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Breakingviews - Trump's big bill shrinks America's energy future
Breakingviews - Trump's big bill shrinks America's energy future

Reuters

time09-07-2025

  • Business
  • Reuters

Breakingviews - Trump's big bill shrinks America's energy future

NEW YORK, July 9 (Reuters Breakingviews) - One fact dominates the U.S. economy: it needs more power. After a long period in which demand for electrons flatlined, it is now rising again. Beyond gigantic data centers essential to artificial intelligence, the rise of battery technology, factory robots and more means that everything from transportation to industrial production will increasingly be electrified. This surge has, in large part, been fed by renewables like solar and wind. Yet President Donald Trump's recently passed 'Big, Beautiful Bill' may vaporize construction of a vast sum of green power that looked set to be built under previous policy, equivalent in capacity to every nuclear plant in the country. Trying to substitute in fossil fuels or atom-splitting is impractical and expensive. Slowing population growth, increased efficiency and a pair of recessions in the 2000s halted once-steady expansion of electricity generation in developed economies like the United States and the European Union. That's now over. Industries that show the most transformative promise – AI, autonomous vehicles, robots – are electricity hogs. Demand is increasing by about 2% annually and is projected to rise by 50% by 2050, according to the National Electrical Manufacturers Association, opens new tab. Failing to meet substantial growth can be disastrous, resulting in blackouts. Power providers, regulators and investors are rushing to oblige. Aggregate investment by 47 U.S. electric utilities should reach $212 billion this year, according to S&P Global. That's up 50% from 2022 and is expected to rise yet further. This binge was nurtured not just by the vast hunger of companies like ChatGPT developer OpenAI, whose Stargate project aims to build data centers consuming as much power as about 8 million homes, but also government intervention. The Inflation Reduction Act, passed in 2022 under President Joe Biden, offered tax credits for building carbon-free electricity generation and storage, as well as domestic production of solar panels, batteries, wind turbines, and components for nuclear and geothermal plants. These were substantial fillips: new solar farms, for instance, received either credits worth up to 30% of their required investment, or subsidies per watt of power generated. In turn, this begat a manufacturing boom, with investments in clean technology rising five-fold to $33 billion annually, according to tracker Clean Investment Monitor. Much of this went to an industry that will be placing yet more demand on the grid: electric vehicles. Ultimately, though the United States is a colossal extractor of fossil fuels, many of these extra electrons are coming from the sun or the breeze. The U.S. Energy Information Administration estimates that over half of all utility-scale generation added this year will be solar power, while a further 12% will come from wind. With subsidies, they are the cheapest source of new generation for utilities and their customers, according to Lazard, opens new tab. Trump's signature tax-and-spending legislation kicks out much of this support. Subsidies remain, for the moment, but will be cut years before they were scheduled to expire, beginning next year. Granted, those for nuclear, geothermal and batteries remain, but solar is the biggest chunk of growth on the grid and will be pummeled. Beyond spending cuts, unpredictable regulatory enforcement can stymie investment. The White House has promised new restrictions on green power. Whether a project qualifies as having begun before any subsidy cut-off date is open to some interpretation. Trade restrictions could bite: just look at batteries, which – starting in 2026 – become ineligible for financial support if over 45% of their content comes from China. The People's Republic is overwhelmingly the world's dominant supplier. This is particularly important because storing energy is a crucial complement to intermittent renewables, which wane when the sun sets or the wind stills. U.S. utilities are expected to add 18 gigawatts of batteries in 2025, equivalent at peak discharge to about 18 nuclear reactors and 80% above 2024's sum, according to the EIA. The alternative might seem simple: build new natural gas generation instead. While it's more costly than solar in most locations, it's consistent. Snag is, if you're in line to set up a new plant, you'll be waiting until 2030 or later. Manufacturers of gas turbines, an essential component, say they are sold out. Even when they become available, high demand has pushed up prices, as well as the cost of labor to install them. Utility NextEra Energy (NEE.N), opens new tab said this year that the cost of building new gas-fired plants has tripled over the past three years. Nuclear – an early favorite of technologists like OpenAI boss Sam Altman – promises the ultimate in steady power without interruption. Yet it is exceptionally expensive, prone to spectacular cost overruns, and takes years to build even before inevitable delays are factored in. Other sources, like geothermal, are simply too speculative at any meaningful scale. What this all means is that power producers, facing down subsidy-starved options, will probably just build less. Existing fossil-fuel plants would therefore be run harder, which means employing older technologies with higher marginal costs. According to the REPEAT Project at Princeton University, this will result in losing 820 terawatt-hours of new generation by 2035, more than all current nuclear capacity, costing consumers and businesses some $50 billion in higher bills over that span. What has been done can be undone, and this is not set in stone. For now, though, the U.S. is set to burn more and build less. Follow Robert Cyran on Bluesky, opens new tab.

