Net Zero

1. Climate cabinet takes shape
2. Unfixable insurance
3. North Africa solar boom
4. Power market mega-merger
5. Transition turbulence

Climate chatter at Davos, and BlackRock topples a climate group.

Climate cabinet takes shape

US President-elect Donald Trump’s climate cabinet is taking shape. Senate confirmation hearings for Trump’s nominees to lead key energy and environment posts start this week. None of the three — North Dakota Gov. Doug Burgum for Interior, fracking executive Chris Wright for Energy, and Lee Zeldin, former Republican representative from New York, for the Environmental Protection Agency — are especially popular with Democrats. But they’re among the least controversial of Trump’s picks: Zeldin, at least, should face little trouble, Sen. Shelley Moore Capito (R-WV), a powerful figure on energy in the new Congress, told Semafor: “His skillset is well suited to implement the agenda of President Trump.”

Sub-principal positions — which, under Trump’s leadership style, can end up wielding considerable power by flying below his rage radar — are also filling. Ed Russo, a consultant to the Trump Organization who wrote a book calling Trump “an environmental hero” will be a top environmental advisor to the White House. An executive from NextEra Energy, one of the country’s top operators of fossil and renewable power plants, was tapped as Burgum’s deputy. The EPA’s top lawyer during Trump’s first term will be Zeldin’s deputy, and the former chair of the US grid regulator under Trump will be Wright’s.

The home insurance crisis can’t be fixed with money alone

The devastating wildfires that are sweeping Los Angeles may accelerate the flight of home insurance companies from California in spite of recent regulatory changes aimed at retaining them, the state’s previous top insurance official told Semafor.

At least two major fires are still raging largely uncontained, aided by ongoing high winds, and 24 people have been killed, with initial estimates indicating the blazes could be the costliest in US history, resulting in up to $30 billion in insured losses and up to $150 billion in total economic losses.

For California to experience fires like these “was never a question of if, it was a question of when,” said Dave Jones, California’s former insurance commissioner. The fires “shouldn’t be a pretext for the insurers to renege on their commitment to start writing again in California,” he said, “but they might anyway.”

Wildfires aren’t the only problem. Realistically pricing the risk posed by floods could wipe nearly $3 trillion off the $46 trillion value of the US housing market, research published today by Susan Crawford, senior climate fellow at the Carnegie Endowment for International Peace, concluded. To safeguard the stability of the housing market going forward, she argues, flood insurance needs to become better and more widespread. That starts with boosting FEMA’s work on future-facing flood maps, a project that could be in jeopardy if the incoming Donald Trump administration moves ahead with plans to scale back federal climate science.

Read on for more on why raising rates won’t solve the insurance crisis. →

Rapid advancements in artificial intelligence present a transformative opportunity to drive the global energy and climate transition. Join Ricardo Manuel Falú, AES Executive Vice President, Chief Operating Officer, and President of New Energy Technologies, along with Semafor’s Technology Editor, Reed Albergotti, as they explore how AI can enhance mitigation efforts, support adaptation strategies, and develop the infrastructure for a low-carbon future

Jan. 22, 2025 | Davos, Switzerland | Request Invitation

North Africa’s solar boom

Soaring natural gas prices are fuelling demand for solar energy in Egypt, raising hopes that the Arab world’s most populous country may finally accelerate its green transition. Falling domestic gas production and booming electricity demand amid sweltering temperatures led to blackouts across the country last year. Now investors are ploughing billions of dollars into solar energy projects, which could produce electricity for as little as two or three US cents per kilowatt hour. Several North African countries are following suit: Algeria, which currently generates more than 90% of its electricity from gas, has issued tenders for three gigawatts of solar energy, while Morocco unveiled plans for its biggest solar farm last year.

Power market mega-merger

Price paid by Constellation Energy to buy its peer power company Calpine, one of the industry’s biggest mergers in recent years. The deal is intimately linked to the booming energy demand of data centers: Constellation, the top US operator of nuclear power plants, wanted greater access to the market in Texas, where Calpine operates a fleet of gas plants. More consolidation is likely as the biggest power companies position themselves for a bull market. Constellation’s share price jumped 25% to a record high following the news.

Transition turbulence

Europe’s turbulent energy transition is running into new obstacles.

The region is awash in new solar and wind power, so much so that during times of peak production — a summer afternoon, for example — the grid is overwhelmed and plants have to be paid to shut off. Utilities faced a record number of hours of negative pricing in 2024, effectively undermining the investment case for new renewables even as governments continue to subsidize them. A more effective strategy for grid balancing is needed, the analytics firm Aurora Energy argued in a report, or installations will slow and Europe will miss its climate targets. Wind projects in Germany also face mounting opposition from far-right politicians.

Meanwhile, the closure of coal-fired power plants and gas import terminals from Russia has Europe importing a record amount of Russian liquefied natural gas. That has left it more exposed to repercussions from escalating US sanctions on Russian LNG terminals, analysts warned. And a Molodovan breakaway region that has been most impacted by the shutoff of Russian pipeline gas is now turning to Ukraine’s vast coal reserves instead.

New Energy

• Fluence Energy, a US battery maker, won a €140 million contract to build grid-scale batteries for the battered electric grid in Ukraine.
• US clean tech manufacturing is booming, but many of the key preliminary components for EV batteries and solar panels are still made in China, showing how far the US has to go for clean energy self-sufficiency.
• The UK’s new nuclear power plant in Suffolk will likely cost £40 billion, double its original cost estimate.

Fossil Fuels

• Coal power production in the US fell to its lowest level in 60 years in 2024, but because of growing power demand, overall emissions remained flat.
• Coal production and imports in China, meanwhile, show no signs of slowing.

• Colombian President Gustavo Petro is on a quest to end fossil fuel drilling in his country — but is filling the gap with imported LNG.
• BP warned of glum fourth-quarter earnings as a result of lower oil prices and refinery margins.

Finance

• Following the departure of BlackRock from the Net Zero Asset Managers alliance, the group plans to suspend its activities and review whether it “remains fit for purpose in the new global context.”

Courts

• The US Supreme Court declined to hear an appeal from oil and gas companies seeking to block climate lawsuits targeting them, allowing a suit from Honolulu to go forward and opening the door for more to come.

Minerals & Mining

• Indonesia wants to get more value out of its nickel. But transforming into a full-blown EV manufacturing powerhouse may be the wrong tactic, the Economist warns.

EVs

• Global EV sales rose 25% in 2024 to a record 17 million. But success among automakers is mixed: Stellantis met its sales target, but Volkswagen missed its.
• Meanwhile, the market for low-cost EV leases continues to sizzle.

Daniel Yergin, vice chairman of S&P Global and author of The New Map: Energy, Climate and the Clash of Nations.

Republicans in Congress are locked in a fight over a tax bill that many estimate will take months to resolve, Semafor’s Burgess Everett reported.