U.S. Reverses Climate Bill, China’s Solar Surge & 7-Year Turbine Backlog

The energy landscape is experiencing a seismic shift with the passage of the "One Big, Beautiful Bill" into law. This dramatic policy reversal dismantles much of the Biden-era renewable energy initiatives, triggering the cancellation of tens of gigawatts of renewable projects and creating what promises to be persistently tight power markets for years to come.

The ripple effects are already visible throughout the energy sector. Major turbine manufacturers like GE Vernova, Mitsubishi, and Siemens face overwhelming demand with wait times stretching up to seven years and prices jumping by 50% in less than a year. With natural gas rig counts dropping and the EIA forecasting higher gas prices, we're witnessing the perfect storm for power sector inflation. Energy buyers are anxiously awaiting PJM's capacity auction results, which will provide our first glimpse into the new market reality.

Despite these headwinds, innovation continues. Texas's Guadalupe Valley Electric Cooperative is pioneering a virtual power plant with distributed residential batteries, while California's Turtelock School District is charging new electric buses with solar canopies. New Jersey has unanimously passed smart solar permitting legislation that follows Germany's successful model of streamlining residential installations. Meanwhile, China's renewable deployment continues at a staggering pace – installing 93,000 megawatts of solar in May alone (that's 100 panels every second), dwarfing America's quarterly installations. These contrasting stories highlight the complex, rapidly evolving energy transition playing out across markets, technologies, and geopolitics.

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Episode Transcript

Speaker 1 (00:00):
I've got your energy stories for this, the second
week of July 2025, and, ofcourse, the biggest energy story
of the week and the year forthat matter is the passage into
law of the so-called One Big,beautiful Bill, a name that
perhaps author Kurt Vonnegutwould have come up with on one
of his finer days, or maybeJoseph Heller.
The O-triple-B essentiallyreverses much of the renewable

(00:22):
energy and industrial policy putin place with the passage of
the Biden-era IRA and willresult in the cancellation of
tens of gigawatts of renewablegeneration projects in the very
near future.
It's already started.
There's a lot more detail herethan I'll get into, but big
picture is this sets the stagefor tight power markets for some
time to come.
It's not like this capacitywill or can immediately be

(00:45):
replaced with gas turbines.
The turbine majors GE, vernova,mitsubishi and Siemens are sold
out, with wait times in somecases up to seven years.
Costs of those turbines arereported to have jumped as much
as 50% over the past 10 monthsand while gas prices are
relatively muted at present, rigcounts are down.
You can blame the low cost ofoil for some of that.

(01:07):
Saudi Arabia is pushing out alot right now, as is OPEC and
expected prices for the nextyear, though, will become
significantly higher for gas.
At least that's what the EIA isforecasting.
So we're probably moving intoan inflationary period in the
power sector.
One indicator to watch forPGM's base residual capacity
auction, which opens tomorrowand runs through the 15th, with

(01:29):
results expected to be posted onthe 22nd.
Energy buyers will be watchingand wincing, awaiting that
outcome.
South Central Texas CooperativeGuadalupe Valley Electric
Cooperative will work withdistributed battery storage
developer BasePower to create atwo megawatt virtual power plant
.
Residential customers will haveaccess to backup power in case

(01:51):
of blackouts, while the co-opwill operate the batteries
remotely through BasePowersoftware to manage exposure to
wholesale power markets andtransmission costs.
The battery systems will bedeployed in new houses built by
national homebuilder Lennar andowned by Base Power.
In California, turtelockUnified School District received

(02:11):
nine electric Bluebird busesrecently and charging
infrastructure as well.
They will be charged through amixture of AC and DC chargers
that take electricity from solarcanopies over the school
parking lot, as well as someutility power from solar
canopies over the school parkinglot as well as some utility
power.
The project is being run bypartners Schneider Electric and
the Mobility House, withMobility House software
optimizing the use of theon-site solar and reducing

(02:34):
utility energy costs.
In New Jersey, the State Senateunanimously passed smart solar
permitting legislation that willexpedite the permitting process
for residential solar andbattery storage systems.
This law calls for theDepartment of Community Affairs
to develop and offer an onlineautomated permitting platform
for rooftop solar and batteryinstallations within a year.

(02:57):
Consequently, code-compliantapplicants should be able to
obtain permits without delay.
Yeah, that's a big deal here inthe United States, but not in
places like Germany, whereuser-friendly approaches have
been the norm for well over adecade and there have
dramatically cut soft costs ofrooftop solar.
And finally, in this shortenedweek, it was the 4th of July

(03:18):
week.
After all.
In May, china reportedlyinstalled a record 93,000
megawatts of solar capacity.
That equates to adding about100 solar panels every second.
The first five months saw atotal of 198,000 megawatts of
solar installed.
Putting that figure inperspective, here in the United
States, the first three monthsof this year saw 10,100

(03:41):
megawatts.
Well, that's all for this week.
Thanks for watching and we'llhope to see you soon.