Here's Why ChargePoint Stock Is a Buy Before Aug. 27
Here's Why ChargePoint Stock Is a Buy Before Aug. 27

Yahoo

time16-06-2025

  • Automotive
  • Yahoo

Here's Why ChargePoint Stock Is a Buy Before Aug. 27

ChargePoint is building out an EV charging business. Electricity demand from EVs is expected to grow massively for years to come. ChargePoint is in a race against time, technology, and money. 10 stocks we like better than ChargePoint › ChargePoint (NYSE: CHPT) is at the forefront of a massive technological transition. The world is moving from combustion engines to electric vehicles (EVs). This transition will necessitate a massive investment in infrastructure to support EVs. That's the big-picture story of why investors might want to buy ChargePoint. But there are some caveats here that are important to keep in mind, too. ChargePoint makes the infrastructure that supports EV charging. It sells its technology to everyone from homeowners to fleet owners to businesses that offer charging on the road, like a gas station. Between 2020 and 2050, demand for electricity from EVs is expected to increase by as much as 9,000%, according to the National Electrical Manufacturers Association (NEMA). ChargePoint is right in the middle of the scrum as companies look to stake out a position to take advantage of the growth potential EVs present. That is the opportunity that investors buying ChargePoint before it reports fiscal 2026 second-quarter earnings on or about Aug. 27 are trying to get in on. And ChargePoint has a lot going for it in that regard. It has a large network of chargers in the field, with customers in both North American and Europe. It has cutting-edge technology, noting it recently introduced a new bidirectional charging system. And it has partnerships with major industry players, such as industrial giant Eaton, with which ChargePoint just inked a partnership. Meanwhile, ChargePoint has been focused around profitability. Its gross margin has been rising, up seven basis points year over year in the fiscal first quarter of 2026. Its operating expenses fell notably, too. And it reduced its earnings before interest, taxes, depreciation, and amortization (EBITDA) loss by 23% year over year. The business is moving in a positive direction in some very important ways. If it can show continued progress when it next reports earnings, investors may take a sunnier view of the future here. All that said, ChargePoint is a stock that only the most aggressive investors will want to buy. It is a money-losing start-up in a fast-changing, competitive market. While it could succeed in establishing a strong foothold, it could just as easily fail in that effort. Note that cost-cutting is a key focus, even though there remains a huge need to invest in things like research and development. That brings up the question of cash. At the end of the first quarter of fiscal 2026, ChargePoint had roughly $196 million of cash on its balance sheet. That was down from about $225 million just three months earlier. At that rate of cash burn, ChargePoint only has a couple of years before it will run out of cash. It would likely need to replenish its cash pile well before that point if it wants to continue to compete effectively. The cash situation, combined with the business' ongoing losses and the huge need for more spending, is why ChargePoint's stock price has plunged into penny stock land. That's a sign that Wall Street isn't convinced that ChargePoint will survive without taking a trip through bankruptcy court. Indeed, given the cash situation and the low stock price, it will be hard, or at least very costly, for ChargePoint to tap the capital markets for additional funding. So the reason to buy ChargePoint is if you believe that it will manage to turn its financial situation around thanks to its success on the business front, through things like technological leadership and key industry partnerships. But the financial situation, which is very weak right now, is also the reason to avoid the company. In fact, even aggressive investors will probably be better off waiting until there's more progress on the company's financial foundation. Yes, you could miss out on some material early gains if you wait to buy this stock, but if ChargePoint can establish itself in the EV charging space, it will likely have decades of growth ahead of it. If it can't fix the balance sheet issues it is dealing with, however, it could mean a total washout for investors. If you do buy it, go in with a clear understanding of the risks you are taking on. Before you buy stock in ChargePoint, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and ChargePoint wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $653,702!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $870,207!* Now, it's worth noting Stock Advisor's total average return is 988% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Reuben Gregg Brewer has positions in Eaton Plc. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Here's Why ChargePoint Stock Is a Buy Before Aug. 27 was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

Time to Buy the Vanguard Utilities Index Fund ETF to Take Advantage of a Growing Trend?
Time to Buy the Vanguard Utilities Index Fund ETF to Take Advantage of a Growing Trend?

