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:
A new report demonstrates how to power the computing boom with (mostly) clean energy.
After a year of concerted hand-wringing about the growing energy needs of data centers, a report that dropped just before the holidays proposed a solution that had been strangely absent from the discussion.
AI companies have seemingly grasped for every imaginable source of clean energy to quench their thirst for power, including pricey, left-field ideas like restarting shuttered nuclear plants. Some are foregoing climate concerns altogether and ordering up off-grid natural gas turbines. In a pithily named new analysis — “Fast, scalable, clean, and cheap enough” — the report’s authors make a compelling case for an alternative: off-grid solar microgrids.
An off-grid solar microgrid is a system with solar panels, batteries, and small gas generators that can work together to power a data center directly without connecting to the wider electricity system. It can have infinite possible configurations, such as greater or smaller numbers of solar panels, and more or less gas-generated capacity. The report models the full range of possibilities to illustrate the trade-offs in terms of emission reductions and cost.
An eclectic group of experts got together to do the research, including staffers from the payment company Stripe, a developer called Scale Microgrids, and Paces, which builds software to help renewable energy developers identify viable sites for projects. They found that an off-grid microgrid that supplied 44% of a data center’s demand from solar panels and used a natural gas generator the rest of the time would cost roughly $93 per megawatt-hour compared to about $86 for large, off-grid natural gas turbines — and it would emit nearly one million tons of CO2 less than the gas turbines. A cleaner system that produced 90% of its power from solar and batteries would cost closer to $109 per megawatt-hour, the authors found. While that’s more expensive than gas turbines, it’s significantly cheaper than repowering Three Mile Island, the fabled nuclear plant that Microsoft is bringing back online for an estimated $130 per megawatt-hour.
One challenge with solar microgrids is that they require a lot of land for solar panels. But a geospatial analysis showed that there’s more than enough available land in the U.S. southwest — primarily in West Texas — to cover estimated energy demand growth from data centers through 2030. This shouldn’t be taken as a recommendation, per se. The paper doesn’t interrogate the need for data centers or the trade-offs of building renewable power for AI training facilities versus to serve manufacturing or households. The report is just an exercise in asking whether, if these data centers are going to be developed, could they at least add as few emissions as possible? Not all hyperscalers care about climate, and those that do might still prioritize speed and scale over their net-zero commitments. But the authors argue that it’s possible to build these systems more quickly than it would be to install big gas turbines, which currently have at least three-year lead times to procure and fall under more complicated permitting regimes.
Before the New Year, I spoke with two of the authors — Zeke Hausfather from Stripe and Duncan Campbell from Scale Microgrids — about the report. Stripe doesn’t build data centers and has no plans to, but Hausfather works for a unit within the company called Stripe Climate, which has a “remit to work on impactful things,” he told me. He and his colleagues got interested in the climate dilemma of data centers, and enlisted Scale Microgrids and Paces to help investigate. Our conversation has been lightly edited for clarity.
Why weren’t off-grid solar microgrids really being considered before?
Zeke Hausfather: As AI has grown dramatically, there’s been much more demand for data centers specifically focused on training. Those data centers have a lot more relaxed requirements. Instead of serving millions of customer requests in real time, they’re running these incredibly energy intensive training models. Those don’t need to necessarily be located near where people live, and that unlocks a lot more potential for solar, because you need about 50 times more land to build a data center with off-grid solar and storage than you would to build a data center that had a grid connection.
The other change is that we’re simply running out of good grid connections. And so a lot of the conversation among data center developers has been focused on, is there a way to do this with off-grid natural gas? We think that it makes a lot more sense, particularly given the relaxed constraints of where you can build these, to go with solar and storage, gas back-up, and substantially reduce the emissions impact.
