← Open Circuit
Open Circuit
Trump's energy paradox
00:51:40
In our first episode, we dissect the chaotic energy policies in the early days of Trump's second term.
Loading summary
Transcript140 lines
- [00:02]
Jigar Shah
Latitude Media podcast at the frontier of climate technology.
- [00:07]
Stephen Lacy
Another listener compared our relaunch to a Led Zeppelin reunion tour. I'm not sure if that's a compliment or a subtle dig.
- [00:15]
Jigar Shah
I feel like we just took a four year break to go find ourselves. It's like remember when the Beatles took like a little break while they were having like a little fight and then they came back together?
- [00:25]
Kathryn Hamilton
Actually, I think we took four years to go out and have more interesting things to talk about when we came.
- [00:29]
Stephen Lacy
Back without the lsd.
- [00:32]
Jigar Shah
You don't know. Well, actually I do have receipts. They had to drug test me regularly in the government.
- [00:42]
Stephen Lacy
From Latitude Media this is Open Circuit the energy transition decoded this week, we're separating signal from noise. The Trump administration is explicitly targeting clean energy at the exact moment the industry has become dominant. It's a fascinating test of whether raw political power can override market momentum in the basic demands of a growing power grid. The first three weeks of the second Trump term have been marked by executive orders, funding freezes, permit delays, disappearing data, a flood of activity that's just so hard to keep up with. So in our first episode we're going to sort through it. We'll examine which threats are real, which ones are noise, and how to think strategically about this moment.
- [01:29]
Event Announcer
Mark your calendar for June 12, 2025. Latitude Media is holding its fourth Transition AI conference in Boston. This is our yearly event on the AI Energy nexus. This year's theme, Energy Infrastructure in the era of AI driven load growth, the urgency to build new data centers quickly combined with zero carbon commitments from hyperscalers is driving innovative thinking about how to develop energy and resource efficient computing capacity. It's also raising questions about how to pay for the infrastructure and how quickly clean firm options can scale. We're going to bring together investors, developers and tech companies to chart a path forward and you can get your ticket@latitudemedia.com events.
- [02:15]
Stephen Lacy
I'm Stephen Lacy, Executive Editor at Latitude Media. I am joined by my co host Jigar Shah and Kathryn Hamilton. Jigar Shah is a clean energy investor and was director of DOE's Loan Programs Office up until just a few weeks ago. Welcome to the other side, Jigger.
- [02:30]
Jigar Shah
Ah, so good to be on the other side.
- [02:32]
Stephen Lacy
Do you feel liberated having a microphone in hand and no press office to run your comments through?
- [02:37]
Jigar Shah
Yeah, exactly. I, you know, there are lots of things that I wish for, but spending more time with you guys is at the top of the list.
- [02:44]
Stephen Lacy
Katherine Hamilton is an energy policy expert and co founder of 38 North Solutions. She's been a key figure in many of the policies and regulations guiding clean energy here in the U.S. katherine, how are you?
- [02:55]
Kathryn Hamilton
I'm great. I'm glad that we're back. I just got done reading a novel called the Ministry of Time about time travel, and I kind of feel like we're in that place right now.
- [03:03]
Stephen Lacy
It's nice to see you sitting on the floor surrounded by your papers. You look like a detective with an evidence board.
- [03:08]
Jigar Shah
Red lines, red string everywhere.
- [03:13]
Stephen Lacy
No one will say you're unprepared. So it's our first episode. It's probably safe to say that a large number of listeners followed us on our previous show, the Energy Gang. We co launched and co hosted that podcast for eight years starting in 2030. And the industry has gone through so many different cycles over the past dozen years or so, and it's become a really strong pillar in geopolitics, global trade and domestic industrial policy. And both of you have driven those cycles in your own ways here in the US So before we delve into the upheaval caused by the Trump administration and take stock of the moment, I want to get your take on the state of the energy economy on January 19. What did President Trump inherit? Jigger.
- [04:00]
Jigar Shah
I think it was pretty clear that we were entering a period of load growth and that we needed a lot of tools by which to do that. And I think that the ramping was occurring whether it was an enhanced geothermal or nuclear or solar, wind and battery storage. And so I think there was a lot of work that was done, competencies that were put into place. Right. New rules that were put into place. But also I'd say for the first time ever, the electric utilities were being quite open minded around advanced conductors, grid enhancing technologies, other technologies that could really get more out of the grid we've already paid for. And I think people couldn't get enough of virtual power plants. And so for the first time ever, demand flexibility was actually a thing. And that first quarter 22, 22 had been passed in 2020. But I think people actually felt now that money was moving and that folks really wanted to do this. So I think what happened on January 19 and the status of the industry was really one where people thought that we could do big things. They thought that these big challenges were things that we could actually tackle with the tools that we had.
- [05:15]
Stephen Lacy
So this is now a $2 trillion economy. Clean energy. Catherine, what does the U.S. slice of that clean energy economy look like?
- [05:25]
Kathryn Hamilton
Yeah, I would just give some numbers to this. So the US Department of Energy does an energy and employment report every year, and they did one for 2024. Now the one for 2025 hasn't come out yet. I expect it to be even more optimistic. But they showed that US energy sector jobs grew 3% in 2023, which outpaces normal employment growth by by 50%. And of those jobs, clean energy employment counts for about 60% of those jobs. So they grow at a rate in clean energy of like almost 5%, which is more than twice what the rest of the energy sector grows. And if you look at what EIA has put out in their short term energy outlook, which they are still doing, increased generation for renewable energy is the main contributor to growth in US Electricity generation. Don't see that stopping. So looking at both J jobs and generation and capacity, it's booming.
