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The tech giant’s $650 million deal with Talen Energy has a lot to unpack.
When Talen Energy, which owns a 90% interest in the Susquehanna nuclear power plant in Northeastern Pennsylvania, announced it was selling a data center site adjacent to its power plant to Amazon Web Services, it raised some eyebrows in the energy world. The surprise was not because a large tech company made a big deal with a carbon-free power provider, or even that a tech company made a deal to buy power generated by a nuclear power plant. It was because Amazon was making this deal.
Amazon is a massive buyer of renewable power — it claims to be the world’s largest and says it’s responsible for 28 gigawatts of clean energy capacity — signing contracts with new wind and solar projects all over the world.
But a divide has opened up among tech giants when it comes to energy, with Amazon on one side and Alphabet and Microsoft on the other. The difference hinges on how much it matters where and when the new carbon-free power a company buys in order to match its electricity use.
What’s odd about the Talen deal is that it fits awkwardly into either approach, especially Amazon’s. Amazon does not count nuclear towards its renewable power goals, and in any case, it’s not a “new” source of carbon-free power. Instead, it allows Amazon to siphon somewhere between 480 and 960 megawatts of capacity from the 2,500 megawatt plant.
“Amazon needs power, they’re getting it at cheap rates. They don’t even want to talk about it like a climate thing,” Mark Nelson, the founder of Radiant Energy Group, told me.
In the past decade or so, technology companies have gone on a clean-power buying spree, funding new wind and solar projects all over the world. But there has been a divergence in what is thought to be the best way to go about it.
In 2019, Amazon announced a goal to add enough renewable power to the grid to match its own emissions by 2030 (since moved up to 2025) and to reach net zero by 2040.
Google has been 100% renewable in terms of buying clean power in the same amounts that it consumes since 2017. So in 2020, it set a new goal: to “run on 24/7 carbon-free energy on every grid where we operate by 2030.” This would mean not just matching total renewable purchases with total emissions, as Amazon is seeking to do, but also trying to get every hour of data center operation “matched” with an hour of renewable generation on the same grid.
Microsoft has a similar goal, and as a result, both companies have shown much more interest in nuclear power of late than is typical in the technology world.
“A huge bottleneck for growth for Amazon, Google, Microsoft, Facebook is access to constant electricity,” Nelson told me. Nuclear is a carbon-free electricity resource that can run at a steady output 24 hours a day, whereas wind and solar are both inherently variable.
Microsoft signed a deal with Constellation to supply power to data centers in Virginia and hired an official from the Tennessee Valley Authority to be its director of nuclear and energy innovations, while Microsoft founder Bill Gates and Sam Altman, the head of Microsoft-backed OpenAI have both invested in nuclear startups, as has Google.
Amazon’s approach — which it shares with several other large companies, including Meta — is not to match 24 hours of its operations with clean power bought locally, but rather to develop and purchase new wind and solar at the same scale of the power it consumes, especially in areas with dirty grids, thus matching the emissions from its consumption with the emissions reductions of new renewables projects. While a 24/7 matching approach may be naturally complementary with nuclear power, Amazon’s strategy doesn’t require it.
“We believe a focus on emissions is the fastest, most cost-effective and scalable way to leverage corporate clean energy procurement to help decarbonize global power grids at the fastest pace,” an Amazon spokesperson told me. “This includes procuring renewable energy in locations and countries that still rely heavily on fossil fuels to power their grids, and where energy projects can have the biggest impact on carbon reduction.”
Contracting out new renewable energy projects can have more bang for your buck in dirty grids, according to proponents of the Amazon philosophy, known as carbon matching. The hypothesis is that a renewable project in a fossil fuel-heavy grid will displace more dirty power than one that’s located near a datacenter in an already relatively clean grid like California or Washington State.
Princeton researchers who examined the carbon matching (Amazon) and temporal matching (Google and Microsoft) strategies argued that the carbon matching approach does not necessarily lead to more renewables — or less fossil fuels — on the grid than would have occurred in the absence of the tech companies, and thus does not actually greatly lower emissions. The temporal approach, on the other hand, can meaningfully displace fossil fuel power that would otherwise have to be on the grid to meet demand.
