Can Wall Street rescue clean energy?

Presented by Williams: Your guide to the political forces shaping the energy transformation

Feb 13, 2024 View in browser   By Christian Robles Presented by Williams Carbfix domes are seen at the Hellisheidi plant near Reykjavik, Iceland. The facility sucks carbon dioxide from the air and turns it into rock. | Halldor Kolbeins/AFP via Getty Images Big Wall Street investors are betting that a surprisingly strong economy and improving interest rates will usher in a clean energy technology renaissance — at a moment when climate tech companies could really use the boost. Large firms have committed to pouring billions into capital-intensive projects such as offshore wind installations, battery storage plants and hydrogen production facilities. That is raising hopes for the climate technology sector, which has seen investments drop by 58 percent since 2021 because of high interest rates, writes Corbin Hiar. "They've woken up to something we've been talking about for 10 years, and they've woken up because we proved it makes money," said Scott Jacobs, CEO of the private equity firm Generate Capital. "We need more money flooding this market. There's no shortage of opportunity." Last week, private equity firm Brookfield Asset Management announced it had raised $10 billion to invest in projects that could accelerate the transition to net-zero emissions. The same week, startup Graphyte began operating what it says will soon be the largest carbon removal facility in the world thanks to funding from Bill Gates’ Breakthrough Energy Ventures. The influx of cash could help startups avoid the so-called valley of death — the point when companies need more money than what venture capitalists can offer to produce at a commercial scale. What these projects need now, Corbin writes, is “backers with large balance sheets and a willingness to take risks.” A systematic failure to help clean energy technology companies reach commercial viability led to an economic bubble in the 2010s, analysts say. The International Energy Agency estimated in 2021 that more than 80 percent of energy startups failed to meet investors' expectations. Investors hope that the Biden administration — flush with hundreds of billions of dollars in congressionally approved clean-energy subsidies — can help climate-tech projects survive the gantlet. The Energy Department’s Loan Program Office, for example, has lent over $6.1 billion to four companies since Jigar Shah became its head in March 2021. The office still has about $219 billion it can lend as of last month. Biden’s signature infrastructure and climate laws could further bolster clean energy technology through a series of other subsidies and tax incentives. With those laws in hand, DOE officials are meeting with Wall Street investors to sell them on the strong economic potential of clean energy technologies. There’s “a lot of dry powder and momentum now building up” for climate infrastructure projects, said Kim Zou of market research firm Sightline Climate.   It's Tuesday — thank you for tuning in to POLITICO's Power Switch. I'm your host, Christian Robles. Power Switch is brought to you by the journalists behind E&E News and POLITICO Energy. Send your tips, comments, questions to crobles@eenews.net.   YOUR GUIDE TO EMPIRE STATE POLITICS: From the newsroom that doesn’t sleep, POLITICO's New York Playbook is the ultimate guide for power players navigating the intricate landscape of Empire State politics. Stay ahead of the curve with the latest and most important stories from Albany, New York City and around the state, with in-depth, original reporting to stay ahead of policy trends and political developments. Subscribe now to keep up with the daily hustle and bustle of NY politics.      Listen to today’s POLITICO Energy podcast Today in POLITICO Energy’s podcast: Zack Colman breaks down details from new research that finds climate change could reverse decades' worth of progress in the U.S. on air quality.   A message from Williams: Williams has been powering America with clean natural gas for more than a century, so we know what it takes to fuel progress. We can move toward a clean energy future while meeting rising energy demands—which is why we continue to invest in innovations that will help lower emissions nationwide and globally. The path to sustainability will be powered by experience—and experience powers us.   Power Centers Federal Energy Regulatory Commission headquarters in Washington. | Francis Chung/E&E News LNG in court A pair of Biden-appointed judges signaled that the Federal Energy Regulatory Commission might need to examine more closely the climate impacts of the liquefied natural gas export terminals the agency approves, Niina H. Farah writes. The remarks by the appeals court judges came during oral arguments over FERC’s certification of a Louisiana LNG project. The hearing came two weeks after the Department of Energy announced it would pause new LNG export permits until it can better account for climate impacts when deciding whether the projects are in the public interest — setting off a political storm among Republicans and some Democrats. White House weighs in The White House said Tuesday that it “strongly opposes” a measure from House Republicans that would hand FERC the permitting role for liquefied natural gas exports. But it did not threaten a veto from President Joe Biden, Nico Portuondo reports. Carbon tax politics Republican Sen. Cynthia Lummis of Wyoming is getting an earful from right-wing conservatives back home for helping to advance legislation that could lead to a carbon tax. The criticism shows the political toxicity around any effort to tie climate action to trade policy and the challenges advocates face in building support around the idea, Emma Dumain writes. Lummis broke ranks with fellow Republican to help advance a bill out of committee that would require the Department of Energy to determine the emissions intensity of nearly two dozen products made in the United States as compared with foreign trade partners.   A message from Williams:   In Other News Pumped up: Heat pumps are outselling gas furnaces by the biggest margins in two decades of trade data. Regrets? He has a few: The 85-year-old founder of Endeavor Energy Resources, Autry Stephens, reflects on the company he is selling to Diamondback Energy.   A message from Williams: At Williams, our experience speaks for itself. From horseless carriages to EVs, telegrams to smartphones—we have a 116-year history of powering innovation in action, continually transforming ourselves to help America meet rising energy demand with clean natural gas. That know-how helps us deliver one third of the nation’s natural gas across 33,000 miles of energy infrastructure and drives our investments in emissions-reducing technologies. Together, we can reliably and affordably power the world while ushering in a clean energy future, because experience powers us.   Subscriber Zone A showcase of some of our best subscriber content. Emissions rise from smokestacks at the Jeffrey Energy Center coal power plant near Emmett, Kansas, on Sept. 18, 2021. | Charlie Riedel/AP Natural gas is set to overtake coal as the largest source of emissions from U.S. power plants, according to an analysis of data by E&E News. A geothermal energy project in Utah is taking cues from the oil and gas industry and exceeding expectations. Energy Secretary Jennifer Granholm went abroad to argue the Biden administration's climate agenda is creating jobs in economically struggling communities. That's it for today, folks! Thanks for reading.   DON’T MISS POLITICO’S GOVERNORS SUMMIT: Join POLITICO on Feb. 22 to dive into how Governors are wielding immense power. While Washington remains gridlocked, governors are at the center of landmark decisions in AI and tech, economic development, infrastructure, housing, reproductive health and energy. How are they setting the stage for the future of American politics, policies and priorities? How are they confronting major challenges? Explore these questions and more at the 2024 Governors Summit. REGISTER HERE.       Follow us on Twitter Arianna Skibell @ariannaskibell   Follow us

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