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A federal judge in Massachusetts ruled that construction on Vineyard Wind could proceed.
The decision marks the Trump administration’s second offshore wind defeat this week.
A federal court has once again allowed Orsted to resume construction on its offshore wind project.
The administration has already lost once in court wielding the same argument against Revolution Wind.
The administration argued in the name of national defense — but Orsted had receipts.
A judge has lifted the administration’s stop-work order against Revolution Wind.
Lower borrowing costs aren’t enough to erase the threat of tariffs and Trump.
It won’t rescue the renewables industry, but at least it’s something.
The Federal Reserve announced today that it will cut the federal funds rate by 0.25 percentage points, bringing it down to between 4% and 4.25%. Fed officials also projected quarter-point rate cuts at the last two meetings of the Federal Open Markets Committee this year.
This may provide some relief to renewables developers and investors, who are especially sensitive to financing costs. “On the financing side, high rates are never going to be exactly a good thing,” Advait Arun, a climate and infrastructure analyst at the Center for Public Enterprise, told me. “I think in this case, it’s going to be good that we’re finally seeing cuts.”
Because the fuel for solar and wind energy is essentially free, the lion’s share of the cost to develop these energy sources comes up front, meaning that interest rates can have a disproportionate effect on how projects pencil out. Renewable projects also tend to carry more debt than fossil fuel projects, according to energy consultancy Wood Mackenzie. When interest rates rise by 2 percentage points, the consultancy estimated, the levelized cost of electricity for renewables rises by 20%, compared to 11% for a gas-fired power plant, which might have higher operating costs but less need to borrow.
But the challenges for the renewables industry go well beyond financing. Developers are still wondering how they will be able to use Chinese-linked components without losing eligibility for clean energy tax credits. Those tax credits now come with a ticking clock after the passage of this summer’s One Big Beautiful Bill Act, which shortened the eligibility period for wind and solar projects. The Treasury Department also tightened the definition of what it means to “start construction,” making qualification even more of a race. All the while, the Trump administration’s regulatory assault on the sector, especially wind, has led to project cancellations across the industry.
“High interest rates obviously impact the business, but there are a lot of other headwinds and other things going wrong, as well,” Gautam Jain, a senior research scholar at the Center on Global Energy Policy at Columbia University, told me. “If anything, compared to the beginning of the year, rates have come down quite a bit.”
Maheep Mandloi, an analyst at the investment bank Mizuho Securities, wrote in a note to clients that renewable stocks rose last week in part because investors saw yields falling on 10-year government bonds. Ten-year Treasuries are a widely used benchmark for corporate debt, and when they get cheaper, it often means that companies can access financing more cheaply.
Falling 10-year yields are also a sign that the market anticipates a Fed rate cut. So far this year, the 10-year Treasury bond yield has fallen from 4.57% to 4.00% as of Wednesday afternoon after the rate cut was announced.
Lower borrowing costs are a welcome transition for the industry. Borrowing costs started to rise dramatically in 2022, as the Fed hiked interest rates to combat the worst inflation the U.S. had seen since the early 1980s. Annual price increases had been bouncing around or even below 2% since the 2008 recession before climbing to as high as 9% in the summer of 2022, following Russia’s invasion of Ukraine, which led to an energy price shock. The uneven and stimulus-fueled economic recovery from Covid-19 also created price instability throughout the economy, including the renewable energy industry.
Renewable energy businesses in particular were hammered by higher interest rates, as well as higher costs for commodities like steel and for final products like solar panels.
Even as unprecedented government support flowed into the renewables industry from the Inflation Reduction Act, signed in August 2022, clean energy stocks continued to stagnate, with the iShares Clean Energy ETF falling over 30% from the beginning of the Biden administration through the end of 2023. (Despite the assault from the Trump administration, the index has actually risen about 30% so far this year after falling in the fall and winter of 2024, as uncertainty around the IRA’s tax credits has dissipated.)
One of the poster children for renewables dysfunction is the Danish wind developer Orsted, which has been a victim of just about every brickbat thrown at the industry. In its most recent financial statement, the company said that its future earnings estimates were imperiled by “assumptions with major uncertainty,” which included “investment tax credits, interest rates, imposed tariffs in the U.S., and the supply chain.”
