MAY 14, 2025

Hello!

In Cipher this week:

• Anca Gurzu shares how renewables are rebranding as an energy-security must-have.
• Cat Clifford interviews a former energy regulator from the first Trump administration on energy demand and political compromise.
• In our Lunchtime Reads, Amena Saiyid catches us up on the congressional action with the Inflation Reduction Act.
• And Anca has an update on Europe’s cleantech investments so far this year. 

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Send your energy photos, story tips and more to news@ciphernews.com.

Illustration by Nadya Nickels.

Renewables rebrand as an energy-security must-have

BY: ANCA GURZU

LONDON — Renewable energy has a new elevator pitch. 

At a time of waning climate action and volatile geopolitics, renewable power sources like wind and solar are rebranding from planet-saving, emissions-reducing clean technologies to must-haves for energy security and peace-of-mind.

The narrative is shifting around the world due to a confluence of factors, but it’s perhaps most visible across Europe.

An energy crisis spurred by Russia’s invasion of Ukraine in 2022 has boosted the desire for energy independence and stable homegrown power sources. Add to that industrial competitiveness challenges, the rise of climate-skeptic far-right parties and, more recently, concern around the policies of United States President Donald Trump, and it’s not surprising renewable industry leaders are seeking to keep their businesses relevant in turbulent times.

“It’s more politically resilient to talk about energy security, competition, innovation and the European industry than just ‘climate,’” said Linda Kalcher, executive director of Brussels-based think tank Strategic Perspectives.

These new dynamics were on display at the recent energy security conference organized by the International Energy Agency at the end of April in London, where both leaders and business executives touted the benefits of renewable energy in the current fraught international political order.

It’s a big shift from about five years ago when public opinion, the rise of Green parties and Greta Thunberg-inspired student climate protests helped put decarbonization at the top of the European Union’s agenda.

At that time, investing in renewables was a key pillar in the efforts to make the EU climate-neutral by 2050. Fast-forward to today and the “why” behind going green is changing with the times.

“It has become much more than decarbonization,” said Sonia Dunlop, CEO of the Global Solar Council, the organization representing the global photovoltaic industry. “I’ve become convinced over the last years that renewables … are absolutely crucial to the new energy security.”

At the London conference, European Commission President Ursula von der Leyen spoke about how the EU reduced its dependency on Russian fossil fuels by accelerating the roll-out of renewables. “In the medium term, this is the best means to ensure energy security,” she told participants.

Low-carbon power “presents a solution to the issue of energy security that simply wasn’t true in the same way as a decade and a half ago,” said Ed Miliband, the United Kingdom’s secretary of state for energy and climate change.

What changed? The math.

The cost of solar power globally has fallen 90% since 2010 and the cost of offshore wind more than 60%, Miliband said.

In the run-up to the IEA summit, the Global Renewables Alliance and other renewables organizations ran a half-page ad in the Financial Times with “Energy Security = Renewable Energy” featured in big, bold font. Almost 150 companies and associations also signed a statement backing the message and calling on governments to prioritize energy storage, efficiency and grid enhancements.

Despite momentum around the security theme, renewables do come with their own challenges as they take on a bigger share of the energy system.

The massive blackout in Spain and Portugal at the end of April, which paralyzed parts of both countries for hours — an unprecedented energy security incident — stands as a prime example. Investigations are ongoing as to the exact cause.

Renewables also face potential vulnerability with their manufacturing origins.

The supply chains for manufacturing renewable technologies like solar panels and wind turbines are overwhelmingly dependent on just one country — China.

Read this article and share it on Cipher’s website.

Lunchtime Reads and Hot Takes

Four Senate Republicans Vow To Defend Climate Law Tax Credits — Bloomberg
Amena’s take: If and when the reconciliation package makes it out of the House, it could run aground in the Senate if these Senators hold their ground because Republicans hold just a three-seat majority.

House GOP looks to gut Biden’s climate incentives in megabill proposal — POLITICO Pro (subscription)
Amena’s take: The measure retains tax credits for carbon capture and storage but would be a death knell for the nascent clean hydrogen and geothermal sectors as well as for the restart of the nuclear industry.

Republicans look to slash IRA programs, speed fossil fuel permitting in Energy and Commerce reconciliation bill — POLITICO Pro (subscription) 
Amena’s take: The moves to rescind $6.5 billion in unspent IRA funds, including loans for transmission and offshore wind, and axe fuel efficiency rules aren't surprising. This is what President Trump has sought from day one.

How Xi sparked China’s electricity revolution — Financial Times (subscription)
Bill’s take: Great graphics. A very useful step-back story for anyone looking to better understand the breadth and depth of China’s green economy.

World’s first commercial-scale e-methanol plant opens in Denmark — Reuters
Anca’s take: Significant because it's commercial scale. The CEO of the company, Denmark's European Energy, said he expects to have price parity with fossil methanol around 2035.

Equinor threatens to cancel NY offshore wind project — E&E News (subscription)
Cat’s take: The stop work order is costing Equinor $50 million a week and is a prime example of the Trump administration's hostility toward renewables, particularly wind.

LSE Group Study Finds $1 Trillion Industry in Climate Adaptation — Bloomberg
Bill’s take: As temperatures rise with emissions, the cost of adaptation is going up. The coming decades will be a balancing act between adapting to the problem while trying to solve it.

U.S. and China agree to slash tariffs for 90 days in major trade breakthrough — CNBC
Amena’s take: The deal represents a major breakthrough, although who knows what will happen after 90 days. The continuing uncertainty cannot be good for businesses lining up parts critical to cleantech.

