Check out the excellent analysis here by my colleagues Jesse Cohen, Lauren Shwisberg, and @tyfi.bsky.social here: rmi.org/gas-turbine-...
24.06.2025 15:46
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Check out the excellent analysis here by my colleagues Jesse Cohen, Lauren Shwisberg, and @tyfi.bsky.social here: rmi.org/gas-turbine-...
Luckily, a combination of energy efficiency, demand side management, advanced transmission technologies, interconnection queue shortcuts, and co-location of clean energy and new large loads can meet 95% of new loads, even accounting for plant retirements:
Even if you are able to get a new gas plant, it's going to be costly. Actual costs for recent gas plants show that capital costs for new gas plants are actually 130–200% of industry benchmarks. And that's not taking into account higher fuel costs due to increased LNG exports.
@advaitarun.bsky.social called this out months ago here: heatmap.news/ideas/natura.... New gas plants that don't already have their turbine orders secured aren't going to be built any time soon, with a doubling of new gas plant constructed projected over the next 5 years.
🚨NEW from RMI🚨
Load growth is coming, and gas turbine constraints are pushing back any new unplanned gas plants until 2029/2030 at the earliest. Luckily, clean energy solutions can meet 95% of near-term load growth in a more affordable way: #energysky
Rising energy bills are increasingly on people's minds. Full-scale repeal of the IRA would be disastrous for energy affordability. LPO loans (and the ITC and PTC!) are critically important to reduce electric bills, from @charlesxhua.bsky.social and myself:
Even utilities that haven't received commitments for loans, like Southern Company, parent company of Georgia Power, recognize EIR loans as important for future investments, and may apply as long as Congress doesn't defund LPO:
bsky.app/profile/chri...
Utilities are going to bat for these loans, with PG&E stating that these loans can save ratepayers over $1 billion. But there are also costs if these loans are denied, with PG&E saying that uncertainty around these loans is raising their cost of capital.
$43 billion in low-cost loans to utilities that will lower electricity rates for tens of millions of Americans are at stake. These loans are important for affordability, especially in the wake of load growth that will require new capital investments
bsky.app/profile/chri...
NEW: Electric utilities and environmental/consumer advocates agree that LPO loans are critical for energy affordability, and Sec. Wright has called these loans a "key tool," with inputs from myself and @charlesxhua.bsky.social and reporting from @jasonplautz.bsky.social and @briandabbs
I hope hearing that Southern Company, which owns some of the most fossil-heavy utilities in the country, strongly supports LPO and its cost-reducing financing can persuade more reasonable minds to keep LPO as an important tool for the electric grid. (2/2)
My overall takeaway from this is that there seems to be some daylight between the Trump admin that seems to be trying to dismantle LPO, and Republican representatives who can perhaps see a limited role for LPO with proper oversight. (1/2)
The AIER researcher does bring up a good point in that regulatory uncertainty can also cause the market failures that LPO seeks to fix, and that we should solve these. What he fails to mention is that trying to dismantle the government has created lots of regulatory uncertainty.
Congressman Riley (D-NY) questions the researcher from the American Institute for Economic Research on his testimony, which says that most LPO guaranteed loans are not additional. Congressman Riley counters that the study he cites was for federal loans in general, not 1703, lol.
Congresswoman Salinas (D-OR) asks SoCo what would happen if LPO loans were canceled. SoCo responds by saying that utilities everywhere are facing growing capital needs, and this high demand is putting upward pressure on rates. Projects would be delayed and/or more expensive.
On a question for how LPO can avoid picking winners and losers, former General Counsel Walsh talks about how LPO financing doesn't just benefit the company that gets the loan, but the entire sector by derisking commercial lending and opening up supply chains
Congresswoman Biggs (R-SC) talks about how LPO-financed projects have failed, and asks how Vogtle was made a success in comparison.
While Vogtle is the first new nuclear plant the US has built in nearly a decade, it was also $17 billion over budget (on a $14 billion estimate)
Former General Counsel Walsh talks about how LPO losing 150/250 of its staff would save taxpayers <$30 ~million~ each year, but would severely degrade the ability to manage its existing portfolio of $25 ~billion~ in principal and issue new loans.
Former General Counsel Walsh talks about how LPO losing 150/250 of its staff would save taxpayers <$30 ~million~ each year, but would severely degrade the ability to manage its existing portfolio of $25 ~billion~ in principal and issue new loans.
Congresswoman Ross asks if LPO financing can help mitigate some of the CWIP costs and risks to ratepayers, to which the SoCo representative confirms it can
Congresswoman Ross is from North Carolina, where SB 261 is currently making its way through the legislature. This bill would 1) remove NC's interim carbon reduction target and 2) widely expand the use of CWIP for "baseload facilities"
ncleg.gov/BillLookup/2...
Interesting turn here: Ranking Member Ross asks about construction work in progress (CWIP), and how it shifts risks from utilities onto ratepayers, listing Santee Cooper as an example:
bsky.app/profile/chri...
and that the entire market benefits after FOAK projects are built, with LPO financing providing that inducement for companies that want to take a leadership role.
Chairman Weber asks the former General Counsel Sam Walsh to LPO about why billion-dollar companies are unable to finance first of a kind (FOAK) projects. Mr. Walsh responds that there is significantly less risk to not be first...
On NEPA, the Biden admin introduced categorical exclusions that accelerated NEPA review for things like solar/storage on disturbed lands to ~6 months. The current admin has attempted to throw out NEPA altogether, creating uncertainty and halting projects while litigation proceeds
SoCo talks about how Davis Bacon has been a challenge to follow because of weekly wage reporting requirements, rather than biweekly like most companies. Other issues I've heard from utilities are around the Cargo Preference Act and NEPA compliance.
Southern Company, which provides electricity to a large portion of the Southeast, is vigorously defending LPO right now, saying the financing is critical in achieving energy dominance and lowering energy bills. I'll be providing updates in this thread:
science.house.gov/2025/4/energ...
The plan: push the US so far into a recession that we reenter a zero interest rate environment, making it increasingly economic to finance clean energy portfolios over gas plants