Home solar giant Sunrun, too, has cited financing stresses. In its most recent quarterly report, the company disclosed that “rising interest rates, including recent historic increases starting in 2021 … [are] reducing the proceeds we receive from certain Funds.” It also acknowledged that “because our financing structure is sensitive to volatility in interest rates, higher rates increase our cost of capital and may decrease the amount of capital available to us to finance the deployment of new solar energy systems.” High rates, the company disclosed, “have impacted and may continue to impact our business and financial results.”
Even as rates come down, the renewable industry still has the Trump administration to contend with. The various agencies of the executive branch have shown little hesitation about getting in the way of renewable energy development, even for projects that are already nearly complete. The Treasury Department also has yet to issue guidance on complying with OBBBA’s rules about sourcing from Chinese suppliers, prolonging uncertainty for many in the industry. Trump’s tariff policy, too, remains a potential wildcard, as developers await a Supreme Court ruling on the legality of the president’s efforts thus far.
“In terms of being able to build more supply with the benefit of lower financing costs,” Arun told me, “I think this is where we’re running into all of the issues with delays in procuring components — the uncertainty regarding whether the tariffs will be struck down or not, and of course, changes to the inflation Reduction Act through the OBBBA.”
Last week, analysts at Rhodium Group projected that Trump’s policies could slow U.S. progress on reducing emissions by more than half.
For renewables developers, the rate cuts may be welcome, but everything else — and there’s a lot of everything else — may be what really matters, Jain told me. “All those things add additional uncertainty, and anybody who’s in the space will be aware that more could come,” he said. “Of course, lower rates will help, but it’s a combination of the two.”
You might even call the Energy Secretary ... Chris Wrong.
I resent, as a rule, any news story about a politician’s social media presence. The social media post is simultaneously the lowest form of political communication and, for the journalist, the lowest hanging fruit. It is too easy to sit at your laptop, read tweets, and then write about them.
But I speak for hundreds of engineers, policy wonks, and hangers-on across the world of energy and climate when I ask: What the heck is happening with Chris Wright’s Twitter account?
Chris Wright is the current Secretary of Energy; before his appointment, he was the chief executive officer of Liberty Energy, the country’s second largest fracking company. He has been by far the most publicity-seeking member of President Trump’s energy policy team. He has helped oversee the president’s somewhat contradictory goals of seeking to reduce energy costs for Americans, support domestic fossil fuel companies, get OPEC to drill more, export as much natural gas as possible, and block the construction of new large-scale transmission lines and wind farms.
His substantive policy work is the focus of many other articles on Heatmap. For now, I want to focus on his and his department’s unpredictably confused political communications.
It began with the Department of Energy on the social network X. Several weeks ago, I started to conclude that the official agency account must have at least two authors. One of these people is familiar with how federal agencies usually speak — even if they add a small Trumpian flourish:
The other enjoys capitalizing verbs and has only a vague grasp of economic history:
One could nitpick here — “planes,” in the mid-1800s? — but there is no need to do so. As time has gone on, the official Energy Department account has begun to make more meaningful errors.
On Monday, for instance, the official DOE account proclaimed: “6 gigawatts of AMERICAN NUCLEAR ENERGY added to our grid!”
Six gigawatts of new nuclear energy is a lot. It took 11 years to build two new nuclear reactors at Plant Vogtle in Georgia, and that project added only 2.2 gigawatts. But the U.S. did not really add 6 gigawatts. In reality, the Tennessee Valley Authority had signed a confidential memo to eventually develop up to 6 gigawatts of modular nuclear reactor capacity. The memo contained no project timeline or financial terms. These 6 gigawatts remain, in other words, largely hypothetical.
As X users will know, some especially erroneous posts now get a “community note,” a community correction of sorts containing “important context” or an outright fact check written by other users. These notes are supposed to contain a link to an authoritative source. The Energy Department “6 gigawatts” tweet is the first post I’ve ever seen to get a community note linking to a news story also linked to in the post itself.
But this is not the end of the foolishness. Take this claim, from last week:
This is just not a very sophisticated thing to say. It is true that wind and solar pose a distinct reliability challenge for power grids, and that grid engineers have expended time and effort thinking about how to manage that challenge. It is even true that advocates sometimes downplay these challenges. But it is not true that these technologies — or the power they generate — are “essentially worthless.” Grid-scale batteries, for instance, exist; they can store energy during the day and then release it onto the grid at times of peak demand. Transmission lines — like the sizable Grain Belt Express project, which was due to receive a federal loan guarantee until Wright canceled the funding — can also help manage these resources.