Nuclear advocates are clear-eyed that this deal won’t cause a new generating unit to sprout up out of the Susquehanna Valley. But they still see it as the kind of deal that can help ensure nuclear plants’ continued survival. Amazon’s $650 million buys it a 10-year agreement to purchase power from the plant, as well as “additional revenue from AWS related to sales of carbon-free energy to the grid,” which an Amazon spokesperson explained as a reference to the deal “ensur[ing] that the nuclear plant has stable revenues to continue generating clean power to the grid for the foreseeable future.”
Nelson, a passionate advocate for nuclear power, lamented the mass shutdown of nuclear power plants in the 2010s thanks to cheap natural gas knocking them out of power markets that didn’t value reliability or carbon-free energy. But now, he says, things are different.
“Now nuclear is getting valued for its climate properties, reliability, and low cost. We’re seeing nuclear plants cash in,” Nelson told me. “Long term PPAs with cold hard cash help me sleep better at night.”
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If the Senate reconciliation bill gets enacted as written, you’ve got about 92 days left to seal the deal.
If you were thinking about buying or leasing an electric vehicle at some point, you should probably get on it like, right now. Because while it is not guaranteed that the House will approve the budget reconciliation bill that cleared the Senate Tuesday, it is highly likely. Assuming the bill as it’s currently written becomes law, EV tax credits will be gone as of October 1.
The Senate bill guts the subsidies for consumer purchases of electric vehicles, a longstanding goal of the Trump administration. Specifically, it would scrap the 30D tax credit by September 30 of this year, a harsher cut-off than the version of the bill that passed the House, which would have axed the credit by the end of 2025 except for automakers that had sold fewer than 200,000 electric vehicles. The credit as it exists now is worth up to $7,500 for cars with an MSRP below $55,000 (and trucks and sports utility vehicles under $80,000), and, under the Inflation Reduction Act, would have lasted through the end of 2032. The Senate bill also axes the $4,000 used EV tax credit at the end of September.
“Long story short, the credits under the current legislation are only going to be on the books through the end of September,” Corey Cantor, the research director of the Zero Emission Transportation Association, told me. “Now is definitely a good time, if you’re interested in an EV, to look at the market.”
The Senate applied the same strict timeline to credits for clean commercial vehicles, both new and used. For home EV chargers, the tax credit will now expire at the end of June next year.
While EVs were on the road well before the 2022 passage of the Inflation Reduction Act, what the new tax credit did was help build out a truly domestic electric vehicle market, Cantor said. “You have a bunch of refreshed EV models from major automakers,” Cantor told me, including “more affordable models in different segments, and many of them qualify for the credit.”
These include cars produceddomestically by Kia,Hyundai, and Chevrolet. But of course, the biggest winner from the credit is Tesla, whose Model Y was the best-selling car in the world in 2023.
Tesla shares were down over 5.5% in Tuesday afternoon trading, though not just because of Congress. JPMorgan also released an analyst report Monday arguing that the decline in sales seen in the first quarter would accelerate in the second quarter. President Trump, with whom Tesla CEO Elon Musk had an extremely public falling out last month, suggested on social media Monday night that the government efficiency department Musk himself formerly led should “take a good, hard, look” at the subsidies Musk receives across his many businesses. Trump also said that he would “take a look” at Musk’s United States citizenship in response to reporters’ questions about it.
Cantor told me that he expects a surge of consumer attention to the EV market if the bill passes in its current form. “You’ve seen more customers pull their purchase ahead” when subsidies cut-offs are imminent, he said.
But overall, the end of the subsidy is likely to reduce EV sales from their previously expected levels.
Harvard researchers have estimated that the termination of the EV tax credit “would cut the EV share of new vehicle sales in 2030 by 6.0 percentage points,” from 48% of new sales by 2030 to 42%. Combined with other Trump initiatives such as terminating the National Electric Vehicle Infrastructure program for publicly funded chargers (currently being litigated) and eliminating California’s waiver under the Clean Air Act that allowed it to set tighter vehicle emissions standards, the share of new car sales that are electric could fall to 32% in 2030.
But not all government support for electric vehicles will end by October 1, even if the bill gets the president’s signature in its current form.
“It’s important for consumers to know there are many states that offer subsidies, such as New York, and Colorado,” Cantor told me. That also goes for California, New Jersey, Nevada, and New Mexico. You can find the full list here.
