Tech, utilities brace for clean energy crackdown

Politico

4 hours ago

President Donald Trump's regulators are poised to make it even harder for new wind and solar projects to get Biden-era tax breaks — a prospect that worries even some of the companies the administration says it wants to help.
Upcoming guidance from the Treasury Department implementing tax changes in the GOP megalaw could narrow the path to claiming clean energy credits. That could mean fewer renewable projects added to the power grid even as the artificial intelligence boom drives rising energy demand.
The guidance — due next week — is in response to an executive order last month in which Trump called for an end to 'market distorting subsidies for unreliable, foreign controlled energy sources.' The administration instead argues that fossil fuels, including coal, are the reliable energy sources needed to power a new wave of AI data centers.
But a range of interests — from utilities to tech giants — say onerous changes could harm their bottom lines.
Thanks, but no thanks
The Edison Electric Institute, which represents investor-owned utilities, told me and my colleague Brian Dabbs that renewable energy is 'critical to meeting energy dominance goals' in the short term. Because utilities have long planning horizons for new generation, member utilities may have already made 'substantial investments' in wind and solar projects, which could become more expensive if regulations change.
Tech interests told us they are reiterating to the Trump administration that the path to AI dominance runs through the power grid — which means using any available energy source.
The Data Center Coalition, which represents large tech companies and data center developers, is calling for a 'unified, technology-neutral approach' that does not subject wind and solar power to 'more restrictive or ambiguous eligibility frameworks' than other energy sources. The Information Technology Industry Council warned that blunting renewable energy 'could undermine efforts to power high-growth sectors such as advanced manufacturing and AI.'
What might change
Treasury's guidance could alter one key metric — the definition of the 'beginning of construction' — in a way that makes it harder for renewable energy projects to qualify for tax credits that sunset starting in 2026.
Tougher rules would fit with the Trump administration's assault on wind and solar incentives, which the White House says skew the electricity market and lessen incentives for 'dispatchable' fossil fuel power. In negotiations over the megalaw, Trump promised hard-right House members that he would use executive authority to further tighten tax credits.
But more moderate Republicans — who fought against efforts to implement an even faster rollback — are pressuring the administration to follow existing tax credit rules. Senate Republicans Chuck Grassley of Iowa and John Curtis of Utah are holding up confirmation for some Treasury nominees to get their way.
Clean energy advocates argue that stripping away renewable energy tax incentives will hurt the economy. Advanced Energy United, for example, said any rules that make it harder to build wind and solar will mean electricity prices go up.
Already, the megalaw has left a dent on the energy market. A report this week from LevelTen Energy, a clean energy marketplace, found that prices for power purchase agreements — long-term contracts for electricity supply that can boost renewable developments — are already up 4 percent in the month since the law's passage. That reflects the 'new risks and headwinds' of the renewable marketplace, LevelTen wrote.
It's Thursday — thank you for tuning in to POLITICO's Power Switch. I'm your host, Jason Plautz. Power Switch is brought to you by the journalists behind E&E News and POLITICO Energy. Send your tips, comments, questions to [e-mail].
Today in POLITICO Energy's podcast: Zack Colman breaks down what's happening at Sierra Club after its leader was fired this week.
Power Centers
Space launches could get environmental passTrump wants to exempt the commercial space industry from some environmental reviews and regulatory requirements, writes Michael Doyle.
A new executive order directs the Transportation Department to 'eliminate or expedite the [department's] environmental reviews for, and other obstacles' to the granting of launch and reentry licenses and permits. The order specifies that the agency will evaluate which space operations might be exempted from the National Environmental Policy Act.
Among the companies that could benefit from the rollback: Elon Musk's SpaceX.
Nordic heat wave was even hotter thanks to climate changeClimate change made a July heat wave in Nordic countries worse and more likely to happen, according to new research, Louise Guillot writes from Brussels.
Researchers from the World Weather Attribution compared the recent heat wave to pre-industrial times using peer-reviewed methods and models. They found that climate change made the two-week stretch in Norway, Sweden and Finland 10 times more likely and 2 degrees Celsius hotter. And it's just getting started.
'We definitely expect more of these events in the future and we also expect them to become more intense,' said Erik Kjellström, a climatology professor at the Swedish Meteorological and Hydrological Institute who worked on the study.
Oil industry lawsuit divides Republicans in LouisianaRepublican leaders in Louisiana have successfully sued an oil company to force it to pay for coastal cleanup and restoration, a break from their otherwise loyal approach to Trump's energy dominance agenda, Mike Soraghan writes.
The suit put Chevron on the hook for $744 million and has drawn the ire of MAGA faithful including Laura Loomer, who called Gov. Jeff Landry a 'perfect example of a Republican speaking out of both sides of his mouth.'
'What we're essentially saying is, 'Come on in, invest in Louisiana, and then in about 20 years or so, we're going to sue the hell out of you,'' said Marc Ehrhardt, executive director of the Grow Louisiana Coalition.
Locals disagree.
'I think it's reasonable for some of the companies to come and clean some of this stuff up,' said Richie Blink, a charter tour company owner in Plaquemines Parish, where the Chevron verdict was reached.
In Other News
Boom or bust? The oil and gas industry hasn't yet been a major job creator in Appalachia since the fracking boom started there in 2008, new research shows.
Sweat measure: A NASA scientist created a 'stickiness index' that measures a combination of heat and humidity in an attempt to understand and mitigate the risk of extreme temperatures.
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Advisory committees that help create safety rules for air and rail travel have been dissolved or cut back in part over concerns about DEI and climate advocacy.
Green groups are beefing up their legal departments in preparation for battles against Trump administration policies.
Some utilities are urging the Environmental Protection Agency to keep its authority to regulate power plant emissions.
Democrat David Rosner officially became chair of the Federal Energy Regulatory Commission on Wednesday.
That's it for today, folks! Thanks for reading.