China auto parts makers triple in Thailand on EV battery rush — Nikkei Asia
Bill’s take: BYD is moving fast in overseas markets while setting up production bases it can use to export into third markets, such as Europe.

More of what we're reading:

• Denmark is considering lifting 40-year-old nuclear power ban, minister says — Reuters

• Big tech warns electricity, NEPA bottlenecks threaten AI build-out — E&E News (subscription)
• Trump admin ends extreme weather database that has tracked cost of disasters since 1980 — CNN
• Exclusive: US, Russia explore ways to restore Russian gas flows to Europe, sources say — Reuters
• AI is draining water from areas that need it most — Bloomberg
  
  

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Trump’s former FERC chair: Compromise key to AI energy race

Illustration by Nadya Nickels.

BY: CAT CLIFFORD

NEW YORK — Using solar energy plus battery storage, with natural gas as backup, is the only “plausible path forward” to meet surging energy demand from artificial intelligence data centers in the near-term, said Neil Chatterjee, a former top energy regulator during the first Trump administration.

“If we're genuinely in an AI race — and we need to win the AI race against the Chinese Communist Party — we need the power right now. ASAP,” said Chatterjee, former chairman of the Federal Energy Regulatory Commission in President Donald Trump’s first term.

Cipher spoke with Chatterjee following his appearance at an energy conference organized by BloombergNEF in New York in late April.

Chatterjee, a longtime advisor to then-Senate Republican Leader Mitch McConnell of Kentucky, pushed some controversial measures while leading FERC, an independent federal agency that regulates the interstate transmission of electricity, natural gas and oil. Today, he is the chief government affairs officer at Palmetto, a clean energy provider.

The only solution to meet the near-term power demands of AI data centers, therefore, is combining solar energy plus battery storage with existing natural gas plants nicknamed “peakers” because they kick in during times of exceptionally high demand, said Chatterjee.

That view puts the former regulator in line with a rising chorus of data center developers and some fellow Republicans arguing that renewables will be required to meet enormous energy demands to win the AI race, despite the Trump administration’s embrace of fossil fuels and deprioritization of wind and solar technologies.

For the U.S. to succeed in the AI era, Chatterjee said three things must happen:

Politicians must compromise

In recent decades, Republicans and Democrats have moved into polarized viewpoints on energy. Republicans, by and large, have supported fossil fuel energy and Democrats, by and large, have advocated for low-emission power sources to mitigate the effects of climate change.

That needs to change, Chatterjee told Cipher.

Winning the AI race while keeping energy prices affordable is going to “upend our energy politics,” Chatterjee said.

Permitting must be reformed

Bringing more energy online is going to require more transmission lines and more pipelines to transport natural gas, and that means both Republicans and Democrats will have to work together to pass permitting reform legislation, which has stalled for years on Capitol Hill due to a variety of issues, including partisan divides.

People need to hear why AI matters

The messaging around artificial intelligence needs to be improved, Chatterjee argued, especially its role in protecting national security. Leaders from both parties need to emphasize that AI is an essential national security tool for use in the military and robotic warfare, he said.

That makes bringing new power online equally essential.

Read this article and share it on Cipher’s website.

AI boosts Europe’s cleantech, but investments still lag

Source: Cleantech for Europe: Q1 2025 Briefing • Cleantech investments cover venture and growth investments in the report and refer largely to the initial equity funding rounds a company goes through to grow and scale up.

BY: ANCA GURZU

Rising electricity demand from artificial intelligence data centers is boosting the share of European investments in early-stage clean technologies that focus on power and energy, according to a recent report from lobby group Cleantech for Europe.

More than half (53%) of the investments into early- and mid-stage EU cleantech companies in the first quarter of 2025 were in the energy and power sector, up from 34% in the last quarter of 2024. The report focuses specifically on venture and growth investments, referring largely to the initial equity funding rounds a company goes through to grow and scale up.

The big picture is not so bright, however: EU investments into early- and mid-stage cleantech companies dropped to $2 billion (€1.8 billion) in early 2025, down 18% from the last quarter of 2024.

The total number of investment deals also declined from 182 to 153 during the same period, “erasing late 2024’s short-lived recovery and reinforcing the fragility of investor confidence,” according to the report.

The results reflect the global uncertainty that has marked the beginning of 2025, with a trade war brewing between the United States and the rest of the world causing turmoil in global financial markets and upending corporate planning.

At the country level, Germany led the number of cleantech deals in the first quarter of this year, a continuation of last year’s trend. The Netherlands, France, Spain, Italy and Sweden also topped the list.

Overall, though, cleantech venture-capital deals took place in only 17 of the EU’s 27 member countries. “Broadening participation remains a key challenge for the EU’s industrial ambitions,” the report notes.

Developments for the rest of the year will depend on the success of the EU’s recently announced Clean Industrial Deal and whether investors will shift their attention to the EU as a more stable and predictable place for cleantech companies.

Editor’s note: Cleantech for Europe is supported by Breakthrough Energy, which also supports Cipher.

AND FINALLY...
Live painting

Anca Gurzu snapped this photo during a train ride back from London. The sun is setting behind wind turbines dotting the Belgian fields creating the impression of live painting, as Anca described it.

Each week, we feature a photo that is somehow related to energy, the thing we all need but don’t notice until it’s expensive or gone. Email your ideas and photos to news@ciphernews.com.

Editor’s note: In addition to supporting Cipher, Breakthrough Energy also supports and partners with a range of entities working to tackle climate change, including nonprofits, corporations, startups and research firms. For more information on Cipher’s editorial policy, click here.