- [06:21]
Stephen Lacy
I think what's striking to me about this moment is that there's this huge disconnect between how vast this clean energy economy is and people's perceptions of it. And you saw this extraordinary investment over the last four years or the last couple of years under the ira. And when you look at polling headed into the election, very few people knew about it. And I just wonder how you think, think about that disconnect jigger between how extraordinarily large this industry is now and people's perception of it.
- [06:52]
Jigar Shah
Well, you could say that clean energy is dominant energy. I mean, I think where we are today is that the clean energy industry in the United States in all of its forms invests roughly $500 billion a year, but pays about $200 million a year in influence. The oil and gas industry invests about $250 billion a year and pays about $4 billion in influence. So we're outspent 20 to 1 on influence. And there's lots of reasons for that, right? I mean, we do project finance for most of our assets. And so for every dollar you spend on influence, that's less money that you make in profits, right, because you're taking money out of the cash flows. But in general, I think that there is a realization, I think by the clean energy industry, at least in this moment, that they just can't keep moving forward on good vibes, right? Whether it's the pushback at the county level or at the state level or some of the other things that is happening that are headwinds. Those headwinds are dealt with by people actually investing in influence. And if you don't do that, then people don't actually know how awesome the story is. They don't know how great the contributions are of the clean energy industry in their communities. And so these are the kinds of things that the clean energy industry now has to do as they grow up.
- [08:12]
Kathryn Hamilton
But I also think beyond political power, which I agree has been continually growing, I think all of these changes have been happening very locally. And what you'll find is similar to how people view the federal government. We're starting to see this now as parts of the federal government are being frozen or shut down, that people don't actually notice things until someone tries to take them away from them. And I think if you try to take away what we've already accomplished in clean energy, that's when you're going to have the rub, because everybody is feeling it positively. They may not even realize where it's coming from, where all this good, strong, clean local infrastructure is coming from. And yet if you try to take it away or you try to slow it down, I think that's when you're going to have issues.
- [09:00]
Stephen Lacy
I totally agree. And I think that that will bring us to a conversation a bit later in the episode about how the industry can effect respond to a lot of these policy shifts. So I think it's important for listeners to know that this is not going to be a U.S. politics show. We're going to tackle all kinds of market shifts and business models and deals and a wide range of policy, both on the local level and internationally. Because the story of the energy transition is a story that stretches across almost every sector of the economy. But it's impossible to ignore the political story of the day, the sweeping set of actions on energy coming out of the Trump administration. So that's what we're going to focus on in our first episode. And in the spirit of this show, which will try to just go beyond reacting to headlines, I want to establish a framework for how to think about the flood of policy changes underway. And then in the second half of the show, we'll run through many of the specific storylines and rank them on a signal to noise scale. So the market and political dynamics are very different under this administration than during the first Trump term. In 2016, we had this flat load growth. It caused many tens of gigawatts of aging coal plants to retire in spite of Trump's promise to save the industry. And politically, the administration was just far less aggressive in going after specific clean energy initiatives. So what strikes you all as the clearest difference between the first and second Trump term?
- [10:28]
Kathryn Hamilton
Catherine yeah, I think preparation is clearly the difference. So in the first administration, it took them a little bit to get their sea legs and to come up with a plan. They still were flooding the zone in a lot of ways, but not necessarily on the energy front. But this time they had four years to put together Project 2025. And I hope everybody read it. I read it. I actually focus more on DOE, EPA and FERC chapters in Project 2025. But that really gave us the blueprint for what they wanted to do. And I think they were ready. And so, you know, folks who paid attention to that and saw here are the things they're going to focus on. Now, of course you're going to overlay that with the people that they're putting into the agencies that can help implement those policies. And some of them will bring their own points of view and we can talk through that at some point. But I do think that this administration was much more prepared coming in this time than it was the first time.
- [11:23]
Stephen Lacy
I bought my wife an advanced copy of Project 2025 for Valentine's Day last year.
- [11:28]
Jigar Shah
Man, are you in the doghouse.
- [11:31]
Kathryn Hamilton
It's not gonna talk about foreplay here, but anyway.
- [11:37]
Stephen Lacy
Shigar, what's the biggest difference right now between the first and second Trump terms?
- [11:42]
Jigar Shah
Well, I mean, I find a lot of it really confusing.
- [11:44]
Unnamed Participant
Right.
- [11:44]
Jigar Shah
I think that, you know, on the one hand, the, the first term really was about, you know, abundance in the sense that we had, you know, excess oil production and all of that stuff, I think. But this next term is also about abundance and they want to cut electricity bills right in half and they want to achieve electricity abundance for load growth and all this other stuff. But yet I think that the actions that they're taking around freezing payments and some of the other things are going to lead to higher costs and a lot more uncertainty in the private sector. I think a lot of investors are confused and saying, wait a second, do you want me to invest? Do you not want me to invest? Do you want me to make these 30 year commitments in new power plants? Or are you sending me mixed signals? I think that one of the core tensions in this particular term of Donald Trump is, as you were talking about with Project 2020, that is really not really energy related, even though there are energy chapters. That's really, how do we make the government less legitimate? How do we make the government less large? But they separately have very large energy goals. And I don't think the two square with each other. And so a lot of, I think what I'm trying to figure out is who's going to win that battle? Is it the delegitimization of the government, is it figuring out how to not provide the certainty that investors want, or is it going to be the folks who actually want energy abundance and, you know, low energy costs?