Duncan Campbell: It was funny, when Nan [Ransohoff, head of climate at Stripe] and Zeke first reached out to me, I feel like they convinced me that microgrids were a good idea, which was the first time this ever happened in my life. They were like, what do you think about off-grid solar and storage? Oh, the energy density is way off, you need a ton of land. They’re like, yeah, but you know, for training, you could put it out in the desert, it’s fine, and hyperscalers are doing crazy things right now to access this power. We just went through all these things, and by the end of the call, I was like, yeah, we should do this study. I wasn’t thinking about it this way until me, the microgrids guy, spoke to the payments company.
So it’s just kind of against conventional logic?
Campbell: Going off-grid at all is wild for a data center operator to consider, given the historical impulse was, let’s have 3x more backup generators than we need. Even the off-grid gas turbine proposals out there feel a little nuts. Then, to say solar, 1,000 acres of land, a million batteries — it’s just so unconventional, it’s almost heretical. But when you soberly assess the performance criteria and how the landscape has shifted, particularly access to the grid being problematic right now, but also different requirements for AI training and a very high willingness to pay — as we demonstrate in our reference case with the Three Mile Island restart — it makes sense.
Hausfather: We should be clear, when we talk about reliability, a data center with what we model, which is solar, batteries, and 125% capacity backup gas generators, is still probably going to achieve upwards of 99% reliability. It’s just not gonna be the 99.999% that’s traditionally been needed for serving customers with data centers. You can relax some of the requirements around that.
Can you explain how you went about investigating what it would mean for data centers to use off-grid solar microgrids?
Campbell: First we just built a pretty simple power flow model that says, if you’re in a given location, the solar panel is going to make this much power every hour of the year. And if you have a certain amount of demand and a certain amount of battery, the battery is going to charge and discharge these times to make the demand and supply match. And then when it can’t, your generators will kick on. So that model is just for a given solar-battery-generator combo in a given location. Then what we did is made a huge scenario suite in 50-megawatt increments. Now you can see, for any level of renewable-ness you want, here’s what the [levelized cost of energy] is.
Hausfather: As you approach 100%, the costs start increasing exponentially, which isn’t a new finding, but you’re essentially having to overbuild more and more solar and batteries in order to deal with those few hours of the year where you have extended periods of cloudiness. Which is why it makes a lot more sense, financially, to have a system with some gas generator use — unless you happen to be in a situation where you can actually only run your data center 90% of the time. I think that’s probably a little too heretical for anyone today, but we did include that as one of the cases.
Did you consider water use? Because when you zoom in on the Southwest, that seems like it could be a constraint.
Hausfather: We talked about water use a little bit, but it wasn’t a primary consideration. One of the reasons is that how data centers are designed has a big effect on net water use. There are a lot of designs now that are pretty low — close to zero — water use, because you’re cycling water through the system rather than using evaporative cooling as the primary approach.
What do you want the takeaway from this report to be? Should all data centers be doing this? To what extent do you think this can replace other options out there?
Hausfather: There is a land rush right now for building data centers quickly. While there’s a lot of exciting investment happening in clean, firm generation like the enhanced geothermal that Fervo is doing, none of those are going to be available at very large scales until after 2030. So if you’re building data centers right now and you don’t want to cause a ton of emissions and threaten your company’s net-zero targets or the social license for AI more broadly, this makes a lot of sense as an option. The cost premium above building a gas system is not that big.
Campbell: For me, it’s two things. I see one purpose of this white paper being to reset rules of thumb. There’s this vestigial knowledge we have that this is impossible, and no, this is totally possible. And it seems actually pretty reasonable.
The second part that I think is really radical is the gigantic scale implied by this solution. Every other solution being proposed is kind of like finding a needle in a haystack — if we find this old steel mill, we could use that interconnection to build a data center, or, you know, maybe we can get Exxon to make carbon capture work finally. If a hyperscaler just wanted to build 10 gigawatts of data centers, and wanted one plan to do it, I think this is the most compelling option. The scalability implied by this solution is a huge factor that should be considered.
