Net Zero

1. Spain shows grid risks
2. Trump’s AI power problem
3. Clean manufacturing dips
4. Exxon’s green boost
5. Rising insurance costs

Madrileños survive blackout with sidewalk beers, and Russia’s oil companies survive Western sanctions with more drilling.

It’s still a good time to be in the US energy business. At Semafor’s World Economy Summit last week, “uncertainty” was the word of the day, with just about every executive present lamenting the difficulty of doing business in the middle of a trade war whose front lines shift by the hour. The energy executives I spoke to were in many ways no different: Although the pandemic had already taught them some unforgettable lessons about supply chain diversification and price volatility, there’s a palpable apprehension about how to make billion-dollar investments in the energy system when prices and consumer confidence a few months hence are so opaque.

Still, compared to most industries, energy is on a rapid growth trajectory that is both new — the main characteristic of US power demand in the last decade has been its flatness — and about as certain as anything can be these days. Serving that growth entails plenty of bureaucratic and engineering challenges, but anyone who figures them out is in for a serious payday.

“We’re in a multi-decade transition away from globalization into domestic security and supply chains,” Patrick Maloney, CEO of the new investment firm CIV, told me. “That’s going to require an incomprehensible amount of energy, and we’ve barely scratched the surface. If you’re Microsoft or Amazon, your future growth is dependent on your capacity to secure power — or conversely, your degrowth, if you don’t.”

Grid risks

Spain and Portugal restored virtually all power after a mass blackout, but the episode signaled deeper worries about countries’ dependence on struggling power grids as they electrify their economies. The sweeping power failure shut down public transport, telecoms, and major infrastructure including airports. The blackout — just weeks after London’s Heathrow Airport was shut down over its own power failure — highlighted the mammoth risks of electricity outages and cast a particular spotlight on systemic underinvestments in power grids that have vast supplies coming online but lack added transmission infrastructure.

Although causes of the outage are still under investigation, Rystad Energy senior analyst Pratheeksha Ramdas said the two countries’ high use of solar and wind power is a “plausible contributing factor” and could have caused a sudden dip in voltage on the grid, leading France — which exports a lot of power to the Iberian peninsula — to automatically switch off its connection to prevent blackouts from spreading more across Europe. “This disruption serves as a clear warning,” Ramdas said. “Without stronger domestic resilience and improved regional coordination, future grid failures could have even more severe consequences.”

The US can’t win on AI without renewables

Some of the biggest US power companies are at odds with senior Trump administration officials on how to fill the country’s looming electricity deficit and beat China at the AI race.

Interior Secretary Doug Burgum told Semafor’s World Economy Summit last week that Washington’s push to fast-track permitting for the development of new energy resources won’t apply to “intermittent” power sources. The continued use of federal tax credits to replace fossil fuels in the electric grid with renewables “would be catastrophic for our country,” he said. Fuels that can run cheaply around the clock, including coal, gas, and nuclear, are the key to US competitiveness on AI, added Burgum, who also chairs the National Energy Dominance Council.

But executives of companies actually managing the delivery of power to new data centers have a more nuanced view: Even as rising trade barriers with China make some technologies more expensive, renewables plus batteries are still the cheapest and fastest way to put new electrons on the grid.

“Before, I always argued that you need some gas in the [power] mix to make it cheaper,” said Andrés Gluski, CEO of the multinational energy company AES, one of the top power providers for data centers in the US, at WES. “Now, I would argue that you need renewables in the mix to make it cheaper. Over the next five years, the bulk of new energy in the US is going to be renewables.”

Clean manufacturing dips

The Trump administration’s trade policies and uncertainty over the future of Biden-era tax credits risks upending the US clean manufacturing boom, according to a new report.

Quarterly investment in clean tech manufacturing has more than tripled since the Inflation Reduction Act’s enactment in 2022. But it fell in the first quarter of this year after six manufacturing projects tied to $6.9 billion in investment were axed, the highest value of quarterly cancellations on record, The Clean Investment Monitor found. Companies are backing out as projects move closer to construction because these more advanced stages are where the impacts of tariffs, policy uncertainty, and macroeconomic pressures “bite the hardest” and market risks come into focus, Hannah Hess, an associate director with the Rhodium Group’s energy and climate practice told Semafor.

