WHAT’S HAPPENING TODAY: Good afternoon and happy Wednesday, Daily on Energy readers! Treasury Secretary Scott Bessent is making news today, announcing the United States plans to set price floors across a number of industries they consider strategic, such as rare earths production, to compete with China. The secretary also addressed rising electricity costs and how he believes it is restricting the nation’s ability to build out artificial intelligence.
Read on to find out more about the Interior Department’s new plans for Nevada’s largest solar project, the Esmeralda 7.
Welcome to Daily on Energy, written by Washington Examiner energy and environment writers Callie Patteson (@CalliePatteson) and Maydeen Merino (@MaydeenMerino). Email cpatteson@washingtonexaminer dot com or mmerino@washingtonexaminer dot com for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.
BESSENT PLANS PRICE FLOORS ACROSS INDUSTRIES: Treasury Secretary Scott Bessent said the United States will look to set price floors across sectors, such as rare earths production.
His statement is an indication that the Trump administration plans to go even further in securing the domestic supply chain for rare earth and critical minerals. It has already taken direct stakes in private companies and agreed to pay minimum prices for their products, both unusual measures by historical standards.
Bessent told CNBC in an interview today that China has manipulated markets for the past two decades by leveraging its dominance in sectors like rare earths and slashing prices to push out competitors.
“I wouldn’t be surprised,” if the U.S. takes a stake in additional companies, as it has in the rare earths sector, Bessent said.
The administration in July signed a deal with rare earths producer MP Materials. As part of the agreement, it would provide the federal government with a 15% stake in the company and establish a commitment to pay $110 per kilogram for neodymium-praseodymium metal and oxide, which are used to make permanent magnets.
Although the agreement has been deemed as an unusual approach by the federal government, Bessent said it is necessary to compete with China.
“When you are facing a non-market economy like China, then you have to exercise industrial policy,” Bessent said. “So we’re going to set price floors and the forward buying to make sure that this doesn’t happen again, and we’re going to do it across a range of industries.”
Read more by Maydeen here.
PLUS…BESSENT SAYS RISING ELECTRICITY COSTS ARE CONSTRAINING AI BOOM: During a roundtable with reporters at the Treasury Department this morning, Bessent told the Washington Examiner he believed skyrocketing electricity prices have become a “binding constraint” on the country’s ability to build out artificial intelligence.
“I think of it as a binding constraint. We’re going to have to build it for them to come,” Bessent said.
The Treasury Secretary offered three specific ways that federal and state governments can offset rising costs, including embracing the deployment of more fossil fuel infrastructure. Bessent said the administration is encouraging companies across the U.S. to build where there are ample energy supplies in order to secure their own power. He also said the administration is considering building nuclear power on federal land to quickly expand energy supply and help lower costs.
Read more from the Examiner’s Christian Datoc here.
HOMES HEATED WITH FOSSIL FUELS TO SEE LOWER BILLS THIS WINTER: With electricity prices on the rise, homeowners who have opted to reduce their reliance on fossil fuels to heat their homes are likely to see their energy bills rise this winter.
The details: Earlier today, the Energy Information Administration predicted in its winter fuels outlook that most of the U.S. will see similar, if not milder, winter temperatures and weather to last winter. This broadly means that residential energy consumption will be very similar to last year as well. But not all bills will be the same.
The EIA warned that, as residential sector retail prices for electricity are higher this year, households relying on electricity to heat their homes will spend more this winter. Specifically, the agency estimates that households primarily using electricity for heating will spend an average of 4% more on their electricity bills. The highest bills are expected to be seen in the Northeast region.
Those using natural gas are expected to spend about the same as last year, while homeowners relying on propane or heating oil are actually forecast to see lower energy bills this winter.
AGGIES GOING NUCLEAR: Texas A&M University is partnering with nuclear startup Last Energy to deploy a microreactor at one of the university’s applied research campuses in central Texas.
The details: Under the partnership, Last Energy will be building a 5 megawatt reactor to demonstrate safe, low-power criticality, as well as the ability to generate electricity for the grid. This reactor is a scaled-down version of its 20 megawatt small modular reactor. The reactor is expected to cost around $100 million to build, and will be fully financed with private capital.
One of the main goals for the program with the university is reportedly to start powering Texas A&M with nuclear energy as soon as mid next year, CEO Bret Kugelmass told Bloomberg. Last Energy also hopes to deploy a commercial unit of its reactor within the next two to three years.