- [13:18]
Stephen Lacy
Skipping ahead a bit to the freeze, I think that the characterization, certainly the Trump administration was prepared with all their executive orders, but I don't think we can ascribe a whole lot of strategy to this approach. Because to your point, Jigger, if you're going to freeze these contracts, if you cannot trust the government to live up to its end of the bargain, how are people going to make investments in next generation nuclear or carbon removal? Like all these things that the administration has said it wants to support, it's completely contradictory to this idea of energy abundance. And so there's, like, very little strategic thought to these actions. And I think it could be extremely detrimental to bringing in investment for the set of technologies that this administration does want.
- [14:08]
Jigar Shah
And they came out hot in a way that I thought was confusing.
- [14:10]
Unnamed Participant
Right.
- [14:10]
Jigar Shah
It's one thing to say we're going to evaluate all of these, you know, grants and loans before we put them out. It's normal and customary for us to get our sea legs and really understand what's happening before we let money go out the door. But they came out hot and sort of said, well, and actually we may not ever want to, like, unlock these grants and loans. Right. And so that, I think, really, you know, scared people.
- [14:35]
Kathryn Hamilton
Yeah. And I don't think we're there yet with losing complete trust, because what folks are being told is we are reviewing, we're going to pull out, for example, anything at Department of Energy that has to do with diversity, equity, inclusion. We're going to pull out any community benefits plans from any of the grants, and then we'll try to renegotiate. Well, if you have a signed contract, that's actually a breach of contract, but what it's causing is not necessarily distrust. But as Jigger said, it's confusing. And people are trying to figure out, how do we manage this? We can manage it. We can figure out how to pivot. We still can get things done that we want to get done. We feel like the money is still there and it has been committed to us. We just have to understand how best to react to some of what they're being asked to do. And I think that's what the issue is right now is uncertainty and people trying. And I spend all of my days with my clients trying to figure this out. Like, how do we navigate this? And right now the administration, especially at Department of Energy, there are not that many people in there who've really set forward all of those policies. Yes, there's some memos that have come down, but the secretary just got over there last week. They're still building up their teams, and I think that's causing just a lack of clarity in what the ultimate vision is going to be there.
- [15:55]
Stephen Lacy
So the current playbook is very well and long articulated by people like Steve Bannon, Stephen Miller, and even Elon Musk. Flood the zone. Right. Do so many things at once, it makes it really difficult to follow and respond to things. So what's your mental model for how to devote attention to what matters? Jigger.
- [16:15]
Jigar Shah
I just ignore it all. And then I read it, like, sort of 10 days later. And what you find is that 10 days later, like, a court case has already happened, something has already been stayed. Like, some things have already been pulled back. Like, I really think that absorbing all of this stuff in the moment and trying to, like, figure out your chess moves in the moment is not only a waste of time, it actually creates even more chaos, and it allows you to miss a lot of things.
- [16:45]
Unnamed Participant
Right.
- [16:46]
Jigar Shah
And so I think going back to everything sort of like 10 days later and actually looking at it, you know, with fresh eyes, like, I mean, a lot of it really was noise.
- [16:55]
Unnamed Participant
Right.
- [16:55]
Jigar Shah
Some of it's not, and we'll have to see how it plays out. Like, for instance, the part that I'm really watching for are things like the instruction sets at the Army Corps of Engineers and the Bureau of, you know, Fish and Wildlife and figuring out where that's going to go.
- [17:10]
Stephen Lacy
In the Biden administration, you're talking about permitting.
- [17:12]
Kathryn Hamilton
Yeah.
- [17:12]
Jigar Shah
And in the Biden administration, remember, they came out hot against oil and gas in the same breath and then were forced to pull all of it back after the Ukraine conflict. And they should have never done it in the first place, I think, as we all know now. And so I think turnaround is fair play. I mean, I really do think that the wind and solar pauses at the Army Corps, Engineers and Fish and Wildlife are retribution for a lot of the stuff that the Biden administration to the oil and gas industry, which we talked about actually four years ago on the podcast. And I think they're going to be forced to pull it back, too, just because it's 90% of everything that gets deployed in the grid.
- [17:50]
Unnamed Participant
Right.
- [17:50]
Jigar Shah
And so at some point, if none of that stuff gets deployed on the grid, we're going to have rolling blackouts.
- [17:55]
Stephen Lacy
Yeah, I think that's such an important point to make because the first few weeks of any administration is the administration asserting its power and its strategy and then the rest of the term is reacting to things out in the world. And policies can take dramatic shifts as you react to changing conditions. So that's a really important point to keep in mind. Katherine, what's your mental model?
- [18:23]
Kathryn Hamilton
Yeah, so I had at first started by not reading the news and then I realized I have to. I have to because so many things are being broken. It's really easy to break things. It's much harder to put them back together. So you kind of have to hold two things in your head. One is there's a lot of bad stuff going on. And I mentioned that my son is a junior at a program at a university. It's an inclusion program. There are almost 400 of them throughout the country at universities to try to ensure that people of differing abilities are able to have a strong post secondary education and actually become better citizens of the world. And the Department of Justice is going after any program that has inclusion with criminal investigations. That's something that would immediately affect my family and their well being. I have to keep that in my head while also having clients who really need me to focus on what is the business at hand for clean energy and how can I help them? How can we come up with practical solutions? So I put those into kind of two categories. One is the administration. What is EPA doing with clean energy programs? What is DOE doing? How can we build our cases to them? How can we monitor and track and make sure that we're talking to new people in the administration in a language in which they will understand, understand and accept? And that's mostly for inflation Reduction act and infrastructure bill funding. On the other side is Congress. How do we talk to Congress? Like what is Congress doing, especially on the Inflation Reduction act and with tax credits and programs and trying to be very practical about what do we need to watch for and what can we actually do to impact that. And I try to keep those worlds quite separate because what I don't want to do is hit a wall that's caused by the things that could be personally affecting me, but that don't necessarily impact my job. So I don't think we want to be ostriches with our heads in the sand, but at the same time we have to come up with real solutions.
