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Good morning and happy Friday,
The U.S. government shutdown is now in its second week, and could impact clean energy permitting as well as tax credit guidance, according to an analysis from Crux. “Conventional energy” projects will be spared, however, and indeed fossil fuel companies can expect ‘concierge’ service.
A new report from the International Energy Agency says that in the next five years, global renewable energy capacity is projected to more than double, “adding the capacity equivalent of all existing power generation sources in China, Japan and the European Union combined” – but the IEA also cut its estimate of U.S. renewable capacity growth by about 50% for that timeframe.
And, the latest analysis from Ember finds that in the first half of 2025, new solar and wind capacity exceeded the growth of global electricity demand, “vaulting renewables toward overtaking coal worldwide for the first time on record.”
Here in the U.S., however, the DOE has floated another set of cuts to clean energy grants, doubling down on the 300+ grants it announced it was terminating last week. In total, more than 600 grants and more than $20 billion in spending could be axed, including all seven hydrogen hubs, which received awards as part of the bipartisan Infrastructure Investment and Jobs Act.
Meanwhile, the U.S. EIA’s latest short-term energy outlook once again predicts domestic energy demand will hit record highs in 2025 and 2026. While many clean energy projects are facing uncertainty, at least one is moving forward: Dominion Energy says America’s largest offshore wind farm will be online in 6 months.
Read on for more.
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Power and Price in California
California recently passed a major energy policy package that seeks to balance its ambitious environmental goals with the rising cost of living. In late September, Governor Gavin Newsom signed six bills into law focused on reducing emissions while trying to limit the financial burden on residents and utilities – and the reviews are mixed. Here’s a closer look.
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Cap and trade is now “cap and invest.” The state’s signature climate program was extended through 2045 and rebranded; under the new reforms, more funds will go toward lowering electricity bills, especially during peak summer months, while subsidies for residential gas use will be phased out. Critics, however, warn that the program could still raise overall costs, especially as carbon prices increase.
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Western energy market. The legislation “clears a major hurdle” toward creating a unified electricity market across Western states by allowing CAISO to collaborate on a regionally governed market, which could lower costs and improve energy reliability. The move is expected to help California sell excess solar energy and access power more efficiently during demand spikes.
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VPPs vetoed: To the dismay of many, Governor Newsom vetoed three bills – AB 44, AB 740, and SB 541 – that aimed to boost the use of virtual power plants by expanding rooftop solar, backup batteries, EVs, and other customer-owned energy technologies, arguing that the legislation would complicate existing regulatory efforts to meet clean energy and grid reliability goals.
- Drill baby drill. The most controversial measure speeds up oil drilling approvals, aiming to avoid refinery closures and sharp gas price increases. While some argue this is essential to keep energy costs affordable, experts say it only provides short-term relief and won’t address deeper issues driving fuel costs.
⚡️ The Takeaway
Aspirations vs. affordability. Overall, the package represents a delicate balancing act as Governor Newsom tries to continue pursuing climate progress while responding to economic and political pressures. In related news from the Golden State, the geothermal industry scored a victory with the passage of AB 531, which will make it possible for geothermal projects to get certified through a streamlined process, although a companion bill was rejected. Meanwhile, a CPUC judge has called for the state to issue a 6 GW order to “get ahead of expiring tax credits,” and a recent report from Ember finds that solar is crushing gas across California.
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BESS Hardware Causing Headaches
Battery energy storage systems (BESS) are increasingly essential to resiliency and reliability, but a new report from battery intelligence firm Accure reveals persistent reliability and performance issues. Nearly 19% of BESS projects globally face reduced returns due to technical problems, unplanned downtime, and efficiency losses. Here are some key points:
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The report analyzed more than 100 large-scale systems totaling 18 GWh of capacity and found that hardware-related failures – i.e., automatic shutdowns, safety alerts, and module-level imbalances – directly impacted revenue in nearly one in five projects.
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The most common strategy to maintain performance and buffer against degradation is system oversizing, with many projects adding 15–25% extra capacity, and smaller systems oversizing up to 35%. However, excessive oversizing can lead to underused assets and stranded capital, while insufficient margins risk early performance drops.
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Another issue the report flags is commissioning delays, which commonly push project timelines back by months, increasing costs and straining stakeholder relationships. While widespread, these delays are often unrelated to technical faults, caused instead by factors like permitting delays, supply chain issues, workforce shortages, and complex contract negotiations.
⚡️ The Takeaway
BESS are becoming a backbone. Overall, Accure’s findings underscore the need for better analytics, data quality, and project management practices. As the energy storage sector scales rapidly, operational setbacks carry significant financial and strategic consequences for developers, investors, and owners. BESS are becoming a backbone of the modern grid, so improving reliability is essential to protecting returns and building investor confidence.
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Ice, Ice Baby
As fall weather brings cooler temperatures to much of the country, air conditioning may not be front of mind, but many organizations are already making use of a more sustainable cooling technology: ice thermal energy storage, or “ice batteries.”
The technology works by freezing water at night, when electricity is cheaper and cleaner, and using the stored ice to cool buildings during hot daytime hours. It requires little energy to thaw, making it more efficient than traditional air conditioning alone. And, it’s considered a particularly low-risk method of energy storage.
As an example, consider Norton Audubon Hospital in Louisville, Kentucky, where 27 tanks freeze 74,000 gallons of water overnight. During the day, the ice chills water circulating through pipes, creating cool air without overloading the power grid. This approach cuts peak electricity demand and lowers utility costs – saving the hospital $278,000 in the first year the system was in operation.
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Companies like Trane Technologies, Nostromo Energy, and Ice Energy are manufacturing and installing these systems. Trane’s systems are found in hospitals, schools, and government buildings, while Nostromo targets luxury hotels and energy-intensive data centers – an application that seems particularly relevant today, as 30-40% of their electricity needs stem from cooling.
Currently, the biggest market for the technology is California, which despite an abundance of solar, often draws on non-renewable power after the sun sets. Ice batteries can be used to power air conditioning in the late afternoon and evening, instead of drawing from the grid. Too cold!
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Thanks for diving into the Developer Dispatch with us.
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Building American power requires a powerful team. |
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