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
The company says its first Optimus robots will start rolling off the line in “2026.”
Tesla is a car company everywhere except Wall Street. It delivered some 1.7 million cars in 2024, which were built in factories in Texas, California, Germany, and China. These car sales (and leases and sales of regulatory credits) generated some $77 billion in revenue. Its gross margin on these cars is about 18.5%, or around $14 billion.
When Tesla reported its first quarter earnings, it announced a more than 70% decline in profits, continued falling sales, and ahit to its business from the trade war with China. But its stock climbed the next day, and is now trading at around $350 a share, from $238 before the report, giving it an overall value of over $1 trillion. By some metrics, Tesla makes up more than half of the overall value of the automotive industry.
That’s because it’s not valued like a car company. The company’s investors are putting a huge stake on future innovations that largely spring from the head of Elon Musk, the company’s chief executive. These include promised self-driving cars and a self-driving taxi service, as well as the Optimus humanoid robot, which Musk has said could turn into a $10 trillion business. (For reference, Walmart’s annual revenue is just under $650 billion; Walmart is also worth less than Tesla today.) So far, all we know about the Optimus is that it can dance.
One reason analysts and shareholders cheered its most recent results is because Musk committed to spending less time in Washington trying to reshape the federal government and more time with the company that makes up the lion’s share of his immense personal wealth. But just getting more of Musk’s time is the easy test. A more consequential challenge for the thesis that Tesla can be more than just a company that sells cars to people who drive them is its upcoming robotaxi pilot in Austin, Texas, scheduled for next month.
While Google’s Waymo already has a fully autonomous taxi system available in a few areas of a few cities, Musk has repeatedly promised that Tesla could reach full autonomy globally far more cheaply than Waymo — or, as he puts it, “Waymo needs ‘way mo’ money to succeed 😂.”
But the initial rollout of the robotaxi may be modest. Adam Jonas, a bullish Tesla analyst with Morgan Stanley, wrote in a note to clients on Friday after a conversation with Tesla’s head of investor relations that the Austin debut will “have 10-20 cars” and “plenty of tele-ops to ensure safety levels.”
Another future Tesla business, its Optimus robot, might be able to open up its factory to tours for investors sometime in the last three months of the year, Jonas reported, with commercialization coming by the middle of 2026 at a cost of around $20,000 per unit. The company aims to produce “several thousand” robots by the end of this year, he said. (Though you should be skeptical of any and all dates and deadlines given by Tesla — Musk has been promising an imminent fleet of autonomous Teslas for over five years.) Right now, Jonas wrote, about 12 are being produced at a time, more or less by hand.
And that’s just the mechanics. The software for humanoid autonomy also isn’t there yet: “Tesla admits both intelligence and cost ‘need to come a long way’ to unlock the true potential of humanoid robots,” Jonas wrote. “The neural nets for Optimus are far larger than for cars given greater degrees-of-freedom and far more open-ended tasks.”
Tesla also has more prosaic worries for these next generation businesses. Company officials told Jonas that they’re in an “incredibly competitive” hiring market, especially compared to Chinese companies, which “own the supply chain” for advanced technologies.
While Tesla and Musk are eager to tell the public that the company is orienting itself toward an AI-driven robotic future, some of its other corporate actions may reflect the more present-day concerns of brand management. Tesla sales have declined sharply overseas, and its showrooms have become sites for protest, driven by anger over Musk’s role in the Trump administration.
The company said Friday that it would welcome a new member of its board: Jack Hartung, president and chief strategy officer of Chipotle, a brand with its own history of crisis, stock market volatility, and precarious executive leadership. While it’s unlikely Tesla will get involved in the food business anytime soon, it may benefitfrom learning from Chipotle’s struggles over the last few years of giving people what they expect.
At least one target of Chris Wright’s grant review may run into some sticky statutory issues.