- [20:21]
Stephen Lacy
What are the most striking on the ground impacts that you have all heard so far? And Jigar, what are you hearing from former colleagues in government? What are you hearing out in the industry?
- [20:30]
Jigar Shah
Well, I think that in terms of government, there are certainly programs that are being targeted. The Office of Clean Energy Demonstrations is clearly being targeted at the Department of Energy. And I think the loan program's office has been largely. Okay, you know, they just wired money out the door for Montana renewables. I mean, they've been pretty clear now about which sectors are going to be pushing forward loans, new loans in. And so I think the loan programs office, I think, is moving forward. I think there's lots of other offices that are still yet to be determined how aggressively they're going to continue to try to close outstanding grants and pursue other ones.
- [21:14]
Unnamed Participant
Right.
- [21:14]
Jigar Shah
I think on the industry side, I'd say that people are quite scared. And I mean, I think it's surprising, but I think there's a lot of people who thought that this was not the outcome that they expected. And I remind them they should have just read Project 2025, but they thought that that wasn't real. But I would say that there are platforms, for instance, that are for sale now.
- [21:35]
Stephen Lacy
So you're talking about development platforms.
- [21:37]
Jigar Shah
Yeah, that we don't have cash to make it through October and we don't know what's going to happen and we can't wait for certainty. And so we're selling out.
- [21:45]
Unnamed Participant
Right.
- [21:45]
Jigar Shah
So I think you're seeing the valuations for assets really becoming a lot more reasonable. But also remember, during the Biden administration, there was a big crackdown by the IRS on the renewable energy sector for tax credit and tax equity policies around step up in basis and some of that stuff. And I think the Trump administration is continuing all of that work. And so I think the way in which tax equity is structured in the United States is changing dramatically. So I think that there's actually just a lot of people that are trying to figure out what to do with their projects this year because many of them will be delayed by the Fish and Wildlife and Army Corps of Engineer processes that they thought were a formality and are no longer a formality.
- [22:32]
Kathryn Hamilton
Yeah. So Kay Kaufman, who's the Mid Atlantic bureau chief at RTO Insider, covered the NASIO conference, which is the association of State Energy Officials, which recently had their big conference in D.C. and Lou Herkman, who is the new acting Assistant secretary Secretary at the Department of Energy's Energy Efficiency and Renewable Energy, basically said, we're going to do 180 degree spin on federal energy policy, retreating, of course, from the goal of cutting greenhouse gas emissions. He said there's no energy transition. Fossil fuels are and will continue to be the bedrock of American civilization. Renewable energy will not include solar, wind, or storage. And transmission should not be built to optimize the flexibility and reliability that these clean energy resources bring to the grid. He's redefining renewable energy as nuclear and geothermal. So they are trying to change the way they talk about energy completely. And I worry about the impact that's going to have on some of those programs. At the same time, some of these are very popular and they're things we can't stop. I mean, you can say this transmission is not going to be there to serve renewables, but electrons are electrons. I've never seen a green one. So, like, it doesn't really matter. We're gonna have to build transmission. We're gonna have to use advanced transmission technologies. We're gonna have to continue to do a lot of what we're doing in order to meet demand. So you'll hear the language, but the reality is what we really need to.
- [23:55]
Jigar Shah
Watch and the thing I don't understand is how the statement that he made lends itself to affordability or reliability.
- [24:03]
Unnamed Participant
Right.
- [24:03]
Jigar Shah
Because that, to me, I think, is the key to this whole thing is affordability.
- [24:07]
Kathryn Hamilton
And exactly.
- [24:08]
Jigar Shah
The stuff he's pushing is the most.
- [24:10]
Kathryn Hamilton
Yes, of course.
- [24:11]
Stephen Lacy
How is the industry reacting so far? I mean, they've been relatively silent. I think there's probably a lot of fear in the industry. Certainly we're not seeing the same kind of negotiating tactics we see from other industries like the tech industry, where they cozy up to the president, maybe take a deal that was already in the works and say, thank you, President Trump, we wouldn't have been able to make this deal without you. Use basic flattery to get him on your side. We see almost no strategy at this point. How should the industry react? How is it reacting at this stage?
- [24:50]
Kathryn Hamilton
Oh, I kind of disagree with the premise of that, because last week there was a huge hill day with all the clean energy groups coming together with hundreds of people having hundreds of meetings on the hill to really push for renewable energy dominance, clean energy dominance. And so they are actually becoming much more organized. They are sort of honing their messaging to try to be not dissimilar from the new administration's messaging. I think that's not the only thing we need to do, but they're definitely doing that. I think that there are a lot of other things that we can be doing continually and not just the industry. So from the industry standpoint, making sure that. That your members of Congress and senators understand the impact that your industry is having in their district or state is super important. Those are real jobs. Those are people who live in their communities and vote for them. So that is really, really important for people to understand. It's also important for people just themselves personally, to be calling in and letting their members of Congress know that they care about whatever it is you care about. This is a democracy. This is how democracy works, is you call people. And I think Congress so far has not stepped up to a lot of what the administration is doing, but I think they're going to have to. And I think you start to see some of the chinks in the armor right now. But I also think that we have to keep pushing and keep pushing.
