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Rob and Jesse talk all things solar, steel, and cement with CREA’s Lauri Myllyvirta.
China’s greenhouse gas emissions were essentially flat this year — or they recorded a tiny increase, according to a recent report from the Centre for Research on Energy and Clean Air, or CREA. A third of experts surveyed by the report believe that its coal emissions have peaked. Has the world’s No. 1 emitter of carbon pollution now turned a corner on climate change?
Lauri Myllyvirta is the co-founder and lead analyst at CREA, an independent research organization focused on air pollution and headquartered in Finland. Myllyvirta has worked on climate policy, pollution, and energy issues in Asia for the past decade, and he lived in Beijing from 2015 to 2019.
On this week’s episode of Shift Key, Rob and Jesse talk with Lauri about whether China’s emissions have peaked, why the country is still building so much coal power (along with gobs of solar and wind), and the energy-intensive shift that its economy has taken in the past five years. Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap, and Jesse Jenkins, a professor of energy systems engineering at Princeton University.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, or wherever you get your podcasts.
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Here is an excerpt from our conversation:
Jesse Jenkins: So there’s sort of two key variables here. And we hit both those: the growth rate in new clean energy supplies, particularly in the electricity sector, and then the pace of demand growth. And this has been the story globally, the argument that we actually haven’t really seen any energy transition, only energy addition, right? We’re adding enough new clean energy, maybe, to meet growth, but not actually to drive down emissions, which would require us to exceed the growth rate and demand, right? So we can eat into the market share of existing fossil generation.
And that’s sort of the fundamental equation in China as well, right? Is if demand is growing rapidly, more rapidly than, clean electricity additions, emissions go up. And if the opposite is true, emissions go down. There’s also, it seems like, some evidence that the economy itself is slowing, or at least going through a bit of a structural change, right? So still growing, but not growing, perhaps, at the target rates that government has set. I think the expectations for this year, if I’m not mistaken, are under 5% growth, maybe 4.5% to 4.7% — so, you know, in U.S. terms, that’s still quite rapid, but in Chinese terms, a bit slower than the goal. And part of that is a slowdown in the construction industry — is that right? — which is another major driver of emissions due to cement consumption and steel consumption.
Lauri Myllyvirta: Yeah, so I’m a bit allergic to talking about the economy as a whole — you know, “the economy” is slowing down, or “the economy” is speeding up. Because the economy is, of course, made up of a lot of different sectors, and in order to understand energy demand, those sectors are not created equal. So if you have a 5% GDP growth that comes from service industries, from consumer-facing industries, that can mean much less than 5% growth in energy demand. And that’s what China was seeing until the Covid period.
China was actually making a pretty big deal out of improving the energy, or reducing the energy-intensity of the economy. And that’s what stopped in 2020. So since 2020, there has been essentially no reduction in the energy intensity, energy consumption, and GDP has grown at the same rate. And when you consider the fact that there is a lot of technical improvement still going on, different processes are getting more energy efficient, then that means that the structure of the economy has, in fact, gotten more energy-intensive. And that’s the key concern. The less than 5% growth now is driving faster growth in total energy demand than the 6%, even 7% growth was during the previous decade.
This episode of Shift Key is sponsored by …
Intersolar & Energy Storage North America is the premier U.S.-based conference and trade show focused on solar, energy storage, and EV charging infrastructure. To learn more, visit intersolar.us.
Music for Shift Key is by Adam Kromelow.
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And more of the week’s top news about renewable energy fights.
1. Jefferson County, New York – Two solar projects have been stymied by a new moratorium in the small rural town of Lyme in upstate New York.
2. Sussex County, Delaware – The Delaware legislature is intervening after Sussex County rejected the substation for the offshore MarWin wind project.
3. Clark County, Indiana – A BrightNight solar farm is struggling to get buy-in within the southern region of Indiana despite large 650-foot buffer zones.
4. Tuscola County, Michigan – We’re about to see an interesting test of Michigan’s new permitting primacy law.
5. Marion County, Illinois – It might not work every time, but if you pay a county enough money, it might let you get a wind farm built.
6. Renville County Minnesota – An administrative law judge has cleared the way for Ranger Power’s Gopher State solar project in southwest Minnesota.
7. Knox County, Nebraska – I have learned this county is now completely banning new wind and solar projects from getting permits.
8. Fresno County, California – The Golden State has approved its first large-scale solar facility using the permitting overhaul it passed in 2022, bypassing local opposition to the project. But it’s also prompting a new BESS backlash.
