groups said Texas had failed to protect groundwater. The agency will hold one virtual public hearing on the decision on July 24.

THE KICKER

Automakers are pivoting en masse to hybrids as federal support for EVs is thrown in reverse. “The unprecedented EV head-fake has wreaked havoc on product plans,” Bank of America analysts wrote in a recent report. “The next four+ years will be the most uncertain and volatile time in product strategy ever.”