The Department of Energy announced on Thursday that it’s reviewing some 179 awards made by the Biden administration worth $15 billion to ensure they were “consistent with Federal law and this Administration’s policies and priorities.”
But what happens when federal law and Trump’s priorities are at odds?
In the case of at least one awardee, the major U.S. steel producer Cleveland Cliffs, the DOE’s review process may become a mechanism to take funding that is statutorily designated for projects that reduce greenhouse gas emissions and channel it into long-lived fossil fuel assets.
Lourenco Goncalves, the CEO of Cleveland Cliffs, a major U.S. steel producer, said on an earnings call last week that the company was in the process of renegotiating its $500 million award under the Industrial Demonstrations Program. The DOE program funded 33 projects to decarbonize heavy industry, including cement, steel, aluminum, and glass production, with first-of-its-kind or early-scale commercial technologies.
Cleveland Cliffs was originally going to use the money to replace its coal-fired blast furnace at a steel plant in Middletown, Ohio, with a new unit that ran on a mix of hydrogen and natural gas as well as new electric furnaces. Now, the company is working with the Department of Energy to “explore changes in scope to better align with the administration’s energy priorities,” Goncalves told investors. The project would no longer assume the use of hydrogen and “would instead rely on readily available and more economical fossil fuels.”
The CEO later clarified that the company planned to “reline” its blast furnace at Middletown, extending its life, “now that the project is changing scope.”
But the Inflation Reduction Act, which created the Industrial Demonstrations Program, says the funds must be used for “the purchase and installation, or implementation, of advanced industrial technology,” which it defines as tech “designed to accelerate greenhouse gas emissions reduction progress to net-zero.”
“I don’t know at this point what Cleveland Cliffs can confidently say they’re going to do to substantially reduce greenhouse gasses and also deliver gains in public health and jobs to local communities, which is a prerequisite for IDP grant money,” Yong Kwon, a senior advisor for the Sierra Club’s Industrial Transformation Campaign, told me.
The memo announcing the Department of Energy’s review says that it has already reached some “concerning” findings, though it does not describe what was concerning or provide any further detail about the awards under review.
Compared to his peers at other agencies, Energy Secretary Chris Wright has been noticeably quiet about the Department of Government Efficiency’s efforts to slash funding across the Department of Energy. But in March, Axiosobtained documents that said more than 60% of grants awarded under the Industrial Demonstrations Program were being targeted. The following month, CNN reported that Cleveland Cliffs’ Middletown project was on the list slated for termination, noting that it would have secured 2,500 jobs and created more than 100 new, permanent jobs in JD Vance’s hometown.
At the time, Energy Department spokesperson Ben Dietderich told CNN that “no final decisions have been made” about the funding and that “multiple plans are still being considered.” Now it appears the Department may be negotiating with Cleveland Cliffs to develop a cheaper and more politically palatable project.
Meanwhile, House Republicans have also introduced a bill that would rescind any money from the Industrial Demonstrations Program that isn’t obligated, meaning that if the Department of Energy can find a way to legally terminate its contracts with companies, Congress may claw back the money.
The Industrial Demonstrations Program was the Biden administration’s “missing middle” grant program, designed to support projects that were past the early experimental stage, in which case they were no longer candidates for funding from the Advanced Research Projects Agency, but were also not ready for mass deployment, like those supported by the Loan Programs Office. In the case of Cleveland Cliffs, the funding was also aimed at making the U.S. a leader in the future of steelmaking, retaining thousands of jobs, saving the company money, and enabling it to command a higher price for its products.
“If you’re going to maintain blast furnaces, it means you have one foot in a technology that is now quickly becoming outdated that the rest of the global steel industry is transitioning away from,” Kwon told me.
David Super, an expert in administrative law at Georgetown University, told me in an email that if the Department of Energy provides and Cleveland Cliffs accepts funding that does not comply with statute, “the Department officials involved could be in violation of the Antideficiency Act and Cleveland Cliffs could be required to return the money, a modified contract notwithstanding.” The Antideficiency Act prohibits federal employees from obligating funds for projects that are not authorized by law.