Editor’s note: This story has been edited to include a higher cost limit for trucks and SUVs.
Excise tax is out, foreign sourcing rules are in.
After more than three days of stops and starts on the Senate floor, Congress’ upper chamber finally passed its version of Trump’s One Big Beautiful Bill Act Tuesday morning, sending the tax package back to the House in hopes of delivering it to Trump by the July 4 holiday, as promised.
An amendment brought by Senators Joni Ernst and Chuck Grassley of Iowa and Lisa Murkowski of Alaska that would have more gradually phased down the tax credits for wind and solar rather than abruptly cutting them off was never brought to the floor. Instead, Murkowski struck a deal with the Senate leadership designed to secure her vote that accomplished some of her other priorities, including funding for rural hospitals, while also killing an excise tax on renewables that had only just been stuffed into the bill over the weekend.
The new tax on wind and solar would have driven up development costs by as much as 20% — a prospect that industry groups said would “kill” investment altogether. But even without the tax, the Senate’s bill would gum up the works for clean energy projects across the spectrum due to new phase-out schedules for tax credits and fast-approaching deadlines to meet complex foreign sourcing rules. While more projects will likely be built under this version than the previous one, the basic outcomes haven’t changed: higher energy costs, project delays, lost jobs, and ceding leadership in artificial intelligence and manufacturing to China.
"This bill will hit Americans hard, terminating credits that have helped families lower their energy and transportation costs, shrinking demand for American-made advanced energy technologies, and squeezing new domestic energy production at a time of rising demand and prices,” Heather O’Neill, the CEO and president of the trade group Advanced Energy United, said in a statement Tuesday. “The advanced energy industry will endure, but the downstream effects of these rollbacks and punitive policies will be felt by American families and businesses for years to come.”
Here’s what’s in the final Senate bill.
The final Senate bill bifurcates the previously technology-neutral tax credits for clean electricity into two categories with entirely different rules and timelines — wind and solar versus everything else.
Tax credits for wind and solar farms would end abruptly with no phase-out period, but the bill includes a significant safe harbor for projects that are already under construction or close to breaking ground. As long as a project starts construction within 12 months of the bill’s passage, it will be able to claim the tax credits as originally laid out in the Inflation Reduction Act. All other projects must be “placed in service,” i.e. begin operating, by the start of 2028 to qualify.
That means if Trump signs the bill into law on July 4, wind and solar developers will have until July 4 of 2026 to “start construction.” Otherwise, they will have less than a year and a half to bring their projects online and still qualify for the credits.
Meanwhile, all other sources of zero-emissions electricity, including batteries, advanced nuclear, geothermal, and hydropower, will be able to continue claiming the tax credits for nearly a decade. The credits would start phasing down for projects that start construction in 2034 and terminate in 2036.
While there are some potential wins in the bill for clean energy development, many of the safe harbored projects will still be subject to complex foreign sourcing rules that may prove too much of a burden to meet.
The bill requires that any zero-emissions electricity or advanced manufacturing project that starts construction after December of this year abide by strict new “foreign entities of concern,” or FEOC rules in order to be eligible for tax credits. The rules penalize companies for having financial or material connections to people or businesses that are “owned by, controlled by, or subject to the jurisdiction or direction of” any of four countries — Russia, Iran, North Korea, and most importantly for clean energy technology, China.
As with the text that came out of the Senate Finance committee, the text in the final bill would phase in supply chain restrictions, requiring project developers and manufacturers to use fewer and fewer Chinese-sourced inputs over time. For clean electricity projects starting construction next year, 40% of the value of the materials used in the project must be free of ties to a FEOC. By 2030, the threshold would rise to 60%. Energy storage facilities are subject to a more aggressive timeline and would be required to prove that 55% of the project materials are non-FEOC in 2026, rising to 75% by 2030. Each covered advanced manufacturing technology gets its own specific FEOC benchmarks.
Unlike the text from the Finance Committee, however, the final text includes a clear exception for developers who already have procurement contracts in place prior to the bill’s enactment. If a solar developer has already signed a contract to get its cells from a Chinese company, for example, it could exempt that cost from the calculation. That would make it easier for companies further along in the development process to comply with the eligibility rules.