Yahoo

time12-06-2025

  • Business
  • Yahoo

Time to Buy the Vanguard Utilities Index Fund ETF to Take Advantage of a Growing Trend?

The United States demand for energy grew modestly for many years. Energy demand in the U.S. market is set to increase dramatically. The Vanguard Utilities Index ETF is a diversified way to exploit an important transition. 10 stocks we like better than NextEra Energy › When a blackout happens, modern life comes to a standstill. Almost everything stops because so many things rely on electricity today. For years utilities were looked at as sleepy investments, which they were. But the world is about to take a giant leap forward, leaning into electricity like never before. Now is the time to buy the Vanguard Utilities Index Fund ETF (NYSEMKT: VPU), to take advantage of the decades of growth opportunity ahead. NextEra Energy (NYSE: NEE) is one of the largest utilities in the United States, with a market cap of more than $140 billion. What's interesting about the business is that it operates in both the regulated utility space and the clean energy sector, where it is one of the largest producers of solar and wind power on the planet. It has a bird's-eye view of electricity demand. NextEra Energy is very clear about what it sees happening. Between 2000 and 2020, electricity demand grew 9%. That's not 9% per year, that's a grand total of 9% over the entire 20-year time period. That's the baseline that investors have gotten used to, and that's why utilities are viewed as sleepy income stocks. NextEra Energy expects electricity demand to grow by 55% between 2020 and 2040. That's a steep change, and a significant one at that. This assessment is backed by the National Electrical Manufacturers Association (NEMA), which expects electricity use to increase from 21% of final energy use to 32% by 2050. If you haven't looked at utility stocks before, you might want to now so you can take advantage of this growing demand trend. You could buy individual utility stocks to take advantage of this investment opportunity. NextEra Energy, for example, appears well situated, since NEMA is projecting notable growth for renewable energy. But NextEra's utility stronghold is in Florida, and NEMA believes the biggest growth drivers will be different in different regions. In other words, the better way to take advantage of the big-picture trend is with a utility ETF that provides broader exposure. The Vanguard Utilities Index Fund ETF tracks the MSCI US Investable Market Utilities 25/50 Index. Although it's a bit complex, this index basically attempts to track a diversified portfolio of large-, mid-, and small-cap U.S. utilities. Electric utilities account for roughly 85% of the index. The portfolio contains 68 stocks, and the expense ratio is a modest 0.09%. Although you might make out better picking one great utility, that's a harder task than it may seem. NextEra Energy is a good example, because it is well run and has grown faster than most of its peers. But it also tends to trade at a premium to other utility stocks. Southern Company (NYSE: SO) is another interesting example from the ETF's holdings. It spent years in the Wall Street doghouse while it was building two nuclear reactors. Once the project, which was late and over budget, was complete, the stock price rallied. Then there's Dominion Energy (NYSE: D), yet another ETF holding, which is currently out of favor because it's in the middle of a business turnaround. Only Dominion operates in one of the largest data center markets in the world. With so many different stories and investment timelines, punting with a diversified ETF like the Vanguard Utilities Index Fund ETF is an easy solution. What's nice about the Vanguard Utilities Index Fund ETF is that it lets you take advantage of the growth potential ahead for a sector that's expected to see materially increased demand. It does so while providing diversification and income, given its nearly 3% dividend yield. For reference, that's more than twice the yield you would collect from the S&P 500 index (SNPINDEX: ^GSPC). Overall, growth and income investors will both find the Vanguard Utilities Index Fund ETF an attractive way to play a massive change in U.S. electricity demand. Before you buy stock in NextEra Energy, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and NextEra Energy wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $649,102!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $882,344!* Now, it's worth noting Stock Advisor's total average return is 996% — a market-crushing outperformance compared to 174% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Reuben Gregg Brewer has positions in Dominion Energy and Southern Company. The Motley Fool has positions in and recommends NextEra Energy. The Motley Fool recommends Dominion Energy. The Motley Fool has a disclosure policy. Time to Buy the Vanguard Utilities Index Fund ETF to Take Advantage of a Growing Trend? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

New nuclear power plants don't make sense for South Carolina
New nuclear power plants don't make sense for South Carolina