In order to develop commercial reactors, Last Energy must receive federal approval from the Nuclear Regulatory Commission. As of this summer, the NRC has only approved designs for two SMRs – both of which are to be developed by NuScale. Last Energy is, however, able to develop its reactor for testing under its partnership with the federal government.
The project was selected by the Department of Energy to receive fast-tracked licensing through its new reactor pilot program, which is intended to have three small test reactors built and hit criticality status by next July.
“We’re partnering with Texas A&M to usher in the next Atomic Era,” Kugelmass said in a statement. “With fuel in hand, an optimal site at RELLIS, and DOE authorization underway, we have the ideal conditions to demonstrate a standardized, scalable microreactor product to the United States.”
EU LOOKS TO U.S. STATES TO ADVANCE CLEAN ENERGY AGENDA: As the Trump administration won’t be offering any support for global climate change-related mitigation efforts, the European Union is reportedly narrowing in on individual U.S. states for cooperation.
The details: A draft policy paper on climate change diplomacy efforts viewed by the Financial Times revealed the EU’s intention to focus on local governments, companies, and other authorities within the U.S. to support the “clean energy transition” and advance “clean technologies.”
The draft paper was expected to be published tomorrow, illustrating the EU’s broad goal for accelerating the transition to green energy solutions both within the bloc’s region and abroad. This reportedly includes helping developing countries to establish local carbon markets and increase investments in renewable energy plants in those nations.
According to the Financial Times, one of the main goals of the paper is to detail how the EU would reduce reliance on foreign nations like China while also helping other countries “with the clean transition.” In the U.S., the EU plans to focus on “subnational entities, business and think-tanks.”
Why it matters: The document is subject to change before it is released to the public. If it keeps the pledge to work with individual states in the U.S., the EU would be sending a notable signal to the Trump administration that it is not succumbing to pressure from the president and his cabinet to weaken several of its climate-related regulations set to go into effect in the coming months and years. This includes the EU’s deforestation ban and the corporate sustainability due diligence directive.
INTERIOR DENIES CANCELING NEVADA’S ESMERALDA 7 SOLAR PROJECT: The Department of the Interior is denying that it canceled Nevada’s massive solar project, according to Utility Dive.
An Interior Department spokesperson told Maydeen in a statement that the Bureau of Land Management did not cancel the Esmeralda 7 project. They said that “During routine discussions prior to the lapse in appropriations, the proponents and BLM agreed to change their approach for the Esmeralda 7 Solar Project in Nevada.”
As a reminder: The BLM updated its planning website last week for the Esmeralda 7 project, stating that the agency’s environmental review has been “cancelled.”
The project would build seven solar power plants with battery energy storage on approximately 118,000 acres of BLM-managed public lands near Tonopah, Nevada. It would have produced nearly 6.2 gigawatts, enough to power millions of homes. The seven projects are: Lone Mountain Solar, Nivloc Solar, Smoky Valley Solar, Red Ridge 1 Solar, Red Ridge 2 Solar, Esmeralda Energy Center, and Gold Dust Solar.
The DOI spokesperson said that applicants in the project will submit individual proposals to the BLM to “more effectively analyze potential impacts.” The new approach “ensures focused, thorough assessments of potential impacts on public lands while supporting responsible energy development,” they added.
The environmental review of the projects that have been completed are still “useful” and “beneficial,” the spokesperson said.
GLOBAL COPPER DEMAND SET TO SURGE BY 24% BY 2035: Global copper demand is expected to rise 24% by 2035, the global research firm Wood Mackenzie reports.
The research group said that, although the growth trajectory seems certain, there could be several disruptions that can increase demand and price volatility. One of those disruptions would be the growth in data centers.
Wood Mackenzie said artificial intelligence is set to consume an additional 2,200 terawatt hours of electricity by 2035. They said it would increase copper demand for grid infrastructure alone to 1.1 million tonnes per annum by 2030.
“Data centres create inelastic demand in the market,” Wood Mackenzie director of global copper markets research Peter Schmitz said. “When developers require copper for the expansion of data centres, it is used with little concern for the copper price. This dynamic in a nascent sector makes data centres an unpredictable and volatile source of demand this decade.”
The research group added that energy transition and supply, Asia’s industrialization, and defense spending would play a role in copper demand.
RUNDOWN
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