That said, these materials sourcing rules come on top of strict ownership and licensing rules likely to block more than 100 existing and planned solar and battery factories with partial Chinese ownership or licensing deals with Chinese firms from receiving the tax credits, per a BloombergNEF analysis I reported on previously.
Once again, the details of how any of this will work — and whether it will, in fact, be “workable” — will depend heavily on guidance written by the Treasury department. That not only gives the Trump administration significant discretion over the rules, it also assumes that the nTreasury department, which is now severely understaffed after Trump’s efficiency department cleaned house earlier this year, will actually have the bandwidth to write them. Without Treasury guidance, developers may not have the cost certainty they need to continue moving forward on projects.
Up until today, the Senate and House looked poised to destroy the business model for companies like Sunrun that lease rooftop solar installations to homeowners and businesses by cutting them off from the investment tax credit, which can bring down the cost of a solar array by as much as 70%. The final Senate bill, however, got rid of this provision and replaced it with a much more narrow version.
Now, the only “leasing” schemes that are barred from claiming tax credits are those for solar water heaters and small wind installations. Companies that lease solar panels, batteries, fuel cells, and geothermal heating equipment are still eligible. SunRun’s stock jumped nearly 10% on Tuesday.
Other than the new FEOC rules, which will have truly existential consequences for a great many projects, there aren’t many changes to the advanced manufacturing tax credit, or 45X, than in previous versions of the bill. The OBBBA would create a new phase-out schedule for critical mineral producers claiming the tax credit that begins in 2031. Previously, critical minerals were set to be eligible indefinitely. It would also terminate the credit for wind energy components early, in 2028.
One significant change from the Senate Finance text is that the bill would allow vertically integrated companies to stack the tax credit for multiple components.
But perhaps the biggest change, which was introduced last weekend, is a twisted new definition of “critical mineral” that allows metallurgical coal — the type of coal used in steelmaking — to qualify for the tax credit. As my colleague Matthew Zeitlin wrote, most of the metallurgical coal the U.S. produces is exported, meaning this subsidy will mostly help other countries produce cheaper steel.
It looks like the hydrogen industry’s intense lobbying efforts finally paid off: The final Senate bill is the first text we’ve seen since this process began in May that would extend the lifespan of the tax credit for clean hydrogen production. Now, projects that begin construction before January 1, 2028 will still qualify for the credit. This is shorter than the Inflation Reduction Act’s 2033 cut-off, but much longer than the end-of-year cliff earlier versions of the bill would have imposed.
The tax credits for electric vehicles and energy efficiency building improvements would end almost immediately. Consumers will have to purchase or lease a new or used EV before September 30, 2025, in order to benefit. There would be a slightly longer lead time to get an EV charger installed, but that credit (30C) would expire on June 30, 2026.
Meanwhile, energy efficiency upgrades such as installing a heat pump or better-insulated windows and doors would have to be completed by the end of this year in order to qualify. Same goes for self-financed rooftop solar. The tax credit for newly built energy efficiency homes would expire on June 30, 2026.
The bill would make similar changes to the carbon sequestration (45Q) and clean fuels (45Z) tax credits as previous versions, boosting the credit amount for carbon capture projects that do enhanced oil recovery, and extending the clean fuels credit to corn ethanol producers.
The House Rules Committee met on Tuesday afternoon shortly after the Senate vote to deliberate on whether to send it to the House floor, and is still debating as of press time. As of this writing, Rules members Ralph Norman and Chip Roy have said they’ll vote against it.
On sparring in the Senate, NEPA rules, and taxing first-class flyers
Current conditions: A hurricane warning is in effect for Mexico as the Category 1 storm Flossie approaches • More than 50,000 people have been forced to flee wildfires raging in Turkey • Heavy rain caused flash floods and landslides near a mountain resort in northern Italy during peak tourist season.