But perhaps such errors are forgivable when they come from an official account. What’s odd is that the secretary’s own account has made even stranger errors:
I had to reread this post several times to make sure I understood it correctly. Even then, I didn’t believe I had the right interpretation until the internet energy pundit Alex Epstein clarified it.
At first, I thought Wright was making some technical argument about how solar panels will never be able to meet total global energy demand. This would not have been true, but at least it would have been sort of interesting. No, per Epstein, what Wright was trying to communicate is that if you coated the world in solar panels, you would only produce electricity. And since electricity makes up 20% of the world’s total energy use today, “you would” — as Wright says “only be producing 20% of global energy.”
Never mind that if you did cover the world with solar panels (which would, to be clear, be a very bad idea), you would in fact produce vastly more energy than the global economy consumes today. Never mind that if you even covered half or a quarter of the world with solar panels (still a bad idea), you would obviously shift the economics of electricity — so that you could then, for instance, use the excess power to synthesize liquid fuel replacements for use in cars, ships, planes, etc. Never mind that, by one estimate, a single solar farm the size of New Mexico would meet the world’s electricity demand. (Building this would also be a bad idea, but not nearly as bad as the others.)
No, Wright is not saying any of that. What Wright is saying is the far more inane thought that solar panels only generate electricity, and the global economy does not only run on electricity. Thank you for that insight, Mr. Secretary.
Perhaps Wright does not know much about renewables; he was, after all, a fracking executive until recently. But his account is also curiously mistaken about fossil fuels:
This tweet is somehow wrong twice — it understates our own accomplishments. The United States is already the world’s powerhouse of natural gas. It has held that position since the first Obama administration, when it surpassed Russia to become the leading producer of natural gas globally. It became the world’s largest exporter of liquified natural gas in 2023.
Natural gas, however, is not the world’s fastest growing source of energy; it is merely the fastest growing source of fossil fuel energy. The fastest growing energy source — of any kind — is solar photovoltaics. Solar generation grew by an astounding 30% from 2023 to 2024, according to the International Energy Agency. By a slightly different metric, renewables (which include wind) grew by 6% last year, while natural gas grew by 2.7%, per the IEA.
It is worth reading some of the replies to Wright’s solar tweet; what you see are plenty of Trump-friendly (or at least Trump-agnostic) accounts raising their eyebrows at his clownishness. Fossil nerds, based tech bros, even AI experts are raising their eyebrows and asking: Surely the Energy Secretary couldn’t be this, well, ignorant?
I can’t claim to know what’s happening in Wright’s mind. But I do know what’s happening with his policy — and this weak messaging, in my view, points to the intractability of Wright’s position. On the one hand, Wright leads the Trump administration’s energy policy, and that policy is now dominated by a culture war against any type of electricity generation that doesn’t, in some way, “own the libs” — meaning coal, natural gas, and nuclear. The government has arbitrarily halted offshore wind construction, blocked hundreds of millions in funding, and yanked approvals away from nearly complete projects. Even if Wright believes that offshore wind is ill-advised, this kind of interference with businesses and contracts is even more costly — it is not how someone acts when he is focused on energy affordability above all.
On the other hand, Wright represents that quadrant of the modern Republican Party that remains focused (however feebly) on technological development and economic growth. This cohort champions artificial intelligence and American re-industrialization; they want an abundance of cheap energy; they fear a rising China. They are also alert and informed enough to realize that China must be doing something right — otherwise it wouldn’t be industrializing so quickly — and that a country that can add 256 gigawatts of electricity in six months without breaking a sweat will probably find some useful way to use it.
Between these two poles, Wright must scurry. So he insists that the Trump administration is working to add as much electricity capacity as possible for AI, and brags that AI turns electricity into intelligence, then qualifies that only some types of electricity generation are good for AI:
He says that AI “is going to massively empower the human mind” and transform the economy, but adds implicitly that this can only come under certain conditions, which don’t involve power lines that irritate farmers, wind farms that trouble the president, or the fastest-growing new source of power on the planet. He calls AI “the Manhattan Project of our time” and says that therefore the government needs to get out of the way.
It is an act that has worked, up to a point, so far. But Wright’s public performance of his complicated role can only go on for so long. Everyone who enters the Trump administration imagines that they will do so with their public image and integrity intact. Not everyone can pull it off.