A conversation with Robb Jetty, CEO of REC Solar, about how the developer is navigating an uncertain environment.
This week I chatted with REC Solar CEO Robb Jetty, who reached out to me through his team after I asked for public thoughts from renewables developers about their uncertain futures given all the action in Congress around the Inflation Reduction Act. Jetty had a more optimistic tone than I’ve heard from other folks, partially because of the structure of his business – which is actually why I wanted to include his feelings in this week’s otherwise quite gloomy newsletter.
The following conversation has been lightly edited for clarity. Shall we?
To start, how does it feel to be developing solar in this uncertain environment around the IRA?
There’s a lot of media out there that’s oftentimes trying to interpret something that’s incredibly complex and legalese to begin with, so it’s difficult to really know what the exact impacts are in the first place or what the macroeconomic impacts would be from the policy shifts that would happen from the legislation being discussed right now.
But I’ll be honest, the thing I reinforce the most right now with our team is that you cannot argue with solar being the lowest cost form of electrical generation in the United States and it’s the fastest source of power generation to be brought online. So there’s a reason why, regardless of what happens, our industry isn’t going to go away. We’ve dealt with all kinds of policy changes and I’ve been doing this since 2002. We’ve had lots of changes that have been disruptive to the industry.
You can argue some of the things that are being discussed are more disruptive. But there’s lots of things we’ve faced. Even the pandemic and the fallout on inflation and labor. We’ve navigated through hard times before.
What’s been the tangible impact to your business from this uncertainty?
I would say it has shifted our focus. We sell electricity to our customers that are both commercial customers, using that power behind the meter and on site for their own facilities, or we’re selling electricity to utilities, or virtually through the grid. Right now we’ve shifted some of our strategy toward the acquisition of operating assets instead of buying projects from other developers that could be more impacted by the uncertainty or have economics that are more sensitive to the timing and uncertainty that could come out of the policy. It’s had an impact on our business but, back to my earlier comment, the industry is so big at this point that we’re seeing lots of opportunity for us to provide value to an investor.
As a company that works in different forms of solar development – from small-scale utility to commercial to community solar – do you see any changes in terms of what projects are developed if what’s in the House bill becomes law?
I’m not seeing anything at the moment.
I think most of the activity I’ve been involved in is waiting for this to settle. The disruption is the volatile nature, the uncertainty. We need certainty. Any business needs certainty to plan and operate effectively. But I’m honestly not seeing anything that’s having that impact right now in terms of where investment is flowing, whether its utility scale to the smaller behind-the-meter commercial scale we support in certain markets.
We are seeing it in the residential side of the solar industry. Those are more concerning, because you only have a short amount of time to claim the [investment tax credit] ITC for a residential system.
The company is well-positioned to take advantage of Trump’s nuclear policies, include his goal of installing a microreactor on a military base within the next few years.
At one point during his 12-year stint at SpaceX, Doug Bernauer turned his attention to powering a Martian colony with nuclear microreactors. Naturally, these would also fuel the rocket ships that could shuttle Mars-dwellers to and from Earth as needed. Then he had an epiphany.“I quickly realized that yes, nuclear power could help humanity become multiplanetary in the long term, but it could also transform life on Earth right now,” Bernauer wrote in 2023.
As nuclear power reemerges as a prominent player in the U.S. energy conversation, its potential to help drive a decarbonized future has crystallized into a rare bipartisan point of consensus. Radiant Nuclear, the Earth-based microreactor company that Bernauer founded after leaving SpaceX in 2019, is well positioned to take advantage of that, as its value proposition might as well be tailor-made for the Trump administration’s priorities
The startup’s aim is to make highly portable 1-megawatt reactors that can replace off-grid power sources such as diesel generators, which are ubiquitous in remote areas such as military bases. It’s fresh off a $165 million Series C funding round, with plans to begin commercial deployment in 2028. That aligns neatly with Trump’s recently announced goal of deploying a reactor on a military base by the same year. It’s an opportunity that Radiant Chief Operating Officer Tori Shivanandan told me the company is uniquely well-suited to take advantage of.
“A diesel generator that operates at 1 megawatt you have to refill with diesel about every three to five days,” Shivanandan explained. That means having regular access to both fuel and the generator itself, “and that’s just not reliable in many locations.” The company says its reactors only need refueling only every five years.
Radiant’s goal is to be cost competitive with generators in far flung locales — not just military bases, but also distant mines, rural towns, oil and gas drilling operations, and smaller, more dispersed data centers. “A customer who’s on the North Slope of Alaska, they might pay $11 or $12 a gallon for diesel,” Shivanandan told me. That’s a price she said Radiant could definitely compete with.