Super added that the law also specifies that the money be awarded “on a competitive basis.” As Cleveland Cliffs won the competition with its hydrogen project, allowing it to use the money for a different project at the company’s plant “would thus violate the requirement of competitive awards and would allow the unsuccessful bidders to challenge this funding award.”
Neither Cleveland Cliffs nor the Department of Energy responded to a request for comment.
Leaks to the press have signaled that the Department of Energy may be taking a similar approach with the hydrogen hubs, potentially terminating contracts to develop renewable energy-based projects — all of which are in blue states — while allowing natural gas-based projects in red states to continue.
It is still not clear how the agency will handle its $3.5 billion direct air capture hubs, which news outlets have reported may also be under threat. On Friday, however, the oil and gas company Occidental, which was awarded a contract to develop a DAC hub in Texas, announced that the Abu Dhabi National Oil Company is considering investing up to $500 million in the project as part of a new joint-venture agreement. The press release notes that the agreement was signed during President Trump’s visit to the United Arab Emirates.
Last week, Senator Lisa Murkowski of Alaska said during a confirmation hearing for Kyle Haustveit, the nominee to head the Office of Fossil Energy, that two carbon capture projects in her state were “in limbo” due to the agency’s spending review. The same day, in another hearing, Representative Debbie Wasserman Schultz of Florida accused Wright of having frozen $67 billion worth of funds and asked him to commit to releasing it.
Wright denied this. “We’re not withholding any funds and we’ve paid every invoice we’ve had for work done and funds that are due,” he replied. But he went on to clarify that the agency is “engaging with” recipients “to make sure American taxpayer monies are being spent in thoughtful, reasonable ways.”
According to efficiency department data, the DOE has “terminated” 39 contracts worth $60 million and five grants worth $3.4 million. The contracts include news subscriptions, various technical support services, and a $22 million contract with consulting firm McKinsey for “rapid response deliverables” for the Office of Clean Energy Demonstrations, the department that runs the Industrial Demonstrations Program. The grants include three Advanced Research Projects Agency awards to explore using geologic stores of hydrogen, and another to reduce methane emissions from natural gas flares.
On budget negotiations, Climeworks, and DOE grants
Current conditions: It’s peak storm season in the U.S., with severe weather in the forecast for at least the next six days in the Midwest and East• San Antonio, Texas, is expected to hit 108 degrees Fahrenheit today• Monsoon rains have begun in Sri Lanka.
The House Budget Committee meeting to prepare the reconciliation bill for a floor vote as early as next week appears to be a go for Friday, despite calls from some Republicans to delay the session. At least three GOP House members, including two members of the Freedom Caucus, have threatened to vote no on the budget because a final score for the Energy and Commerce portion of the bill, which includes cuts to Medicaid, won’t be ready from the Congressional Budget Office until next week. That is causing a “math problem” for Republicans, Politico writes, because the Budget Committee “is split 21-16 in favor of Republicans, and Democrats are expecting full attendance,” meaning Republicans can “only lose two votes if they want to move forward with the megabill Friday.” Republican Brandon Gill of Texas is currently out on paternity leave, further reducing the margin for disagreement.
House Speaker Mike Johnson is also contending with discontent in the ranks over cuts to clean energy tax credits. “It’s not as bad as I thought it was going to be, but it’s still pretty bad,” New York Republican Andrew Garbarino, a co-chair of the House Bipartisan Climate Solutions Caucus, told Politico on Thursday. But concerns about the cuts, which would heavily impact Republican state economies and jobs, do not appear to be a “red line” for many others, including Georgia’s Buddy Carter, whose district benefits from Inflation Reduction Act credits for a Hyundai car and battery plant that is among the targets for elimination. You can learn more about the cuts Republicans are proposing to the IRA in our coverage here.