Yahoo

time26-04-2025

  • Business
  • Yahoo

New nuclear power plants don't make sense for South Carolina

Nuclear reactor assemblies pictured Sept. 12, 2024, in storage at V.C. Summer nuclear site near Fairfield. (Provided by S.C. Nuclear Advisory Council) Gov. Henry McMaster called for a 'nuclear power renaissance' in his recent State of the State address. Our governor urged lawmakers to support a revival of our state's failed nuclear plant. That's a mistake given the inconvenient facts surrounding our state's recent history with the V.C. Summer nuclear debacle. I researched the future prospects for new nuclear power projects in the United States. While small modular reactors, or SMRs, have long-term potential for U.S. nuclear power, SMR's are still on the drawing board. There currently are no new nuclear plants under construction in the U.S. The Deloitte Research Center for Energy & Industrials did an analysis as to whether new nuclear power plants could meet the projected need for future energy generation. The extensive analysis presumed robust deployment for the design, manufacture and projected costs of new nuclear power over the next decade. Even then, nuclear power could only meet 10% of the projected increase just for new data center demand by 2035. The National Electrical Manufacturers Association has projected that data center growth coupled with transportation electrification will drive a 50% increase in U.S. electricity demand through 2050. The industry points to the reliability of nuclear power along with its lower emissions. But what about the construction delays and the resulting cost overruns? And what about the creation of more radioactive waste? High-level radioactive waste is currently being stored on site, but that waste will remain radioactive for thousands of years. The U.S. doesn't have a long-term repository for high-level radioactive waste. Let's look at Georgia's recent experience with their Vogtle nuclear power plant. Vogtle was approved in 2009. Yet the project wasn't completed until 2024, seven years behind schedule. To make matters worse, Vogtle's projected costs ballooned from its initial estimate of $14 billion to roughly $35 billion. As a result, Georgia's ratepayers have seen six rate increases since 2023. Do we want rapid increases in our electric bills in South Carolina? When it comes to building new nuclear power plants, the real problem comes down to excessive costs. Nuclear construction costs range from $6,417 per kilowatt to $12,681 per kW. Compare that to $1,290 per kW for new gas-fired plants. This vast difference in construction costs will result in much higher electric bills. S.C. ratepayers would be on the hook for all nuclear construction costs. But it doesn't end there. Add the costs of nuclear fuel, ongoing maintenance, and the storage of the nuclear waste, and the costs are astronomical. S.C. ratepayers are already paying for the failed V.C. Summer nuclear plant after it was abandoned in 2017. That failed nuclear project ultimately bankrupted SCE&G and Westinghouse. Several utility executives were convicted and served prison or home detention sentences for their role in covering up those cost overruns. Remember too that those same utility executives hid the independent Bechtel report from the Public Service Commission and the public. Why? So they could continue to get their millions in cash bonuses by covering up their crimes. If not for a mid-level whistleblower, this cover up would have cost our residents, small businesses and large industries even more damage. Santee Cooper, our state-owned utility, is soliciting proposals to see if others might be interested in buying the partially built nuclear reactors. It seems inconceivable that any entity would want to invest in that failed project, though many companies have shown initial interest. Formal proposals are due May 5. The experts interviewed by Utility Dive wouldn't hazard a guess about how much it would cost to complete V.C. Summer Units 2 and 3. Santee Cooper and Dominion Energy have already made it clear that they have no interest in trying to revive V.C. Summer, even though they still own the site. When all is said and done, neither should South Carolina. We would be foolish to risk repeating those same mistakes again. The bottom line: New nuclear power plants are not a viable option. There's too much risk. Our state's future power generation needs are best met with a mix of existing nuclear plants, existing gas plants, new solar coupled with battery storage, hydro dams and pump storage. Currently, solar panels with storage are the lowest cost option for our state's electricity generation. During an earnings call Wednesday, NextEra Energy CEO John Ketchum said the U.S. must remain realistic and pragmatic about its energy policies. 'We need to be practical about when technologies will be available at scale and how much they'll cost when they show up — all of which factors into how much Americans pay on their electric bill each month,' he said. Low-cost renewables and battery storage should be used as a 'critical bridge,' he said. 'We cannot isolate ourselves to just a couple of technologies, like gas and nuclear, which are much more expensive than they've ever been and take far longer to build.' Small modular nuclear reactors are 'still 10 years away at scale in the best of scenarios,' he added. South Carolina should think twice about building more nuclear power plants. Nuclear power plants are just too expensive to build. And the small modular nuclear reactors are a decade away from being a viable alternative.

Opinion - Trump wants to deregulate. Progressives should help him.
Opinion - Trump wants to deregulate. Progressives should help him.

Yahoo

time08-02-2025

  • Business
  • Yahoo

Opinion - Trump wants to deregulate. Progressives should help him.