- [26:17]
Jigar Shah
Yeah, I think Katherine's right. There's been a lot of work on Hill Days, which I think is great. I think the bigger thing I'm seeing, which frankly is new for the industry, but is something that's very welcome, is a lot more events in district. Coming to D.C. is fine. But honestly, what's more valuable is actually going to people's district offices with people who live in the district and say, I live here. Hello, my name is this, like, I'm right here. Right. And we have 955 new manufacturing facilities that have been announced or under construction around the country.
- [26:57]
Unnamed Participant
Right.
- [26:57]
Jigar Shah
And what was really telling is when you saw the House Ways and Means hearing, like, two and a half weeks ago, where Republican after Republican after Republican came up and said, you know, I hate the ira, but these five provisions are important to my district. And then the next one was like, these other five provisions are important to my district. And by the end of the hearing, I think, like, there were three Republican champions for every IRA provision. I think that's super valuable. But the one thing I would agree with you on, Stephen, is I do think that there are a lot of really smart people in Washington who are saying that the fact that Lindsey Graham has put forward his budget resolution and the House is still not put together their budget resolution means that they're just not gonna be able to get things done. And so don't worry. It's all gonna fall apart, and we actually just don't need to worry about it. Right. And that is just not true. True. Like, if you think that the Republicans on the Hill are not going to pass a bill that actually extends the Trump tax cuts, like, you're nuts. And if you think that it's not going to be super easy to peel off five Democrats to vote for it just by giving them, like, a salt deduction increase In New Jersey or whatever. It's not that hard.
- [28:11]
Unnamed Participant
Right.
- [28:12]
Jigar Shah
So like when you combine all this stuff into one big bill, the IRA provisions may not be what people are voting for or against. It might be other parts of the one big bill. So this is like something that people just really have to take seriously. I think there's some people who are like, oh, I just think that congressional dysfunction will save the ira. And I was like, no, what will save the IRA is people actually understanding how important it is in their district. And so focus on that.
- [28:40]
Stephen Lacy
Catherine, you looked like you were disagreeing there.
- [28:42]
Kathryn Hamilton
Yeah, yeah. I mean, the Republicans have a one vote margin I think right now in the House. And my sense is the Dems aren't gonna give a lot at all, especially in reconciliation. I mean, they need Democratic votes to get a lot of things done like appropriations bills and debt ceiling increase and all that. So you're right, jigger. They're gonna have to make some deals. But I think the Democrats, and this is why I think we need to appeal not just to Republicans, but also to Democrats. We need to shore up both sides. I don't think you can ignore Democrats because the Republicans have more votes right now, because they barely have more votes. So we have to make sure we shore everybody up and we have to get grassroots support. So yes, people who are in clean energy, but also the mayors of the towns where those projects are being built or the governors of those states where those projects are being built, and also their supply chain, all of those people's people who are impacted need to be able to speak and to influence their members of Congress, not just with money, but with phone calls. I know that the switchboards are like breaking down there because they can't handle the volume of economy. It's not just about clean energy. Yeah. But people do need to know that they are able to make a difference and to weigh in and to express their opinion. That's part of the Constitution. The other thing I would say is that corporate CEOs are going to have a lot to say. And it's not just clean energy CEOs, but it's others. It's OEMs like Jim Farley, the CEO of Ford is very, very worried about tariffs and he should be. All of Detroit depends on Canada too. It's one big ecosystem. And having tariffs on Canada are going to be vastly destructive. So having a corporate CEO speak up is really important. And having CEOs of those corporates who are trying to build factories, who are also just trying to build data centers that need energy, they all need to speak up. And in the end they're going to be the market pull as opposed to any kind of regulation that the federal government puts into place.
- [30:41]
Stephen Lacy
Do you believe still that the administration can't meaningfully hinder progress?
- [30:48]
Jigar Shah
Yeah, I mean, look, I think when you think about where we are today and this is where the dominant energy stuff actually really matters, and I think people have a hard time with wrapping their brain around it today, you know, solar power installed is, you know, $30amegawatt hour without the tax credits. It's $50amegawatt hour. That's more expensive than $30amegawatt hour. I get that. But that's not out of the money.
- [31:14]
Unnamed Participant
Right.
- [31:14]
Jigar Shah
New Natural gas is $95amegawatt hour.
- [31:17]
Unnamed Participant
Right.
- [31:18]
Jigar Shah
And so, like, I think part of our challenge here is recognizing that yes, solar power would be more expensive if you rescinded some of the tax provisions. And yes, it would still be the lowest cost way of adding electricity to the grid. And it would, you know, like, continue to provide all this benefit. And they've got the queue positions in the interconnection queue, they've got all their land set up, they've got all the rents and you know, like, sort of benefits that they're providing to the community. Right. There's a lot of reasons why people still want to do it.
- [31:54]
Unnamed Participant
Right.
- [31:54]
Jigar Shah
And so I think that the argument that some people have been sort of making in the past, which is that if you get rid of this thing, then our industry is going to die. No, it's not going to die at all. It's going to be fine. It's just going to be more expensive for everybody for electricity. And that's your choice. If you want more expensive electricity, rescind the tax credits. If you don't want more expensive electricity, fine. But the actual trajectory of the industry is fine. And that's clearly true for electric vehicles. Like, I don't know what is going on in the narrative with electric vehicles, with the NEVI program and everything else, but electric vehicles have never been stronger. It has never been better. When you think about the fact that we have like 54 models right now that you can choose from, from any, like SUVs to crossovers to small vehicles. And on top of that, the lease deals that you can get right now, you can get into an EV for like $199 a month right now. It's nuts how affordable EVs are. And like EVGO is now basically profitable because of like, they've got huge increases in the use of their DC fast chargers. And so like I just think that a lot of the doomerism around EVs and batteries and solar like is not warranted. It's just yes, you know, it might be more expensive if the tax credits go away, but it's still dominant energy.
