| | | | |  | | By Arianna Skibell | | Presented by |  | | | |  Wind turbine blades for South Fork Wind are stored at State Pier in New London, Connecticut. | Seth Wenig/AP | Clean energy projects could get a boost this week when the Federal Reserve slashes interest rates. The decision — expected Wednesday, with the major question being how big the cut will be — is unlikely to prompt a sea change, as the market has anticipated the move for months. But it could signal an important directional shift for capital-intensive industries such as offshore wind and emerging technologies like green hydrogen and carbon capture, writes Benjamin Storrow. The Fed began raising rates in 2022 to combat inflation, leading the cost of clean energy projects to climb. That blunted the potency of President Joe Biden’s landmark climate law, the Inflation Reduction Act, which is set to inject more than $369 billion into clean energy development. Supply chain disruptions and the rising cost of materials and labor have only compounded the disruption, sending project prices soaring. The market dynamic has been particularly painful for offshore wind, where a single project can total billions of dollars. In 2023 and early 2024, developers canceled nearly 40 percent of all offshore wind contracts in the country. Newer technologies such as carbon capture and green hydrogen have also been hit hard, as investors expect larger profits when taking the risk of lending to emerging industries. Still, solar and onshore wind have continued to grow at a steady clip because demand remains strong and the financial model for building them is well established, analysts told Ben. That growth is just not as strong as some forecasters predicted after Congress passed the climate law in 2022. Permitting delays and project backlogs have contributed to slower installations, leading analysts to downgrade their forecasts for how much this spending will help the fight against climate change. Last year, the Repeat Project predicted U.S. carbon pollution would fall by up to 41 percent below 2005 levels by 2030. Now they predict emissions will fall by up to 34 percent. A rate cut this week would likely boost investor confidence amid uncertainty around the outcome of November’s election. “I think we could see a very different environment for investments in 2025, based on the election outcome, based on the Fed and based on inflationary pressures in the supply chains for these projects and technologies,” Alex Dewar, who leads Boston Consulting Group’s work on carbon capture and carbon removal, told Ben.
| | | It's Tuesday — thank you for tuning in to POLITICO's Power Switch. I'm your host, Arianna Skibell. Power Switch is brought to you by the journalists behind E&E News and POLITICO Energy. Send your tips, comments, questions to askibell@eenews.net.
| | | | A message from Enbridge: To meet America’s energy and climate goals, we must move past the renewables vs. conventional energy debate and embrace a diverse energy strategy, including more renewables, responsibly sourced fossil fuels, and carbon capture. New sectors, such as large-scale data processing and advanced manufacturing, require significant energy resources. This growing demand highlights the urgent need for modernized infrastructure to ensure energy can be delivered efficiently and sustainably across the country. Learn more. | | | | | | Today in POLITICO Energy’s podcast: Zack Colman breaks down why a leading U.S. steelmaker is potentially abandoning a $500 million federal grant, and how that could be a major setback for President Joe Biden’s efforts to make American manufacturing climate friendly.
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Rep. Buddy Carter (R-Ga.), chair of the Energy and Commerce Subcommittee on Environment, Manufacturing and Critical Materials. | Carolyn Kaster/AP | GOP warms to green tax credits
House Republicans increasingly recognize that scrapping all the clean energy tax credits in the Democrats’ 2022 climate law could prove politically unpopular — maybe even untenable, writes Emma Dumain. More and more GOP lawmakers are coming forward to say they don’t want to repeal those Inflation Reduction Act credits if their party wins control of the House, Senate and White House in November. Some are even prepared to buck Donald Trump on the issue. Energy woes could 'shut everything down'
Sen. Mike Rounds (R-S.D.) said the nation's supply of energy, or lack thereof, is one of the most crucial challenges facing American dominance in artificial intelligence. During POLITICO's AI and tech summit today, Rounds said the energy race for AI is something that “could shut everything down” if the U.S. doesn’t get it right, writes Mohar Chatterjee. “You've got to have energy available to be competitive with the rest of the world," Rounds said. New EU green chief won't ax nuclear
European Commission President Ursula von der Leyen appointed Spanish politician Teresa Ribera as her second-in-command, tasking her with overseeing a vast portfolio including climate and energy, write Zia Weise and Karl Mathiesen. Ribera, who now faces a confirmation hearing in the European Parliament, hinted Tuesday that she would not oppose the expansion of nuclear power in Europe, as the industry's advocates feared, write Victor Jack and Max Griera.
| | Colliding crises: Climate change will escalate the child health crisis due to malnutrition, says Bill Gates. Electric future: Norway is the first country to have more EVs than gas-powered cars.
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Former President Donald Trump, the Republican presidential candidate, speaks last week at a campaign rally in Charlotte, North Carolina. | Alex Brandon/AP | Trump is promising to make finance great again by rolling out his own cryptocurrency business. It will come with a climate cost. Federal banking agencies are coming under scrutiny again for their efforts to address the financial threats of climate change alongside peer regulators overseas. Azerbaijan, host of upcoming global climate talks, urged calm amid political discord over fossil fuels and who pays for the transition to clean energy, as accusations of human rights abuses threaten to overshadow the international conference. That's it for today, folks! Thanks for reading.
| | | | A message from Enbridge: America’s economy with advanced manufacturing practices and rapidly growing data-intensive sectors is demanding more energy. Debate ensues around which energy source is the right one to generate affordable, 24/7 energy and lower emissions. It’s a question best answered with “all of the above,” but differing and hardened perspectives are driving a permitting and legal gridlock that results in none of the above — zero progress toward either goal. For example, it takes an average of 10 years to build new power lines in the U.S and anywhere from 2 to 8.5 years to bring a greenfield interstate pipeline into-service, according to ARBO, an energy infrastructure analytics firm. Recognizing a smart energy transition utilizes a mix of energy sources —more renewables, more responsibly produced natural gas and oil, more carbon capture, and more energy efficiency and innovation—is one of four steps required to meet America’s energy needs. Learn more. | | | | | | | Follow us on Twitter | | | | Follow us | | | | |
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