A panel of CEOs and chief financial officers of large renewable energy developers talked at the Infocast Projects & Money conference in New Orleans in late January about the effects of the Trump executive orders, tariff threats, DeepSeek breakthrough and other developments on the US renewable energy market. The following is an edited transcript.

The panelists are Blake Nixon, CEO of National Grid Renewables, Cassidy DeLine, CEO of Linea Energy, Ingmar Ritzenhofen, CFO of RWE Clean Energy, Justin Lagasse, CFO of Avangrid, and Pedro Pires, CFO of EDP Renewables North America. The moderator is Keith Martin with Norton Rose Fulbright in Washington.

Slowdown in Renewables?

MR. MARTIN: Two tectonic shifts occurred in the past week. One is the inauguration last week of President Trump, and the other is the DeepSeek news this week that caused Nvidia shares to drop 17% in value. Many people have been asking whether the series of executive orders President Trump issued last week and the other actions he is expected to take in the future mean there will be a slowdown in renewable energy this year.

MR. NIXON: They have created a lot of confusion. Confusion causes people to slow down. However, in the broader scheme of things, they are a blip on the radar in a power industry that is steadily ramping up. I do not believe long term we will see a slowdown in the business.

MS. DELINE: I agree. Wind and solar have continually outperformed basically every forecast since the 1990s. We have continued to add more new capacity each year than any forecaster has been bold enough to say would happen, and that has been in the face of numerous PTC cliffs prior to the Trump administration. This is an industry that knows how to deal with uncertainty. We will continue to build.

MR. RITZENHOFEN: It is important to talk about fundamentals, and the fundamentals are that we have total electricity demand in the US of roughly 4,000 TWh. If we grow at 2% to 3% a year, which is probably conservative and is driven not only by data centers and AI but also by electrification, that will require a lot of additional capacity. In addition, you have economic growth, and you have the reshoring of industry. That is still adding some 90 TWh a year. That is adding the load equivalent of Louisiana every year.

The more aggressive forecast for load growth is double that. It is adding the load equivalent of the state of New York, including New York City, every year. So from that angle, the fundamentals are strong.

There is near-term uncertainty, and we still need to see what that means.

MR. LAGASSE: We are looking in New England at electricity demand growing by 17% to 35% between now and 2030, according to ISO-NE and NERC. Replacing renewable energy with other sources will take time. That is a lot of load growth to accommodate. Utilities will take a cautious approach, evaluate what the government is doing, come up with action plans and assess the risks.

MR. PIRES: I do not disagree with anything that has been said. There is a lot of political uncertainty. I would not be surprised to see some people sit on the sidelines until there is more clarity. It is hard to have a bullish outlook from a developer perspective in the aftermath of the executive orders and uncertainty around the tax laws and tariffs.

EDP Renewables has invested $18 billion since we came to this market. We have 11,700 megawatts of operating capacity. Fifty percent of our capital allocation in the last couple years has been in the US, despite the fact that we are present in 30 countries. This shows that we have a lot of commitment to this market and really believe in it.

We also have a fiduciary responsibility toward our shareholders. In these uncertain times, we are revising our capital expenditures program in the near term to adapt to whatever comes out of the Trump administration.

In the longer term, renewables have a momentum that stems from market forces. Growth forecasts for electricity demand have never been higher. Renewables are available. They are a cost competitive technology. They are here now and can be easily deployed, which is not the case for all technologies. We remain cautiously optimistic.

This year will be a year of prudent capital allocation decisions, but we will weather this and I am sure the sector will come out again in glory.

MR. MARTIN: Another way of getting at the same question is to ask how many of you are still hiring. [Pause]

I see four and a half hands raised. Pedro Pires, you twisted your hand as you raised it.

MR. PIRES: We have 1,100 people in the US.

DeepSeek

MR. MARTIN: Let me ask about the other tectonic shift, which is the news this week that DeepSeek, an AI platform in China, has managed to leapfrog OpenAI at a small fraction of the cost. It could be a Sputnik moment for the United States, with potentially less need for electricity. Julien Dumoulin-Smith from Jefferies put out a provocative question this morning: “Will the data center boom stop dead in its tracks before it gets going?”

Are you worried that electricity load growth will be smaller than is being currently projected? It may be too early to know.

MR. NIXON: Of course. Share prices of some of the leading players in the power industry fell 20% the day after the DeepSeek news. They went the wrong way, but that was after 200% to 300% upward movement in the last 12 to 18 months. The market is trying to synthesize a lot of information in a short period of time.