President Trump has made deregulation a priority and charged Elon Musk's Department of Government Efficiency with suggesting ways to cut red tape. Some progressives are cautiously supportive of deregulation. More should be. From Jimmy Carter to Sen. Ted Kennedy (D-Mass.), progressives once saw the wisdom of cutting red tape — especially if that tape tied the hands of consumers and would-be competitors in order to privilege industry insiders. After the election, Sen. John Fetterman's (D-Pa.) former chief of staff, Adam Jentleson, encouraged Democrats to embrace 'supply-side progressivism,' calling for 'limited deregulation that advances liberal policy goals.' He pointed to successful Democratic candidates like Marie Gluesenkamp Perez (D-Wash.) and Jared Golden (D-Maine), both of whom have raised the alarm about overregulation. Vice President Kamala Harris recognized that the regulatory state sometimes hurts those whom it is supposed to help. In campaign proposals to address the housing crisis, she vowed to 'take down barriers and cut red tape, including at the state and local levels.' Cautious Democratic support for deregulation may surprise those who think only of the Sen. Elizabeth Warren (D-Mass.) approach. Warren once claimed that 'deregulation' was 'just a code word for 'let the rich guys do whatever they want.'' In reality, regulations often help the rich guys at the expense of consumers and fair competition. New Deal regulations, for example, forced prices up in more than 500 industries, causing consumers to pay more for necessities like food and clothing when a quarter of the workforce was unemployed. Economists have documented similar price-raising regulations in agricultural, finance and urban transportation. In other cases, regulations require customers to buy certain products such as health insurance. Licensing rules protect incumbent service providers in hundreds of occupations despite little evidence that they protect consumers from harm. More subtly, regulations can protect industry insiders by limiting the quantity of available services. State certificate-of-need laws in health care, for example, limit dozens of medical services in two-thirds of states, raising prices, throttling access, and undermining the quality of care. That's one reason why Rhode Island's Democratic governor wants to reform his state's certificate-of-need laws. If you don't believe that regulations protect big businesses instead of their customers, take a closer look at how firms lobby. In 2012, the National Electrical Manufacturers Association lobbied to maintain a ban on incandescent light bulbs. Why? Because it raised the costs of smaller, rival firms that specialized in making the cheaper bulbs. Local car dealerships lobby to preserve state restrictions on direct car sales, which limit potential competitors that sell online. In international comparisons, researchers find that heavier regulatory burdens depress productivity growth and contribute to income inequality. In the U.S., the accumulation of regulations between 1980 and 2012 is estimated to have reduced income per person by about $13,000. Since low-income households tend to spend a greater share of their incomes on highly regulated products, they bear the heaviest burden. Progressives can help break the symbiotic relationship between special interests and overregulation. Indeed, they've often been the first to identify the problem. Writing a century ago in his book 'The New Freedom,' President Woodrow Wilson warned that 'regulatory capture' would grow as government itself grew: 'If the government is to tell big businessmen how to run their business, then don't you see that big businessmen have to get closer to the government even than they are now? Don't you see that they must capture the government, in order not to be restrained too much by it?' The capture Wilson warned of took root. By the early 1970s, progressive consumer advocates Mark Green and Ralph Nader were noting that 'regulated industries are often in clear control of the regulatory process.' The problem was so acute that President Jimmy Carter tapped economist Alfred Kahn to do something about it. In his research, Kahn meticulously showed that when 'a [regulatory] commission is responsible for the performance of an industry, it is under never completely escapable pressure to protect the health of the companies it regulates.' As head of the Civil Aeronautics Board, Kahn moved to dismantle regulations that sustained anti-consumer airline cartels. Then he helped abolish the board altogether. Liberals like Nader and the late Sen. Ted Kennedy (D-Mass.) supported the move. Kennedy's top committee lawyer, future Supreme Court Justice Stephen Breyer, later noted that the only ones opposed to deregulation were regulators and industry executives. Their reform efforts unleashed competitive forces in aviation that had previously been impossible, opening up airline routes, lowering fares and increasing options for consumers. It's an embarrassing truth for both Democrats and Republicans that none of Carter's successors, including Ronald Reagan, have pushed back as much as he did against the regulatory state. Trump faces an uphill battle. He'll stand a better chance if progressives acknowledge once again that lower-income Americans stand to gain from deregulation. Matthew Mitchell is a senior fellow at the Fraser Institute, a senior research fellow at the Knee Regulatory Research Center at West Virginia University, and a senior affiliated scholar at the Mercatus Center at George Mason University. Adam Thierer is a resident senior fellow in Technology and Innovation at the R Street Institute. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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