You’re out of free articles.
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
Sign In or Create an Account.
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Welcome to Heatmap
Thank you for registering with Heatmap. Climate change is one of the greatest challenges of our lives, a force reshaping our economy, our politics, and our culture. We hope to be your trusted, friendly, and insightful guide to that transformation. Please enjoy your free articles. You can check your profile here .
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Subscribe to get unlimited Access
Hey, you are out of free articles but you are only a few clicks away from full access. Subscribe below and take advantage of our introductory offer.
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Create Your Account
Please Enter Your Password
Forgot your password?
Please enter the email address you use for your account so we can send you a link to reset your password:
The United Nations calls 24/7 carbon-free energy generation, also known as hourly matching, “the end state of a fully decarbonized electricity system.” It means that every kilowatt-hour of electricity consumed is matched with a zero-emissions electricity source, every hour of every day. It’s something that Google and Microsoft are aiming to implement by 2030, and it represents a much more significant climate commitment than today’s default system of annualized matching
So here’s a positive sign: LevelTen Energy, the leading marketplace for power purchase agreements, just raised $65 million in Series D funding, led by the investment firm B Capital with participation from Microsoft, Google, and Prelude Ventures, among others.
The money will help support LevelTen’s work with the Granular Certificate Trading Alliance, a collaboration it started last December in partnership with the Intercontinental Exchange, a data firm that operates global financial marketplaces. Together they’re building a platform for trading and managing “granular certificates,” hourly-matched energy certificates that will help corporations — and ideally the electricity sector at large — move to 24/7 hourly matching. Other partners to the alliance include Google, Microsoft, and the energy companies AES and Constellation.
To date, LevelTen has facilitated over $15.8 billion in power purchase agreements, asset sales, and other clean energy transactions, totaling over 7 gigawatts of clean energy. Overall, the company has raised more than $125 million, with past investors including the My Climate Journey Collective as well as the investment arms of oil and gas companies such as Equinor and TotalEnergies, which are adding renewables to their portfolios.
Bryce Smith, LevelTen’s founder and CEO, told me the platform will launch its first auctions for hourly-matched clean energy by the end of the year, with initial customers expected to be corporate partners like Google and Microsoft themselves.
“Corporates have been leading the way in a lot of respects and they're doing it again on the granular certificate front,” Smith said. He sees it as LevelTen’s job to get more industry players onboard by creating the transaction infrastructure to enable hourly matching. “So there's a bit of a ‘build it and they will come’ aspect to this,” he told me.
Realistically, though, it’s unlikely that the electricity industry will move towards 24/7 clean energy absent some serious incentives to do so. That’s why the Biden administration’s proposed hydrogen tax credit rules could be so powerful. They stipulate that to qualify for the largest IRA subsidies, clean hydrogen must be produced using a relatively new source of carbon-free electricity, generated within the same hour that it’s used and in roughly the same location. If these regulations aren’t deleted or seriously altered by this or another new administration (which they probably will be), power grids would have until 2028 to set up new systems for hourly accounting, thereby laying the groundwork for 24/7 matching across the electricity sector at large.
That potential, tenuous and unlikely though it may be, has LevelTen excited, and the company is leaning hard into hydrogen. LevelTen is a founding member of the Hydrogen Demand Initiative, a coalition formed by the Department of Energy to ensure that the clean hydrogen produced by the seven designated hydrogen hubs is actually sold. The DOE is allocating $1 billion to help catalyze demand, and it’s up to H2DI to figure out how to distribute that. “A component of that is figuring out how to bring buyers and sellers together easily and smoothly,” Smith told me. “And that's the role that we play in creating a marketplace where buyers and sellers can find each other and execute.”
Smith is aware that a change in administration could very well mean a change in the hydrogen tax credit rules, potentially decreasing incentives for green hydrogen and making hydrogen produced from natural gas with carbon capture and storage (“blue hydrogen”) or hydrogen produced without CCS (“gray hydrogen”) more attractive. He said the LevelTen platform would likely support transactions that involve a “variety of hydrogen colors and technologies.”
“What's most important for us always is figuring out how to put a vital technology on the fastest track to scaling,” Smith told me. “And if that means accommodating different colors for some period of time, we have the end goal [of green hydrogen] always in mind.”
As LevelTen scales, it’s also working to get more utilities onto its platform. Smith told me that utility customers have, “really only fairly recently realized that their procurement needs around renewables are massive.”As the push to “electrify everything” gains momentum and data centers suck up more and more power, utilities are increasingly investing in renewable energy to meet their electricity needs, diversify their portfolios and respond to customer demand for clean power. “We're used to seeing really slow, fairly predictable demand and electricity growth from a utility perspective, and that's changing pretty dramatically,” Smith told me.