Senate lawmakers’ vote-a-rama on the GOP tax and budget megabill dragged into Monday night and continues Tuesday. Republicans only have three votes to lose if they want to get the bill through the chamber and send it to the House. Already Senators Thom Tillis and Rand Paul are expected to vote against it, and there are a few more holdouts for whom clean energy appears to be one sticking point. Senator Lisa Murkowski of Alaska, for example, has put forward an amendment (together with Iowa Senators Joni Ernst and Chuck Grassley) that would eliminate the new renewables excise tax, and phase out tax credits for solar and wind gradually (by 2028) rather than immediately, as proposed in the original bill. “I don’t want us to backslide on the clean energy credits,” Murkowski told reporters Monday. E&E News reported that the amendment could be considered on a simple majority threshold. (As an aside: If you’re wondering why wind and solar need tax credits if they’re so cheap, as clean energy advocates often emphasize, Heatmap’s Emily Pontecorvo has a nice explainer worth reading.)
At the same time, Utah’s Senator John Curtis has proposed an amendment that tweaks the new excise tax to make it more “flexible.” The amendments are “setting up a major intra-party fight,” Politicoreported, adding that “fiscal hawks on both sides of the Capitol are warning they will oppose the bill if the phase-outs of Inflation Reduction Act provisions are watered down.” Senators have already defeated amendments proposed by Democrats Jeanne Shaheen of New Hampshire and John Hickenlooper of Colorado to defend clean energy and residential solar tax credits, respectively. The session has broken the previous record for most votes in a vote-a-rama, set in 2008, with no end in sight.
The Department of Energy on Monday rolled back most of its regulations relating to the National Environmental Policy Act, or NEPA, and published a new set of guidance procedures in their place. The longstanding NEPA law requires that the government study the environmental impacts of its actions, and in the case of the DOE, this meant things like permitting and public lands management. In a press release outlining the changes, the agency said it was “fixing the broken permitting process and delivering on President Trump’s pledge to unleash American energy dominance and accelerate critical energy infrastructure.” Secretary of Energy Chris Wright said the agency was cutting red tape to end permitting paralysis. “Build, baby, build!” he said.
Nearly 300 employees of the Environmental Protection Agency signed a letter addressed to EPA head Lee Zeldin declaring their dissent toward the Trump administration’s policies. The letter accuses the administration of:
“Going forward, you have the opportunity to correct course,” the letter states. “Should you choose to do so, we stand ready to support your efforts to fulfill EPA’s mission.” It’s signed by more than 420 people, 270 being EPA workers. Many of them asked to sign anonymously. In a statement to The New York Times, EPA spokesperson Carolyn Horlan said “the Trump EPA will continue to work with states, tribes and communities to advance the agency’s core mission of protecting human health and the environment and administrator Zeldin’s Powering the Great American Comeback Initiative, which includes providing clean air, land and water for EVERY American.”
At the fourth International Conference on Financing for Development taking place in Spain this week, a group of eight countries including France and Spain announced they’re banding together in an effort to tax first- and business-class flyers as well as private jets to raise money for climate mitigation and sustainable development. “The aim is to help improve green taxation and foster international solidarity by promoting more progressive and harmonised tax systems,” the office of Spanish Prime Minister Pedro Sanchez said in a statement. Other countries in the coalition include Kenya, Barbados, Somalia, Benin, Sierra Leone, and Antigua & Barbuda. The group said it will “work towards COP30 on a better contribution of the aviation sector to fair transitions and resilience.” Wopke Hoekstra, who heads up the European Commission for Climate, called for other countries to join the group in the lead-up to COP30 in November.
In case you missed it: Google announced on Monday that it intends to buy fusion energy from nuclear startup Commonwealth Fusion Systems. Of course, CFS will have to crack commercial-scale fusion first (minor detail!), but as The Wall Street Journal noted, the news is significant because it is “the first direct deal between a customer and a fusion energy company.” Google will buy 200 megawatts of energy supplied by CFS’s ARC plant in Virginia. “It’s a pretty big signal to the market that fusion’s coming,” CFS CEO Bob Mumgaard told the Journal. “It’s desirable, and that people are gonna work together to make it happen.” Google’s head of advanced energy Michael Terrell echoed that sentiment, saying the company hopes this move will “prove out and scale a promising pathway toward commercial fusion power.” CFS, which is backed by Bill Gates’ Breakthrough Energy Ventures, aims to produce commercial fusion energy in the 2030s.
All the public property owned by Britain’s King Charles earned a net profit of £1.15 billion ($1.58 billion) last year. The biggest source of income? Offshore wind leases.