- [33:16]
Kathryn Hamilton
Yeah. So clean energy can go out the door so much faster. And you know, even just looking at how demand is going to grow, getting just distributed energy resources out there, getting batteries, including all kinds of batteries out the door we can go, we can move a lot faster than natural gas plants. And by the way, there's like a shortage of turbines anyway. So it's going to be really hard to get some of those. No matter what kind of policies you put in place, it's going to be hard to implement some of what the Trump administration wants to do. So I think we have a lot on our side.
- [33:51]
Event Announcer
A quick break here to tell you more about Transition AI. Latitude Media's conference on the AI energy nexus, the race for AI supremacy is already having a profound impact on digital and energy infrastructure. Tech giants see AI as the next industrial revolution and they're feverishly planning and building new data centers equipped with purpose built computing, cooling and power solutions for this new age. Transition AI 2025 will bring together leaders in tech, finance, power markets and energy and digital infrastructure to explore how the landscape and options for powering data centers is evolving and if it can still be accomplished sustainably. Chigarh Shah, Kathryn Hamilton and I are going to be there recording a live.
- [34:29]
Stephen Lacy
Episode of Open Circuit.
- [34:30]
Event Announcer
And Laura Pierpoint, host of the Green Blueprint, will be recording a live episode as well. And we'll have lots of other panel discussions and presentations. The event is happening June 12th in Boston, so get your tickets@latitudemedia.com events.
- [34:51]
Stephen Lacy
All right, let's narrow the aperture a bit and talk about some of the specific storylines that have shaped the past few weeks, from Elon's Doge crusade to frozen funds, which we already talked about a little bit. I want to use a signal to noise scale here to rate each of these stories. So when you comment on the story, I want to get your rating. Is it noise, which is like mostly political posturing, unlikely to fundamentally impact projects or investment? Is it static? It'll create real friction but not existential. Or is it a clear signal, some fundamental threat that could disrupt projects, markets, business models like a sign of an effective long term strategy. So let's get through the list. First up up is one that we discussed a bit in the first half of the show, which is frozen funds. In the first hours of the presidency, Trump issued an executive order freezing IRA spending, which he called Green New Deal spending. A court ordered the White House to unfreeze the spending, but it appears many energy and climate specific programs are still tied up. And then there's this, now this brewing showdown with the courts. So is this noise static or a clear signal of disruption to come, Catherine?
- [36:09]
Kathryn Hamilton
Yeah, so I think it's static. I do think that the funds that are obligated will be dispersed. I mean, like, I just don't think that they can legally, the Supreme Court I don't think will allow that to happen. So I consider that like a lower risk for the funds that have been obligated.
- [36:24]
Stephen Lacy
And how disruptive has this been so far, Katherine, from what you're hearing?
- [36:28]
Kathryn Hamilton
It's been extremely disruptive. There are people who can't draw down their funds that were contracted at EPA and da. And so, yes, it stopped projects in their tracks. And when you not only have employees on the other end of those projects, but also orders for manufacturing on the other end, it does slow everything down quite a bit. So I think that'll be freed up. I think that will be loosened because of the legal constraints. But it's not just noise.
- [36:57]
Stephen Lacy
Let's turn to permitting. Now. You also mentioned this jigger. In another opening move, the administration halted permitting on public and private lands for renewables projects. And there's been some confusion about whether the pause on permitting has been lifted. Is this signal or noise jigger?
- [37:16]
Jigar Shah
It's definitely a signal. It's bad. And I think it's in direct, like I said before, I think it's in direct response to the Biden administration doing the same thing on the oil and gas side. And I think it needs to stop for both sides. I think we need to stop, stop using obscure federal processes to hurt different technologies, whether it's the XL pipeline or whether it's oil and gas drilling. Everything just needs to go to normal order. If people want to stop a project, they should stop a project with a local permit in the local jurisdiction. They should not be using the federal government to stop projects.
- [37:50]
Stephen Lacy
So do you think it's durable policy under the Trump administration?
- [37:53]
Jigar Shah
Yeah, I think this is going to be durable until it's untenable, which is what happened with the Biden administration. At some point it was untenable for the Biden administration not to return back to normal order. And so then they did return back to normal order. And so at some point I think the Trump administration will realize that not having all these power plants go online will actually be really bad for the grid. But I don't know when that's going to happen. I think it's going to be really painful between now and then.
- [38:22]
Stephen Lacy
Then let's go to some of the people shaping the administration. I want to turn first to John Sneed, who's back as director of the loan programs office. He held that role under the first Trump term. Bloomberg reported that Sneed was considering canceling legally binding loan guarantees made under your 10 year jigger. Is this noise or a real signal of what's to come under that office?
- [38:44]
Jigar Shah
It was false reporting. And I mean John Sneed is a great guy and he basically ran LPO under the first Trump administration. You know, he's collecting information and how every single loan works and what the CPS to close are and all that stuff. I think there's somebody who misinterpreted that as he's trying to find loopholes by which to cancel loans. Like that's not true. I think they just wired money to Montana renewables and so like I think, I think everything loan programs office is working fine and frankly I think that they won an election. So they have the ability for deals that have not obligated funds to Catherine's point, to line item veto the stuff that's in the pipeline and say we don't want these 12 deals going through and we want these other ones going through and that's their choice.