One surprising takeaway from the report: Although EV manufacturing “looks massive at first glance” with over 6 million vehicles’ worth of capacity, Hess noted, the US would still only produce about two-thirds of projected domestic demand through 2035, meaning there’s still significant room to grow.

— Mizy Clifton

Exxon’s green boost

Planned spending by ExxonMobil on low-carbon business lines from now until 2030, 10 times higher than its previous guidance. Exxon’s low-carbon spending boost — which the company said will focus on carbon capture, hydrogen, and lithium — puts it ahead of its European rivals on that front, a sign of the company’s confidence in the direction of the energy transition in spite of the Trump administration’s rhetorical opposition to it.

While BP and other European majors took a beating from their shareholders on their green pivots, Exxon’s strategy still largely eschews renewables and electricity, focusing instead on new technologies that in fundamental ways — moving molecules through pipelines — are pretty similar to oil and gas. BP’s first-quarter profits fell by half, the company reported on Tuesday. Weak results are also expected for other majors this week because of low oil prices.

Massive hurricane losses

Annual insured losses from hurricanes and natural disasters could top $145 billion this year alone, the world’s second-biggest reinsurer warned in a new report. Swiss Re forecast that, based on long-term trends, financial losses from natural catastrophes were growing at 5-7% annually, but a “peak year” could drive losses to more than $300 billion.

Key to that growth are economic factors, Swiss Re’s Chief Economist Jerome Haegeli and Head of Catastrophe Perils Balz Grollimund said in a joint interview: The value of assets, such as buildings, is rising and they are increasingly concentrated in urban centers; inflation in building and reconstruction costs; and a more general rise in prices. Though climate change is a factor pushing premiums up, it remains a longer-term issue and less of a factor than overall macroeconomic drivers, they said.

A lesson, Haegeli said, was that executives and policymakers needed to focus more on climate adaptation rather than mitigation: “Adaptation, in my view, should be part of the economic policy toolkit and strategy, because climate adaptation is a growth strategy.”

— Prashant Rao

New energy

• China’s installed wind and solar capacity surpassed that of thermal energy for the first time.
• The chair of Europe’s largest wind turbine manufacturer Vestas warned of a “big discrepancy” between industry targets and less-than-favorable conditions on the ground, from problems securing permits to tariffs.

Fossil Fuels

• US shale driller Matador Resources said it would pull back on investments this year in response to price volatility. And LNG companies say the Trump administration’s new levies on Chinese-built ships docking at US ports threaten the US’ position as a leading exporter.
• Russia’s oil industry, meanwhile, shows no signs of slowing: Its producers have been drilling wells at the fastest pace in at least five years, the latest sign of the country’s resilience to Western sanctions.
• Nigerian LNG — which contributes over one-third of Africa’s total — could capitalize on the ongoing US tariff war, as its strategic location and shorter transit times offer greater flexibility to Asian and European buyers compared to American LNG.

Finance

• The head of the International Monetary Fund downplayed its work related to climate change after US Treasury Secretary Scott Bessent called for the lender to refocus on economic stability.
• European investors were net sellers of “sustainable” funds for the first time on record in the first quarter of 2025, pulling out $1.2 billion.

Politics & Policy

• A leading lawmaker in Germany voiced support for the Trump administration’s plan to potentially lift sanctions on the Nord Stream 2 pipeline, a sign that resumed Russian fossil fuel exports could be a price for peace in Ukraine.

Personnel

• The Trump administration dismissed the hundreds of experts who had been working on the federal government’s National Climate Assessment.

Jeronimo Gonzalez, Semafor operations editor, is based in Madrid.

A sprawling network of private group chats revolving around the venture capitalist Marc Andreessen is the new dark matter of American politics, Semafor’s Ben Smith reported.

“I’ve been amazed at how much this is coordinating our reality,” one past participant of an Andreessen chat told Smith. While comparable private groups exist for Black political elites, anti-Trump liberals, major podcasters, and more, the Andreessen chats represent the origin of the tech-right alliance that currently dominates US politics.