“The military’s interest in microreactors has been coming for quite a long time,” Rachel Slaybaugh, a climate tech investor at the venture firm DCVC told me. The firm led Radiant’s Series C round. Some of Radiant’s appeal is “right place, right time,” she said. “Some of it is putting in a lot of work over a long time to make it the right place, right time.”
Trump’s recent nuclear-related executive orders also have Shivanandan and her team over the moon. As the administration looks to streamline nuclear licensing and buildouts, one order explicitly calls for establishing a process for the “high-volume licensing of microreactors and modular reactors,” which includes “standardized applications and approvals.” These orders, Shivanandan told me, will keep Radiant on track to start selling by 2028, and set the stage for the company’s rapid scale up.
Alongside DCVC, the company's latest round included funding from Andreessen Horowitz’s “American Dynamism” team, Union Square Ventures, and Founders Fund. This raise, Shivanandan told me, will cover Radiant’s expenses as it builds out its prototype reactor, which it plans to test at Idaho National Lab next year. It will be the first fueled operation of a brand new reactor design in 50 years, she said.
“My perspective is the bigger reactors are important and interesting, and there are a lot of great companies, but they’re not a very good fit for venture investing, Slaybaugh told me. “We like microreactors, because they just need so much less capital and so much less time.”
That potential buildout speed also means that even as the Inflation Reduction Act’s clean energy tax credits look poised for a major haircut, Radiant may still be able to benefit from them. In the latest version of the budget bill, nuclear projects are only eligible for credits if they begin construction by 2029 — a tall order for the many startups that likely won’t start building in earnest until the 2030s. But if all goes according to plan, that’s a timeline Radiant could work with — at least for its initial reactors, which would be the most expensive and thus most in need of credits anyway.
The company aims to reach economies of scale relatively quickly, with a goal of building 50 reactors per year at a yet-to-be-constructed factory by the mid 2030s. The modular design means Radiant can deploy multiple 1-megawatt reactors to facilities with greater power needs. But if a customer wants more than 10 or so megawatts, Radiant recommends they look to microreactors’ larger cousins, the so-called small modular reactors. Companies developing these include Last Energy, which makes 20-megawatt reactors, as well as NuScale, Kairos, and X-energy, which aim to build plants ranging from 150 megawatts to 960 megawatts in size.
While it could take one of these SMR companies years to fully install its reactors, Radiant’s shipping container-sized products are not designed to be permanent pieces of infrastructure. After being trucked onsite, the company says its reactors can be switched on the following day. Then, after about 20 years of continuous operation, they’ll be carried away and the site easily returned to greenfield, since there was no foundation dug or concrete poured to begin with.
This April, the Department of Defense selected Radiant as one of eight eligible companies for the Advanced Nuclear Power for Installations Program. The winner(s) will design and build microreactors on select military installations to “provide mission readiness through energy resilience” and produce “enough electrical power to meet 100 percent of all critical loads,” according to the Defense Innovation Unit’s website.
Also on this list was the nuclear company Oklo, which counts OpenAI CEO Sam Altman among its primary backers and went public last year. This Wednesday, the Air Force announced its intent to enter into a power purchase agreement with the company to build a pilot reactor on a base in Alaska. The reactor will reportedly produce up to 5 megawatts of power, though Oklo’s full-scale reactors are set to be 75 megawatts. Whether the military will opt to contract with other nuclear companies is still an open question.
Perhaps more meaningful, though, is the show of support Radiant recently gained from the Department of Energy, which selected it as one of five companies to receive a conditional commitment for a type of highly enriched uranium known as HALEU that’s critical for small, next-generation reactors. Much of this fuel came from Russia before Biden banned Russian uranium imports last year, in a belated response to the country’s invasion of Ukraine and an attempt to shore up the domestic nuclear supply chain.
America’s supply of HALEU is still scarce, though, and as such, Shivanandan considers the DOE’s fuel commitment to be the biggest vote of confidence Radiant has received from the government so far. The other companies selected to receive fuel are TRISO-X (a subsidiary of X-energy), Kairos Power, TerraPower, and Westinghouse, all of which have been around longer — the majority a decade or more longer — than Radiant.
Though the company is currently focused on Earth, Radiant hasn’t completely abandoned its interplanetary dreams. “We do believe that, should you want to colonize Mars and also create the environment in which you could refuel your rocket and send it back, then you would need 1-megawatt nuclear reactors,” Shivanandan told me. Anything larger might be too heavy to put in a rocket.
Good to know.