- [39:29]
Unnamed Participant
Right.
- [39:29]
Jigar Shah
But like for closed loans and loans that have obligated funds, I think they'll honor all those loans.
- [39:34]
Kathryn Hamilton
Yeah, I of course would agree with Jigger on this, but I also again think that since so many folks who worked for the LPO were contract employees that we still need people there to be able to process these and make sure that they go forward as planned. So that would be my concern is people.
- [39:54]
Jigar Shah
Luckily we've had very few people leave LPO since I've left. So that's good so far. And, but you know, I think the Doge stuff and the, you know, like, you know, we're going to buy out your contract stuff and all that stuff is just so much noise that I'm sure that there's a lot of people working there going maybe I should start looking for a job. Like this place doesn't really appreciate me. Right. And that would be sad if they left. But, but I understand where that is coming from because I think they are sending signals to federal employees that they're not valued.
- [40:26]
Stephen Lacy
So speaking of Doge, let's turn to everyone's favorite billionaire, Elon Musk. Musk has a bed in the Eisenhower Office building. Now he's deploying a cadre of 20 year olds to get access to the technology systems inside agencies, including the treasury payment system. He's got extraordinary conflicts of interest. He's bringing this playbook for dismantling organizations and he has a penchant for fabrication. What's his disruption potential? Should we consider this crusade, this Doge crusade? Signal or noise? Catherine?
- [40:58]
Kathryn Hamilton
I want to know if that adorable little son of his has all of our Social Security numbers too. It's. I mean, I don't know what they're going to do. They have a lot of access to a lot of information. I'm hopeful that the courts will stop that from happening because it's really dangerous from just a personal information standpoint for everybody. I don't know what it means to programs. I'm hopeful that the folks at doe. I feel like the secretaries of DOE and Interior are strong enough business people that they can be able to do what they need to do within their agencies. There are a lot of other smaller agencies that don't that I don't have the same feeling about.
- [41:45]
Stephen Lacy
Jigger.
- [41:45]
Jigar Shah
Yeah, I think to Catherine's earlier point, I mean, there's the personal and then the professional and the personal side. I mean, I know people at usaid, like, I know families that are overseas who got like one week's notice to try to move their family back to the United States and they've got kids in school. And I mean, I just think treating people with this level of cruelty, like, just doesn't sit right with me at all, particularly when they've given their lives to figuring out how to make other people's lives better. But on the other side, on the professional side, I'd say, I think to Catherine's point, I think DOE and Interior will be a lot more thoughtful. But the other thing for me is that even if you were to take the most charitable view of doge, which is that we had balanced budgets during the Clinton years, and that both Republicans and Democrats have decided to spend like drunken sailors since the 2000s and you just can't figure out how to get it under control, and so this is the only way to bring focus to cost cutting, the only places that matter if you're going to get to 2 trillion is defense, Social Security and Medicaid and Medicare. That's the only places that matter. Like the discretionary part of the Budget is so small that it just doesn't matter. You could zero it out and it wouldn't save you, like, much money at all. And so part of me is like, do they not know this? Is this just all performative? Like, what is it exactly that they're trying to do? Because, like, yeah, I just so. And then again, it's Congress's job to actually, you know, control the power of the purse.
- [43:15]
Unnamed Participant
Right.
- [43:15]
Jigar Shah
So ultimately, we'll see what they do with the continuing resolution and whether they pass a budget, and then we'll see, you know, what they're going to do on the reconciliation bills.
- [43:25]
Unnamed Participant
Right.
- [43:25]
Jigar Shah
Because that is actually how you're supposed to govern.
- [43:28]
Stephen Lacy
Let's go to Russell Vogt. He leads the Office of Management and Budget. He's now acting director of the Consumer Financial Protection Bureau, which he just closed down. Vote was an author of Project 2025. And he says that his mission.
- [43:42]
Jigar Shah
Be the author.
- [43:43]
Stephen Lacy
Be the author. Yeah. He has said his mission in life is to make the federal workforce traumatically affected. So he's a central figure in the spending freeze and the efforts to dramatically slash the federal workforce. And I think a lot of people see him as the person to watch in this administration. How would you rate his potential impact on the people who touch key energy programs, running labs, executing programs and the like? Jigger.
- [44:13]
Jigar Shah
I think this is bad. Like, I think that every decision that Chris Wright and Doug Burgum make might have another hearing at omb. And that is bad. Right. Like, after you've gone through the entire process of figuring out how to, like, actually, you know, win some sort of RFP or whatever it is within the Department of Energy or Interior, you then go to the Office of Management and Budget where there's supposed to just be a formality of, like, a sign off, and then that formality doesn't come and then, you know, like, you can't get issued your final documents. I think this is really, really bad. And I feel like there's a lot of people out there hoping that it's not going to be when he has made it his mission in life to bring cruelty into the world.
- [44:59]
Unnamed Participant
Right.
- [45:00]
Jigar Shah
Like, it's like, I want cruelty. Like, I just, like, I don't understand why anyone just doesn't believe him.
- [45:07]
Stephen Lacy
Yeah, I totally agree. And this feels like a very clear signal to me. Catherine.
- [45:11]
Kathryn Hamilton
Yeah, OMB has so much power that nobody has known about. I just remember fighting with the OMB during the Clinton administration about solar funding and pulling my hair out then. And they were supposed to be on the on the Clinton pro clean energy side of things. So they've, they've always liked to be the devil's advocate it. But what you don't want to do is have them completely shut down programs that the secretaries, that the leads in those agencies and all of the experts within those agencies have developed.