LevelTen currently operates in 29 countries across North America and Europe, and hopes to use its recent funding to expand into new regions.
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
Three companies are joining forces to add at least a gigawatt of new generation by 2029. The question is whether they can actually do it.
Two of the biggest electricity markets in the country — the 13-state PJM Interconnection, which spans the Mid-Atlantic and the Midwest, and ERCOT, which covers nearly all of Texas — want more natural gas. Both are projecting immense increases in electricity demand thanks to data centers and electrification. And both have had bouts of market weirdness and dysfunction, with ERCOT experiencing spiky prices and even blackouts during extreme weather and PJM making enormous payouts largely to gas and coal operators to lock in their “capacity,” i.e. their ability to provide power when most needed.
Now a trio of companies, including the independent power producer NRG, the turbine manufacturer GE Vernova, and a subsidiary of the construction firm Kiewit Corporation, are teaming up with a plan to bring gas-powered plants to PJM and ERCOT, the companies announced today.
The three companies said that the new joint venture “will work to advance four projects totaling over 5 gigawatts” of natural gas combined cycle plants to the two power markets, with over a gigawatt coming by 2029. The companies said that they could eventually build 10 to 15 gigawatts “and expand to other areas across the U.S.”
So far, PJM and Texas’ call for new gas has been more widely heard than answered. The power producer Calpine said last year that it would look into developing more gas in PJM, but actual investment announcements have been scarce, although at least one gas plant scheduled to close has said it would stay open.
So far, across the country, planned new additions to the grid are still overwhelmingly solar and battery storage, according to the Energy Information Administration, whose data shows some 63 gigawatts of planned capacity scheduled to be added this year, with more than half being solar and over 80% being storage.
Texas established a fund in 2023 to provide low-cost loans to new gas plants, but has had trouble finding viable projects. Engie pulled an 885 megawatt project from the program earlier this week, citing “equipment procurement constraints” and delays.
But PJM is working actively with a friendly administration in Washington to bring more natural gas to its grid. The Federal Energy Regulatory Commission recently blessed a PJM plan to accelerate interconnection approvals for large generators — largely natural gas — so that it can bring them online more quickly.
But many developers and large power consumers are less than optimistic about the ability to bring new natural gas onto the grid at a pace that will keep up with demand growth, and are instead looking at “behind-the-meter” approaches to meet rising energy needs, especially from data centers. The asset manager Fortress said earlier this year that it had acquired 850 megawatts of generation capacity from APR Energy and formed a new company, fittingly named New APR Energy, which said this week that it was “deploying four mobile gas turbines providing 100MW+ of dedicated behind-the-meter power to a major U.S.-based AI hyperscaler.”
And all gas developers, whether they’re building on the grid or behind-the-meter, have to get their hands on turbines, which are in short supply. The NRG consortium called this out specifically, noting that it had secured the rights to two 7HA gas turbines by 2029. These kinds of announcements of agreements for specific turbines have become standard for companies showing their seriousness about gas development. When Chevron announced a joint venture with GE Vernova for co-located gas plants for data centers, it also noted that it had a reservation agreement for seven 7HA turbines. But until these turbines are made and installed, these announcements may all just be spin.
Featuring China, fossil fuels, and data centers.
As Republicans in Congress go hunting for ways to slash spending to carry out President Trump’s agenda, more than 100 energy businesses, trade groups, and advocacy organizations sent a letter to key House and Senate leaders on Tuesday requesting that one particular line item be spared: the hydrogen tax credit.
The tax credit “will serve as a catalyst to propel the United States to global energy dominance,” the letter argues, “while advancing American competitiveness in energy technologies that our adversaries are actively pursuing.” The Fuel Cell and Hydrogen Energy Association organized the letter, which features signatures from the American Petroleum Institute, the U.S. Chamber of Commerce, the Clean Energy Buyers Association, and numerous hydrogen, industrial gas, and chemical companies, among many others. Three out of the seven regional clean hydrogen hubs — the Mid-Atlantic, Heartland, and Pacific Northwest hubs — are also listed.
Out of all of the tax credits for low-carbon energy, the hydrogen subsidy, which was created by the 2022 Inflation Reduction Act, is among the most generous. It pays up to $3 per kilogram of hydrogen produced, depending on how emissions-intensive the process is. For context, a 15 ton-per-day plant in Georgia owned by hydrogen producer Plug Power has the potential to earn up to $45,000 per day in tax credits.