I have been in this business for 21 years, and I spent the first 19 years begging for power purchase agreements. Last year, we found equilibrium. This year, we get to choose customers. That is an indication of what the market is telling us about electricity demand.

Am I worried? Yes. Am I worried about the long-term trends? No, not at all.

MR. MARTIN: There is an interesting book by James Surowiecki, who used to write for the New Yorker magazine, called The Wisdom of Crowds. After the Challenger space shuttle disaster, when there could have been four companies whose products were to blame for the explosion, the market settled by the end of the first day on the company that made the O-rings. It took a year of investigation to confirm that it was in fact the O-rings. Yesterday, Vistra and Constellation stock went down. The collective wisdom of stock market investors seems to be that power needs will be lower.

Cassidy DeLine, should we doubt the data center-driven demand forecasts?

MS. DELINE: The DeepSeek news is certainly concerning, but I think that it is important not to lose sight of a couple things.

The first is that demand for power has been flat since the 1970s, with the exception of perhaps 1% or 2% load growth in Texas. We have been talking about unprecedented increases in electricity demand only since last April or May. For the first time ever, ERCOT has delayed the release of its CDR report on capacity, demand and reserve margins. We have on good authority that the reason for the delay is because every way they run it, they are out of power by 2027. That is a problem.

Markets find ways to do things more efficiently. We are seeing an example. The magnitude of how much more efficient DeepSeek appears to be is startling and concerning, but the massive load growth forecasts for data centers were only going to work if there were massive technological improvements.

There is a good analogy in Javon's paradox. A long time ago, we had a step function change in the efficiency of coal plants. People thought that because of the improvements in generating efficiency, we would not have to build as many power plants. What happened instead is that it drove demand and more power plants were needed than anticipated. I think we will see something similar.

MR. RITZENHOFEN: I agree that we need to cut through the noise. There was lots of excitement about AI, and now there is a bit of a correction. There will be an interest in having data centers in the US for national security reasons, and that will continue to drive demand.

MR MARTIN: We appear still to have the power-hungry version of AI in the United States. Justin Lagasse, any need to reassess the 17% to 35% load increase by 2030?

MR. LAGASSE: At least for New England, the load forecasts are not being driven by data centers. We have old infrastructure in the United States with a lot of retirements expected in the next decade. We need to replace it with other forms of supply.

Artificial intelligence is supposed to provide faster, smarter responses. If we thought that artificial intelligence would not get more efficient over time, we were misguided. That is what we are seeing in DeepSeek. There will be other breakthroughs. I continue to see material load growth despite this blip.

Approval Delays

MR MARTIN: Pedro Pires, President Trump last week issued more than 20 executive orders. One of them directed federal agencies not to issue any new or renewed approvals, rights of way, permits, leases or loans for onshore or offshore wind projects, until the government can complete a comprehensive assessment of its policy toward wind.

Most onshore wind projects are on private land, but there can be federal touchpoints for some projects. Do you think a large percentage or a small percentage of projects is likely to be affected by this particular order?

MR. PIRES: I expect little impact in terms of onshore. Certainly we might see some delays in permitting, namely for projects that need to cross transmission lines over federal land. There is some environmental or FAA permitting associated with it. But at the end of the day, I expect a small percentage of onshore wind farms to be affected.

We expect to complete only 300 MW of onshore wind this year. It is unclear what effect the Trump order will have on repowerings of existing wind projects. We are betting that we only need state-level approvals and permits, but we are still looking into this.

MR. MARTIN: Do you need determinations by the Federal Aviation Administration of no hazard to aviation for repowerings of existing wind farms?

MR. PIRES: If the tower heights increase, probably yes.

MR. MARTIN: It is unclear whether an FAA determination is an "approval" if the agency is required by statute to respond to your question. Let me ask the other wind developers. Small percentage or large percentage affected?

MR. LAGASSE: Most onshore wind is on private land, so you do not have a lot of federal land issues from that perspective, but there could be other federal touchpoints, like impacts on federally protected species.

I do not see a large impact in the near term. Projects that are already under construction already have their permits and government approvals. It is too early to tell the effect on the next wave of late-stage development projects.

MR. MARTIN: Cassidy DeLine, there were rumors last week that federal agencies are slowing approvals across the board. Some solar and geothermal developers have reported delays. Are you seeing that as well?

MS. DELINE: We have not run into it. I think the impact of this is still unknown. The biggest trump card that they have is the FAA. The legality of delaying such approvals is a bit of a grey zone.

