Energy transition, meet presidential transition.
Six weeks before President-elect Donald Trump moves back into the White House with vows to upend climate action, nearly 2,000 founders and investors pushing climate solutions gathered in Washington DC for the Department of Energy’s second annual “Deploy” conference.
For a climate tech conference, there was little talk of, well, the climate. The new talking points: Creating jobs, cutting energy prices, and strengthening America’s hand in the competitive race with China.
The conference, DOE’s second and, at least for now, last, was planned in March. Back then, the agency could hope it might have four more years to deploy the historic funding the Biden administration had secured for critical energy and decarbonization technologies in the US.
Instead, the clean energy and infrastructure crowd is bracing for a backlash. DOE employees are scrambling to get funds out the door, even as they mull their next career moves. Trump has vowed to slash jobs and spending in federal agencies and quash his predecessor’s signature initiatives, such as the ambitious climate funding authorized by the Inflation Reduction Act.
Trump has said he will “rescind all unspent funds” from the law, which includes $145 billion in direct spending on energy and climate programs and another $500 billion or so in tax credits. His ability to carry that out has limits: Once funds are obligated by a federal agency, they are legally protected, for now, by the Congressional Budget and Impoundment Control Act. The measure was passed in 1974 after then-President Nixon refused to release funds for congressionally approved programs he opposed.
The Environmental Protection Agency, for example, has signed contracts with the grant awardees of its $27 billion Greenhouse Gas Reduction Fund.
More vulnerable is DOE’s Loan Programs Office, which makes loans and guarantees for innovative climate tech companies looking to build their first and second plants in order to provide a “bridge to bankability.” Under the Inflation Reduction Act, LPO’s lending authority was boosted from $40 billion to $400 billion.
Under climate tech veteran Jigar Shah, the LPO is just hitting its stride. It has announced 32 deals totaling more than $54 billion in project investments for everything from solar and battery manufacturing to nuclear energy and virtual power plants. That’s a fraction of the 212 active loan applications seeking $324 billion in LPO’s pipeline.
“We need Jigar to keep shoveling money out the door right up until January 20,” said John Podesta, the White House climate advisor.
Staying power
As the conference was taking place, Vivek Ramaswamy, who with Elon Musk has been tasked by Donald Trump to slash government costs, threatened to claw back a $6 billion conditional loan that LPO last week extended to EV maker Rivian to build a factory in Georgia. (Musk’s company Tesla received a pivotal $465 million loan from the agency in 2010 to build its first factory).
And House representatives penned a letter to Shah last week demanding that LPO “cease its campaign to quickly distribute federal funding before the incoming administration takes office.”
So far, the Loans Program Office says it has finalized just 14 loans totaling $13.5 billion.
Applicants go through a lengthy due diligence process— beefed up along with its increased lending authority—and the loans are made on a conditional basis, pending financial or technical milestones. Rivian’s loan, for example, has been in the works for close to two years.
“Building a car company, building an energy company, these are businesses that take a tremendous amount of capital,” Rivian founder RJ Scaringe said in a conversation with Shah. “The role of the Department of Energy is the scaling partner.”
At times it seemed the speakers were making their case to the Trump transition advisors who were rumored to be in attendance.
“When you’re doing something disruptive and something completely new, you start in the lab, you go to the pilot, then you go to demo, then you build the first commercial, and you go to a bank and they literally laugh at you,” explained Jennifer Holmgren of carbon recycling company LanzaTech. “Your risk premium of building something disruptive is not a risk they can take.”
“The public money then is very helpful, right? It allows you to derisk to the next stage, when the private capital can come in and help you deploy,” added Holmgren, whose company received a $3 million grant from DOE in October.
Administration officials rubbed like a talisman the oft-cited statistic that nearly 60% of the new clean energy jobs created under the IRA and 80% of the investment are located in Republican-led districts.
“Clean energy has become bipartisan in the United States,” Podesta said. “It’s precisely because the IRA has staying power that I’m confident that the United States will continue to reduce emissions going forward, benefiting our own country and benefiting the entire world. The economics of the clean energy transition have simply taken over.”
For every dollar of public funds, another $6 is invested by the private sector, declared Energy Secretary Jennifer Granholm. “It would be political malpractice to undo the incentives that are causing all of this economic activity in those red states.”
New narrative
DOE officials and conference speakers tried to prepare climate tech founders for the new environment and find common ground.
The two-day conference was light on solar and wind energy but featured potential areas of bipartisan interest such as nuclear power, geothermal energy, green hydrogen, grid resilience and critical minerals.
Rare was the founder who pitched such projects for their climate impact. An exception was James Calaway of Ioneer USA, which is developing a lithium carbonate mine in Nevada. Calaway drew applause when he said, “I’m doing this to save the planet for my children and my grandchildren.”
He added, “We as a nation have to make these investments. If we fail, China is going to have our lunch.”
Heather Reams of Citizens for Responsible Energy Solutions, a right-of-center nonprofit trade group, advised cleantech founders to rethink their messaging in a way that will resonate with the new administration’s interests.
“Energy is top of mind for this [Trump] administration, which means opportunity. How are you solving the problem?” she said. “You’re not changing your business. But you’re pivoting the words that you use in those meetings.”
Climate tech founders expressed confidence that economics, rather than politics, would carry the day— at least for their particular niches.
An executive of a lithium-ion battery producer suggested that the tariffs Trump has said he’ll levy on imports could help jumpstart a domestic battery industry. Another executive at a maker of all-electric pre-fab homes was optimistic the LPO loan he hoped would be approved in January would not encounter pushback. After all, he said, “It’s housing.”
Silver linings
Investors, too, looked for upside.
“A lot of what we do is not energy,” said Rob Day of Spring Lane Capital, a funder of sustainable infrastructure projects including waste, water, energy and other sectors. “We look for things that just have good underlying fundamentals.”
The IRA incentives have created tailwinds, he said, but Spring Lane has sought to insulate itself from that. EVCS, an EV infrastructure developer in California that the company has backed, for example, is working with state-level incentives that are not at risk.
“Short term policy dollars to bridge a company that clearly has a path to standing on its own two feet, that’s okay,” said Jonathan Garfinkel of TPG Rise Climate. “But we have seen a lot of business plans where you need policy dollars forever, and that’s just not okay.”
Those business plans will be scrutinized with the incoming administration, he said. “We’re going to enter into a next phase where the durability is going to be tested. And there’s a piece of me that thinks that maybe there will be something helpful about that, because the test will take place.”
Clarity around what investment opportunities are resilient, he said, “is an important silver lining.”
Even if the Trump administration is unable to roll back climate spending and incentives, it could slow momentum by gutting the agencies charged with carrying out the programs. DOGE, the unofficial chop shop headed by Musk and Ramaswamy to eliminate wasteful government spending, has promised to cut $2 trillion from the federal budget, in part to pay for an extension of Trump’s 2017 tax cuts.
They are considering reclassifying federal workers to reduce their job protections or relocating them to states like Kansas. “That’s going to be really damaging, because those are the people who actually do fulfill these programs,” said Spring Lane’s Day.
That means sticking to fundamentals is even more important. “It’s going to be a brand new world,” he said. “It’s going to be hard to predict.”