But the total price of the tax credit depends on how much clean hydrogen production takes off, and the industry is still in its infancy. When the Penn Wharton Budget Model, a research group at the University of Pennsylvania, estimated the fiscal impact of the Inflation Reduction Act, it placed the total cost for the hydrogen credit at $49 billion over 10 years, compared to more than $260 billion for renewable energy and nearly $400 billion for electric vehicles.
Tactically, Tuesday’s letter draws on all of the Trump administration’s favorite talking points. It warns that nixing the tax credit will mean ceding the hydrogen technology war to China, noting that the country now produces more than 60% of the global supply of electrolyzers — equipment that splits water into hydrogen and oxygen using electricity. It also says that hydrogen fuel cells are already being used by tech companies to power data centers.
And even though the tax credit was designed specifically to subsidize “clean” hydrogen, the letter mostly ignores this distinction, painting hydrogen production as an extension of the U.S. fossil fuel industry. Oil and gas companies have the infrastructure, workforce, and supply chains to lead the global hydrogen economy, it says. It points out that hydrogen can be produced from “natural gas, biogas, biomethane, as well as any electricity source (i.e. nuclear energy),” but does not mention wind, solar, or geothermal.
Investment in the nascent hydrogen industry was essentially on hold for more than two years while companies eager to take advantage of the tax credit waited for the Biden administration to finalize eligibility rules. But even after Biden’s Treasury Department published those rules in early January, how the Trump administration will view the program remained uncertain. “Our industry is now poised to invest billions of dollars in deployments and manufacturing facilities across the country,” the letter says. “However, that private sector investment is at risk due to the uncertainty around this crucial incentive … We need to ensure that we do not miss this hydrogen moment and respectfully request that you maintain the Section 45V tax credit.”
Intense debate and controversy surrounded the development of the rules for claiming the tax credit, and while the Biden administration tried to strike a compromise, some in the industry still found the rules too strict. I asked the Fuel Cell and Hydrogen Energy Association whether it wanted Congress to make any changes to the tax credit or to simply preserve it but hadn’t heard back as of publication time.
But some of the signatories have already expressed their intent to request changes. In December, the American Petroleum Institute sent a memo to the incoming Treasury Department outlining its key priorities and “asks.” It says the Biden administration’s hydrogen tax credit rules were “overly restrictive and raised concerns about qualifying pathways for natural gas.”
Core inflation is up, meaning that interest rates are unlikely to go down anytime soon.
The Fed on Wednesday issued a report showing substantial increases in the price of eggs, used cars, and auto insurance — data that could spell bad news for the renewables economy.
Though some of those factors had already been widely reported on, the overall rise in prices exceeded analysts’ expectations. With overall inflation still elevated — reaching an annual rate of 3%, while “core” inflation, stripping out food and energy, rose to 3.3%, after an unexpectedly sharp 0.4% jump in January alone — any prospect of substantial interest rate cuts from the Federal Reserve has dwindled even further.
Renewable energy development is especially sensitive to higher interest rates. That’s because renewables projects, like wind turbines and solar panels, have to incur the overwhelming majority of their lifetime costs before they start operating and generating revenue. Developers then often fund much of the project through borrowed money that’s secured against an agreement to buy the resulting power. When the cost of borrowing money goes up, projects become less viable, with lower prospective returns sometimes causing investors not to go forward .
High interest rates have plagued the renewables economy for years. “As interest rates rise, all of a sudden, solar assets that are effectively bonds become less valuable,” Quinn Pasloske, a managing director at Greenbacker, a renewable investor and operating company, told me on Tuesday, describing how the stream of payments from a solar project becomes less valuable as rates rise because investors can get more from risk-free government bonds.
The new inflation data is “consistent with our call of an extended Fed pause, with only one rate cut in 2025, happening in June,” Morgan Stanley economists wrote in a note to clients. Bond traders are also projecting just a single cut for the rest of the year — but not until December.
Federal Reserve Chair Jerome Powell told the Senate Banking committee Tuesday, “We think our policy rate is in a good place, and we don’t see any reason to be in a hurry to reduce it further.”
The yield for the 10-year Treasury bond, often used as a benchmark for the cost of credit, is up 0.09% today, to 4.63%. While this is below where yields peaked in mid-January, it’s a level still well above where yields have been for almost all of the last year. When Treasury yields rise, the cost of credit throughout the economy goes up.
Clean energy stocks were down this morning — but so is the overall market. Because while high interest rates are especially bad for renewables, they’re not exactly great for anyone else.