The vast majority of projects are on private land. We have one project we are developing in Washington State with the Bonneville Power Administration. That brings into play the National Environmental Policy Act. It is hard to know what the impact will be. There are a bunch of similar niche cases that the industry is still working through.

MR. NIXON: There are lots of reasons why projects have delays. Lack of transmission is the biggest issue in the industry, full stop. We have supply chain issues. Tariffs could become an issue again. We are used to delays. We are used to pivoting.

MR. MARTIN: Your middle initial is D?

MR. NIXON: It’s E, sorry. What was the joke? Go for it.

MR. MARTIN: I was going for D for delay.

MR. NIXON: E for expedite. [Laughter]

MR. MARTIN: One of the other executive orders last week placed an immediate pause on “disbursements” of federal loan guarantees, grants and other spending on clean energy. Has that affected your companies?

MR. RITZENHOFEN: We are not recipients of the grants or loans, so therefore for us, it doesn’t have any effect.

MR. LAGASSE: Likewise for us.

MR. PIRES: As long as the advice that tax credits cannot be denied by executive order holds, we are fine.

Financings and Valuations

MR. MARTIN: The Republican Congress is expected to roll back parts of the Inflation Reduction Act this year. It is unclear whether it will do so early in the year or wait until the fall.

Many people rushed last year to start construction of projects. That locked in an option to claim tax credits under the 2024 tax code before the tax credits moved to technology-neutral tax code sections this year. The big tax equity investors told us on a cost-of-capital call in mid-January that they do not expect any slowdown in financings for projects that were under construction by the end of last year. Is that consistent with your experience?

MR. NIXON: Yes.

MS. DELINE: Same.

MR. LAGASSE: Same.

MR. RITZENHOFEN: Same.

MR. MARTIN: Electricity is expected to be in short supply in the near to medium term, due not only to data centers, but also to electrification of transportation, new factories and more energy-intensive search engines. Is this leading to higher valuations for power plants? If yes, any sense of the magnitude?

MR. NIXON: The answer is absolutely yes. You can see it in the share prices of publicly-traded independent power companies. The effect has been more pronounced in the conventional space than the renewables space. The renewables space is viewed much more as a discounted cash-flow exercise, and unless there is a large movement in interest rates, I don’t see any meaningful change, good or bad, in the renewables space.

A 200% to 300% increase in the share prices of Vistra, Talen and Constellation shows you that a lot of value is being ascribed to the future cash flows of conventional assets.

MR. MARTIN: We had an argument over dinner last night between a private equity fund investor and everyone else. The PE fund investor is free to invest wherever he wants. He does not believe the residual values for renewable energy projects will hold like they will for gas-fired power plants. All the renewable energy developers around the table disagreed.

Cassidy, what are you seeing in terms of valuations?

MS. DELINE: On the renewables side, it is a liquid market. Renewables are all capex and very little opex, so we are inherently much more affected by the cost of capital and by an inflationary environment than thermal assets are. This means that while electricity prices may be increasing, that might not translate into higher valuations.

As Blake mentioned, transmission is a problem. If you have a queue position, there is repower value to that, and that value is there regardless of technology.

MR. NIXON: At dinner last night, I offered the private equity guys that I would write them a put at their residual valuations, and none of them took me up on it. If anyone wants to buy a put from me on future residual values to which all of you financers can underwrite, see me after the panel.

Inbound Investment

MR. MARTIN: There was a period of time when CFOs talked at industry conferences about potential investors throwing money at them. Strategic investors who missed the initial renewables wave wanted to get into the game. Ted Brandt from Marathon Capital talked about people carrying satchels of euros over to the US.

We had a call with five equity analysts right after the November election, and some of them said they are starting to see foreigners sit on the sidelines until it is clearer what Trump and the new Republican Congress will do on renewables. Are you seeing this? Some of you are in the market raising equity.

MR. PIRES: What the equity analysts said aligns with the broader market sentiment.

When the IRA was enacted in 2022, one of the highlights was the visibility it provided by locking in at least 10 years of tax credits. We could invest with confidence. Investors supported us knowing that this framework was set, and it attracted a lot of investment and new projects to the sector. It is only fair to say that in the same way the IRA ushered in a positive period of confidence and stability, the lack of clarity that we have today might cause some developers to sit on the sidelines.

We launched our 2025 request for proposals from financiers in the middle of last year. We had substantial interest. We expect to finance eight projects with a total of 1,200 MW in capacity this year. No one who bid has backed out.

