Throughout my 35 years in climate and energy, I’ve seen huge advancements in support for clean energy and turbulent periods where it seemed that crucial technologies may not succeed. But I have never witnessed such a relentless, hostile, spiteful, and ultimately futile attack on common sense and affordable energy production like we see now.
The Trump Administration’s One Big Beautiful Bill Act, or OBBBA, coupled with a “whole of government” approach – one that enlists all of the federal agencies under the executive branch to wage a needless war on clean energy, just when we need it most – is doomed to fail in time. It will slow the energy transition here in the US, but it won’t stop the global movement to low-emission, inexpensive energy. Still, their successful assault on US clean energy will likely damage the American economy for a generation.
Unforced errors
As an investor, I spend my days working with entrepreneurs trying to create an abundant future. As the demand for affordable, low-carbon products and electrons continues to grow, the prospects of building massive companies in the advanced energy economy have never been brighter – but the US keeps making unforced errors and stalling progress. We are, once again, ceding the field to our international competitors, and in 10 years, we will wonder why these markets, so necessary to our national economy and security, are dominated by China.
We’ve seen this play out before. The first viable solar power technologies were invented in the US by Bell Labs in 1954. Seventy years later, Chinese manufacturers dominate the market for the fastest-growing energy technology. John Goodenough, a professor at the University of Texas at Austin, developed the first truly useful lithium-ion battery in 1980. Japanese manufacturers perfected the technology, but now, that market too is dominated by Chinese corporations. As recently as 2020, GE Vernova was the largest wind turbine manufacturer in the world. Now, the top five positions are held by Chinese companies.
China currently owns 60% of the electrolyzed market, but we have superior technology, and until this year, had the policy to support it. Now we have decimated that support and are forcing our home-grown winners overseas. Germany gives Siemens better support for its electrolyzer products than we give to ours. So when China owns 90% of this booming market in 2030, and their equipment is being deployed all over the world, we will look to 2025 as the year we walked away.
It’s more important than ever to have access to clean, affordable energy in the US, and to sell the technologies enabling that energy abroad. The AI and data center boom, the push toward better, cheaper electric vehicles, and the onshoring of US manufacturing have skyrocketed energy demand at home. The latest federal data finds that, on average, electricity costs are 5.5% higher than last year. Yet the OBBBA struck support for deployable technologies like solar, wind, and battery storage that could help make our energy bills cheaper.
Meanwhile, a global energy transition continues. By the end of this decade, renewable energy will account for nearly half of Africa’s energy consumption, up from 27% in 2025. Globally, renewable energy will account for 20% of all energy consumed by 2030. Change happens slowly, then all at once. By building obstacles to the transition, the current administration is fossilizing the US economy, insisting on propping up fossil fuels at incredible costs to consumers and businesses.
These policies will hurt the US on the international stage and raise prices at home. More expensive energy means more expensive products, which are harder to sell in either domestic or global markets. And a refusal to support onshore industry that can compete in the high-growth energy markets of the future, consigns the U.S. to fighting for larger pieces of the shrinking oil and gas market it historically dominated, while ceding the future to global competitors that are bringing electricity and flexible power to robots, drones, cars, boats, and planes – in addition to the industrial factories making them.
Above all, this energy policy damages our competitiveness on the world stage in developing data centers and AI infrastructure. The limiting factor is power, not chips, and the fastest and cheapest source of power is solar and wind, plus batteries. Gas is sold out until 2030, and is more expensive than renewables plus batteries in any case. Geothermal and nuclear are great, but they are scaled solutions for 2035 and beyond. Fusion won’t have a meaningful impact on the grid until 2040 and beyond. Yet, the U.S. is waging its spiteful war on renewables.
Opportunity remains
Despite the headwinds, there remains an opportunity for American companies focused on making energy prices cheaper. During times of political uncertainty, we’ve seen the private sector innovate and prop itself up without the full support of the federal government.
Energy efficiency is a demand driver to watch, as both businesses and consumers look for ways to lower their historically high energy costs. Companies that provide innovative consumer-facing products that cut down on energy consumption while providing a better experience will thrive. My firm just invested in Copper, which makes battery-equipped home appliances. Here, near-term demand is driven not by a consumer desire to get off natural gas, but because the stoves are cheaper for developers and easier to install – especially in cities like New York, with large apartment buildings with constrained capabilities to either maintain their gas network or to upgrade their electrical one.
In industry, technologies such as thermal batteries, like the ones RedoxBlox makes, will help manufacturers cut energy costs. We use process heat everywhere in manufacturing, and wherever gas costs are high relative to electricity, RedoxBlox technology makes sense. Tech that uses AI in innovative ways, or offsets the energy burden of AI, will be crucial, like Branch Energy’s energy demand management software.
Government funding is still flowing to some low-emission energy technologies like the emerging geothermal and nuclear fission and fusion energy production, but the widespread commercial viability of these innovations is still 5-10 years away from making a real impact. While these future sources of power have both bipartisan support and a hold on the public imagination, their impact may not be felt for at least a decade.
While the boom-and-bust cycles regularly whipsaw markets, the retrenchment this time feels different. In previous eras, innovations in fossil fuel exploration and production could compete on cost. This time, fracking won’t save the oil and gas industry because the economics of solar and storage make more sense. Make no mistake, this is a really bad set of laws and policies for energy development in the US and the nation’s ability to harness the fastest-growing and lowest-cost energy resources on the planet. But markets can beat manipulation, and innovation can trump regulation. It’s the delays that will prove costly for American competitiveness on a global stage.
Gabriel Kra is managing director at Prelude Ventures.
Guest posts on ImpactAlpha represent the opinions of their authors and do not necessarily reflect the views of ImpactAlpha.
