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Last Energy just raised a $40 million Series B.
Nuclear energy is making a comeback, conceptually at least. While we’re yet to see a whole lot of new steel in the ground, money is flowing into fusion, there’s a push to build more standard fission reactors, and the dream of small modular reactors lives on, even in the wake of the NuScale disappointment.
All this excitement generally revolves around nuclear’s potential to provide clean, baseload power to the grid. But Washington D.C.-based Last Energy is pursuing a different strategy — making miniature, modularized reactors to provide power directly to industries such as data centers, auto manufacturing, and pulp and paper production. Size-wise, think small modular reactors, but, well, even smaller — Last Energy’s units provide a mere 20 megawatts of electricity, whereas a full-size reactor can be over 1,000 megawatts. SMRs sit somewhere in between.
Today the company announced its $40 million series B round, led by the Austin-based venture capital firm Gigafund. Last Energy aims to deploy its first microreactor by 2026, and CEO and founder Bret Kugelmass told me the company has already reached commercial agreements for 80 units, all in Europe. Nearly half of these will be deployed at data centers, the notoriously energy hungry server farms powering the AI boom.
Kugelmass told me the goal is for Last Energy’s reactor to be transportable in the back of a truck. “We decided to focus most of our specific design criteria based on supply chain and logistics constraints,” he said. Every part of the system is “built in a factory, first tested in a factory, mass manufactured in a factory, and then snaps together like a Lego set out in the field.”
There are currently no operational microreactors anywhere in the Western world, though other companies, including Radiant, Westinghouse, and BWX Technologies are also trying to build one. Last Energy’s investors are betting, however, that it could be one of the first to market.
As of now, the company has reached the permitting stage for some of its European projects. Kugelmass told me that Wales, England, Poland, and Romania are the company’s top markets, and that the decision to start in Europe was mainly financial. “Energy is so expensive in Europe compared to the U.S. — I mean, we're talking like two, three times higher for the exact same thing that we're going to deliver. We can make two or three times more money.”
The company estimates that its reactors can be fully manufactured and assembled onsite within two years. And while Kugelmass wouldn’t reveal an exact price, he said Last Energy will be cost-competitive with solar or wind plus storage. Problem is, there’s not really any precedent that would indicate how realistic these targets are, and nuclear doesn’t exactly have the best track record when it comes to arriving on time or on budget.
At the very least, though, Kugelmass told me the reactor’s smaller size makes a meltdown “practically impossible,” meaning securing regulatory approval should be much simpler than it is for full-size plants. And building on the customer’s side of the meter also allows the company to supply power before it’s officially grid-connected, meaning Last Energy can work around the interminably long interconnection queues that plague the European clean energy market just as they do the U.S.
As manufacturing ramps, costs come down, and the U.S. Nuclear Regulatory Commission streamlines its process for approving new projects, Kugelmass told me he could see Last Energy entering the domestic market in a few years. After all, with American companies driving the boom in AI and cloud computing, the U.S. has far more data centers than anywhere else on earth. Last Energy has aggressive plans to meet that demand, aiming to deploy 10,000 reactors in the next 15 years.
“But it doesn't stop there, because that's still only like 1% of global energy,” Kugelmass told me, saying that Last Energy’s ultimate goal is to “fundamentally transform global energy.” But that’s for tomorrow. For the unglamorous now, some more prototypes and permits are in order.
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Elgin Energy Center is back from the dead.
At least one natural gas plant in America’s biggest energy market that was scheduled to shut down is staying open. Elgin Energy Center, an approximately 500 megawatt plant in Illinois approximately 40 miles northwest of downtown Chicago was scheduled to shut down next June, according to filings with the Federal Energy Regulatory Commission and officials from PJM Interconnection, the country’s largest regional transmission organization, which governs the relevant portion of the U.S. grid. Elgin’s parent company “no longer intends to deactivate and retire all four units ... at the Elgin Energy Center,” according to a letter dated September 4 and posted to PJM’s website Wednesday.
The Illinois plant is something of a poster child for PJM’s past few years. In 2022, it was one of many natural gas plants to shut down during Winter Storm Elliott as the natural gas distribution seized up. Its then-parent company, Lincoln Power — owned by Cogentrix, the Carlyle Group’s vehicle for its power business — filed for bankruptcy the following year, after PJM assessed almost $40 million in penalties for failing to operate during the storm. In June, a bankruptcy court approved the acquisition of the Elgin plant, along with one other, by Middle River Power, a generation business backed by Avenue Capital, a $12 billion investment firm, in a deal that was closed in December.
The decision to continue operating the plant past its planned deactivation comes as PJM set a new price record at its capacity auction in July, during which generators submitted bids for power that can be deployed when the grid is under stress due to high demand. The $14.7 billion auction was a massive jump from the previous one, which finished at just over $2 billion. Ironically, one reason the most recent auction was so expensive is that PJM gave less credit to natural gas generators for their capacity following Winter Storm Elliott, which then drove up auction prices, leading to large payouts for gas plants. PJM said the high auction prices were “caused primarily by a large number of generator retirements.”
In a bankruptcy court filing in 2023, Lincoln Power’s chief restructuring officer said that the company “was experiencing a liquidity crunch” due to low prices in past capacity auction, which meant that it had “received significantly less revenues for the capacity they sold in those Capacity Auctions as compared to previous Capacity Auctions.” With higher capacity revenues in PJM, presumably Elgin's business has improved.
Many analysts are skeptical that PJM can quickly get new load onto the system to bring prices down meaningfully in subsequent auctions — the next one is in December — and the PJM queue for new projects is absurdly clogged. This only juices the incentives for older fossil plants to stay open.
“This shortage of capacity is happening immediately,” Nicholas Freschi, senior associate at Gabel Associates, told me last week. “There might be more resources, and PJM might be able to coerce some retiring or not participating plants to make up for the shortfall. It’s an immediate problem.”
Neither Middle River nor its attorney representing the company before FERC returned requests for comment.
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.”
Hunter Biden also made an appearance in Trump’s answer to the debate’s one climate question.
Well, it happened — over an hour into the debate, but it happened: the presidential candidates were asked directly about climate change. ABC News anchor Linsey Davis put the question to Vice President Kamala Harris and former President Donald Trump, and their respective answers were both surprising and totally not.
Harris responded to the question by laying out the successes of Biden’s energy policy and in particular, the Inflation Reduction Act (though she didn’tmention it by name). “I am proud that as vice president, over the last four years, we have invested a trillion dollars in a clean energy economy,” Harris noted.
The vice president immediately followed this up, however, by pointing out that gas production has also increased to “historic levels,” under the Biden-Harris administration. This framing, highlighting an all-of-the-above approach to energy, is consistent with Harris’s comments earlier in the debate, whenshe claimed to support fracking and investing in “diverse sources of energy.” Harris went on to reiterate the biggest wins of the Inflation Reduction Act, namely, “800,000 new manufacturing jobs,” and shouted out her endorsement from the United Auto Workers and its President Shawn Fain.
Trump, who earlier in the debate called himself “a big fan of solar” before questioning the amount of land it takes up, started off his response by once again claiming that the Biden-Harris administration is building Chinese-owned EV plants in Mexico (they are not). Then Trump veered completely off topic and rounded out his answer by ranting about Biden (both Joe and Hunter). “You know, Biden doesn’t go after people because, supposedly, China paid him millions of dollars,” Trump noted. “He’s afraid to do it between him and his son, they get all this money from Ukraine.”
Trump’s answer included no reference to climate or clean energy — but it did include a shout out to “the mayor of Moscow’s wife,” so there’s that.