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Sparks

The Mad Dash to Lock Down Biden’s Final Climate Dollars

Companies are racing to finish the paperwork on their Department of Energy loans.

A clock and money.
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Of the over $13 billion in loans and loan guarantees that the Energy Department’s Loan Programs Office has made under Biden, nearly a third of that funding has been doled out in the month since the presidential election. And of the $41 billion in conditional commitments — agreements to provide a loan once the borrower satisfies certain preconditions — that proportion rises to nearly half. That includes some of the largest funding announcements in the office’s history: more than $7.5 billion to StarPlus Energy for battery manufacturing, $4.9 billion to Grain Belt Express for a transmission project, and nearly $6.6 billion to the electric vehicle company Rivian to support its new manufacturing facility in Georgia.

The acceleration represents a clear push by the outgoing Biden administration to get money out the door before President-elect Donald Trump, who has threatened to hollow out much of the Department of Energy, takes office. Still, there’s a good chance these recent conditional commitments won’t become final before the new administration takes office, as that process involves checking a series of nontrivial boxes that include performing due diligence, addressing or mitigating various project risks, and negotiating financing terms. And if the deals aren’t finalized before Trump takes office, they’re at risk of being paused or cancelled altogether, something the DOE considers unwise, to put it lightly.

“It would be irresponsible for any government to turn its back on private sector partners, states, and communities that are benefiting from lower energy costs and new economic opportunities spurred by LPO’s investments,” a spokesperson wrote to me in an email.

The once nearly dormant LPO has had a renaissance under the Biden administration and the office’s current director, Jigar Shah. The Inflation Reduction Act supercharged its lending authority to $400 billion, from just $40 billion when Biden took office. Then a week after the election, the office announced that it had recalibrated its risk estimates for the loan guarantees that it makes under the Energy Infrastructure Reinvestment program, which works to modernize and repurpose existing energy infrastructure to make it cleaner and more energy efficient. As the office explained, these projects “may reflect a relatively moderate risk profile in comparison to typical projects LPO finances with higher project risk.” When there’s less risk involved, LPO doesn’t have to set aside as much money to cover a possible default, which in this case has allowed the office to more than quadruple its funding for qualifying projects.

It’s not just that LPO staffers are working fast, though that’s part of it — it’s also that loan beneficiaries have picked up their pace in responding to the LPO. As Shah emphasized today at the LPO’s second annual Demonstrate Deploy Decarbonize conference, finalizing conditional commitments largely depends on companies getting their ducks in a row as quickly as possible. “I do think that right now borrowers are sufficiently motivated to move more quickly than they have probably a year ago,” Shah said. “It's up to the borrowers. Our process hasn’t changed. Their ability to move through it faster is in their control.”

Shah noted that though timelines may be accelerating, the office’s due diligence procedures have remained the same. Thus far, the project that has moved the fastest from a conditional commitment to a finalized loan was for a clean hydrogen and energy storage facility in Utah. That took 43 days, and there are 46 left in Biden’s presidency. Let’s see what the LPO can do.

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Sparks

Rhizome Raises $6.5 Million for AI Grid Resilience

The company will use the seed funding to bring on more engineers — and customers.

Power lines.
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As extreme weather becomes the norm, utilities are scrambling to improve the grid’s resilience, aiming to prevent the types of outages and infrastructure damage that often magnify the impact of already disastrous weather events. Those events cost the U.S. $182 billion in damages last year alone.

With the intensity of storms, heat waves, droughts, and wildfires growing every year, some utilities are now turning to artificial intelligence in their quest to adapt to new climate realities. Rhizome, which just announced a $6.5 million seed round, uses AI to help assess and prevent climate change-induced grid infrastructure vulnerabilities. It’s already working with utilities such as Avangrid, Seattle City Light, and Vermont Electric Power Company to do so.

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Don’t Look Now, But China Is Importing Less Coal

Add it to the evidence that China’s greenhouse gas emissions may be peaking, if they haven’t already.

A Chinese coal worker.
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Exactly where China is in its energy transition remains somewhat fuzzy. Has the world’s largest emitter of greenhouse gases already hit peak emissions? Will it in 2025? That remains to be seen. But its import data for this year suggests an economy that’s in a rapid transition.

According to government trade data, in the first fourth months of this year, China imported $12.1 billion of coal, $100.4 billion of crude oil, and $18 billion of natural gas. In terms of value, that’s a 27% year over year decline in coal, a 8.5% decline in oil, and a 15.7% decline in natural gas. In terms of volume, it was a 5.3% decline, a slight 0.5% increase, and a 9.2% decline, respectively.

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Rewiring America Slashes Staff Due to Trump Funding Freeze

The nonprofit laid off 36 employees, or 28% of its headcount.

Surprised outlets.
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The Trump administration’s funding freeze has hit the leading electrification nonprofit Rewiring America, which announced Thursday that it will be cutting its workforce by 28%, or 36 employees. In a letter to the team, the organization’s cofounder and CEO Ari Matusiak placed the blame squarely on the Trump administration’s attempts to claw back billions in funding allocated through the Greenhouse Gas Reduction Fund.

“The volatility we face is not something we created: it is being directed at us,” Matusiak wrote in his public letter to employees. Along with a group of four other housing, climate, and community organizations, collectively known as Power Forward Communities, Rewiring America was the recipient of a $2 billion GGRF grant last April to help decarbonize American homes.

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