The Swiss carbon removal company Climeworks is preparing for significant cuts to its workforce, citing the larger economic landscape and the Trump administration’s lack of consistent support. The company currently has 498 employees, but is undergoing a consultation process, indicating it is looking to cut more than 10% of its workforce at once, SwissInfo.ch reports. “Our financial resources are limited,” Climeworks’ co-founder and managing director Jan Wurzbacher said in comments on Swiss TV.
Though Interior Secretary Doug Burgum is a known proponent of carbon capture, and there had been excitement in the industry that Trump’s attempts to expedite federal permitting would benefit carbon storage sites, the administration has also hollowed out the Department of Energy’s carbon removal team, my colleague Katie Brigham has reported. The ongoing funding cuts and uncertainty have made it difficult to get information from the government that could affect Climework’s Project Cypress in Louisiana, although Wurzbacher stressed that “we are not currently aware that our project would be stopped.”
Energy Secretary Chris Wright announced in a Thursday memo that the department will be reviewing at least $15 billion worth of grants awarded to “power grid and manufacturing supply chain projects” under the Biden administration, Reuters reports. “With this process, the Department will ensure we are doing our due diligence, utilizing taxpayer dollars to generate the largest possible benefit to the American people and safeguarding our national security,” Wright said in his statement.
The memo goes on to note that the DOE plans to prioritize “large-scale commercial projects that require more detailed information from the awardees for the initial phase of this review, but this process may extend to other DOE program offices as the reviews progress.” Projects that don’t meet the DOE’s standards could be denied, as could projects of grantees who fail to “respond to information requests within the provided time frame, does not respond to follow-up questions in a timely manner.” As of last week, Wright told lawmakers, “we’ve canceled zero” existing projects so far, E&E News writes; the agency will reportedly be reviewing at least 179 different awards during its audit.
The number of National Weather Service offices ending 24-hour operations and severe weather alerts is increasing. On Thursday, The San Francisco Chronicle confirmed that California’s Sacramento and Hanford offices, which provide information to more than 7 million people in the Central Valley, have been forced to reduce service due to “critically reduced staffing.”
Eliminating 24-hour service is especially concerning for the Central Valley and surrounding foothills, where around-the-clock weather updates can be critical. “These are offices that have both dealt with major wildfire episodes most of the past 10 years, and we are now entering fire season,” Daniel Swain, a climate scientist at UCLA and UC Agriculture and Natural Resources, told the Chronicle. “That’s a big, big problem.” Swain additionally shared on LinkedIn a map he’d put together of regions in the U.S. that no longer have full-service weather coverage, including “a substantial chunk of Tornado Alley during peak tornado season and the entirety of Alaska’s vast North Slope region.” The NWS is additionally seeking to fill 155 vacancies in coastal states that could face risks as the Atlantic hurricane season begins at the end of the month, The Washington Post reports. An estimated 500 of 4,200 NWS employees have been fired or taken early retirements since the start of Trump’s term.
Heatmap’s “most fascinating” EV of 2025 just got pushed back to 2026. The Ram 1500 Ramcharger — which has a 140-mile electric range as well as a V6 engine attached to a generator to power the car when the battery runs out — is now set to launch in the first quarter of next year due to “extending the quality validation period,” Crain’s Detroit Business reported this week. Parent company Stellantis also pushed back the launch of its fully electric Ram 1500 REV until summer 2027, with a planned model year of 2028. “Our plan ensures we are offering customers a range of trucks with flexible powertrain options that best meet their needs,” Stellantis spokeswoman Jodi Tinson told Crain’s in an email. Though you now have even longer to wait, you can read more about the car Jesse Jenkins calls “brilliant” here.
GMC
The 2026 GMC Hummer EV just got even more ridiculous. “Thanks to the new Carbon Fiber Edition,” the 9,000-pound car “can zoom to 60 miles per hour in 2.8 seconds,” InsideEVs reports.