- [45:42]
Stephen Lacy
Let's go to Chris right now, the new Energy Secretary. He's laying out his energy dominance agenda. He recently issued a secretarial order declaring that net zero policies raise energy costs for American families and businesses and threaten the reliability of our energy system. He's ordering a review of appliance efficiency standards and emphasizing LNG exports. He's also emphasizing nuclear, geothermal, hydro. It's causing a lot of mixed reactions in the industry. Jigar is Chris Wright's approach under this energy dominance agenda, is this a signal of a real policy shift?
- [46:18]
Jigar Shah
I thought his memo was great. I thought it was well balanced. I thought it was what you would have expected from a George W. Bush appointee. So I think Chris Wright's a fantastic pick as the Secretary of Energy. And so I'm glad to see him there. He is an avid investor in lots of clean energy companies and board member. And when I talk to the CEOs, they're telling me that he was the best mentor they've ever had. So I think he's a people person. So I think it's great. I think the bigger challenge I have with the current Department of Energy is trying to figure out how they do big things. How do they engage with the private sector? How do they really get folks to build new nuclear or enhanced geothermal? We're not on track, for instance, to building 5 gigawatts of new geothermal that we laid out in the liftoff report for geothermal for by 2030. We're sort of on track to 1 gigawatt by 2030. So how do you, like, increase that by 5x? So how do you get the ambition level up? Like, part of what I'm concerned about is he might just have to play defense the whole time against Russ Vogt and others, that he's not actually going to be able to chart a course for energy dominance or energy abundance at all.
- [47:33]
Kathryn Hamilton
Yeah, I mean, I'm hopeful between Chris Wright and Doug Burgum, who is kind of the energy czar for the nation, that they will be able to push back because they're both reasonable human beings and they both understand technology and investment and how to move forward. I mean, on geothermal, honestly, that program has been massively underfunded. And Jigger, the liftoff report said it needs the $5 billion in investment. Well, that's not like Doe gave much, so. So hopefully he'll push up the budget for geothermal and other programs that have been underfunded. Hydropower, too, has been underfunded, so maybe that will be helpful to some of these companies. And I think between the two of them, they're smart business people and they'll be able to get things done as long as they kind of join together to push back against any edicts from the omb.
- [48:24]
Stephen Lacy
Yeah, very much agree with that assessment. Be really interested to see how the priorities inside come up against the way this administration is executing policy. Do you guys want to make any predictions? Like, if we can come back in a year and revisit a prediction, do you feel comfortable making one?
- [48:44]
Jigar Shah
I got a couple.
- [48:45]
Stephen Lacy
Let it rip.
- [48:46]
Jigar Shah
I think that we'll have more EV sales in 2025 than we had in 2024. And then I think that battery storage will be heralded as the savior of the grid a year from now, and we will deploy 10 times as much battery storage as we deploy natural gas.
- [49:06]
Kathryn Hamilton
Ooh, I had one of those, too. The same. And my storage piece is that we're going to get a lot new battery chemistries, not just lithium ion. We'll have more thermal batteries that are going to be there to help industry. And as a result of that, critical materials in the US and because of BV sales, critical materials in the US Are going to grow. So I actually think those are positive pieces.
- [49:30]
Stephen Lacy
Well, if any of those things do or don't happen, you'll hear about it here on Open Circuit. And we've got transcripts now, guys.
- [49:36]
Kathryn Hamilton
So you're gonna hold us to it.
- [49:38]
Jigar Shah
Oh, gosh.
- [49:39]
Kathryn Hamilton
Jigger and I are clearly wrapped around the axle here with each other on this.
- [49:44]
Stephen Lacy
Any parting words for, like, what you want listeners to get out of this show?
- [49:48]
Jigar Shah
You know, I think the whole point of this show is to help people process all of the data points.
- [49:56]
Unnamed Participant
Right.
- [49:56]
Jigar Shah
I mean, I think a lot of what this industry does is just say, this person raised this much money, this person did this, like this happened, that happened. But that doesn't really provide context. And I think that the context matters.
- [50:09]
Unnamed Participant
Right.
- [50:09]
Jigar Shah
People are making really big decisions, not just with money, but with their lives and their time.
- [50:14]
Unnamed Participant
Right.
- [50:15]
Jigar Shah
And I just think providing that context is going to be super valuable.
- [50:18]
Kathryn Hamilton
Yeah, I agree. And I also think certainty, since uncertainty is kind of the flavor of the day and the vibe, I think the certainty of having the three of us every week in the room together is bringing people a lot of good vibes.
- [50:34]
Stephen Lacy
Indeed. Jigger Shaw and Kathryn Hamilton are my co hosts of Open Circuit. That's going to do it for our first episode. Open Circuit is produced by Latitude Media. The show is edited by me and Sean Marquand is our Technical director. Anne Bailey is our Senior Podcast Editor. For more in depth reporting on the topics that we cover on this show, go to latitudemedia.com you can sign up for our Daily Weekly or our AI Energy Nexus newsletter. Just hit the subscribe button there at the top of the page. You can of course, find this show anywhere you get your podcasts, so hit subscribe if you haven't already. Pass a link to your friends or colleagues or your valentine. You can also find transcripts at Latitude Media and send questions to editorsattitudemedia.com we'd love to hear from you, so send us in questions of things you want us to talk about, or send us a voice memo on your phone and we may include future questions from you integrated into the show. We'll see you next week.
- [51:38]
Kathryn Hamilton
Whew. That was really wide ranging.
- [51:41]
Jigar Shah
Yes, that was very wide ranging.