But I see a change in overall sentiment. Investors are still confident about projects that have locked in tax credits because they were under construction by the end of last year, but they are sitting on the sidelines and more cautious or strategic about other projects.

MR. LAGASSE: Avangrid is 80% regulated distribution and transmission, so from a capital allocation perspective, we will need multi-billions of dollars as we look forward into the next decade to cover our capital needs. We think the satchels of euros will continue to come. I don't see a wholesale change in interest among investors in the US power sector.

PPAs

MR. MARTIN: Next question. Any rollback of tax credits will make some projects uneconomic to build. Are you seeing offtakers willing to increase electricity prices in the event of such a rollback to offset the loss of tax credits?

MR. RITZENHOFEN: It is a question of demand and supply. We have a lot of offtakers that need the electricity and are willing to pay more to get it. Of course, they are not price insensitive, so that is where you have the discussion. The question is what is the next best alternative.

MR. MARTIN: What do those offtakers want in return?

MR. RITZENHOFEN: They want certainty of delivery. As long as you can deliver, it is what gets you ahead in those discussions.

MR. MARTIN: Raise your hand if your experience is offtakers are willing to increase electricity prices to offset loss of subsidies. [Pause] I see all five hands up.

In our experience, what they want in return is more renewable electricity at the higher price. Is there anything else? Ingmar Ritzenhofen said confidence the developer can deliver.

MR. NIXON: A big letter of credit as proof.

MS. DELINE: They want to make sure that you can deliver, and they want big security. It is not just the headline price that is important. It is also the contract structure.

In the first Trump administration, we all knew tariffs were coming. We did not know what they would look like, and very few offtake deals got done over the course of that first year. Given the rise in demand, we simply cannot place projects on hold today. These deals have to get done. Offtakers need to know projects can deliver. This is leading to greater interest in mechanisms within contracts to adjust prices for future unknowns and future variables.

Property Insurance

MR. MARTIN: The California wildfires have been horrifying to watch. They could eventually affect the price of insurance. The effect will be more pronounced on residential insurance. Property and casualty insurance for utility-scale solar projects could eventually be affected if the premiums charged in the reinsurance market increase.

Are there parts of the country where insurance cannot be bought at any price?

Property and casualty insurance must be renewed annually. What do tax equity investors and lenders say if you notify them, after a project has already been financed, that spiraling premiums have made the insurance uneconomic to renew?

MR. PIRES: It is both an easy and a difficult question. An easy one is I can tell you currently we are enjoying full-value coverage under our operational risks policy. Obviously it comes with an elevated deductible. The reason that we have this kind of protection -- and probably this is where most developers need to move -- is we retain some of this risk through a group captive insurer.

For the future and in the aftermath of this dramatic event, the initial conversations that we have been having suggest that high-dollar insurance companies are going to be very specific and remove the protection for a number of assets that sit in high-risk areas or simply exclude it as an overall exclusion to the policy.

MR. MARTIN: You cannot build there.

Domestic Content

MR. MARTIN: The US offers a bonus tax credit if you use enough domestic content. How common is it in your projects to reach the required threshold?

MR. NIXON: We have reached the domestic content threshold on all of our solar projects.

MR. MARTIN: Are you having to buy tax insurance or does the market accept that you qualify?

MR. NIXON: You have to buy insurance. That is a heavily negotiated part of any financing.

MR. RITZENHOFEN: We also see many wind projects qualifying for the domestic content bonus credit. It depends basically on which supply chain choice you make. On the solar side, there are specific limited options that allow domestic content. On the battery side, there are limited options at this point as well.

MR. MARTIN: The American Clean Power Association said in 2023 that it thought wind projects would have a hard time finding the US-made steel towers needed to qualify before 2026.

MR. RITZENHOFEN: We see sufficient supply at this point.

MR. PIRES: We have both wind and solar projects that qualify, but it can be difficult to work with suppliers to prove the domestic content and make sure everything is documented. That is the reason why most tax equity investors do not rely on the cost approach and require qualification under the safe harbor tables the IRS issued.

Trade

MR. MARTIN: One of the other Trump executive orders last week directed the Commerce Department to look into revoking permanent normal trade relations for China. That would lead to massive tariff increases on Chinese goods. Trump has been threatening a broad array of tariffs in the last few days. How are your equipment procurement contracts dealing with the tariff risk? Who takes that risk?

MR. LAGASSE: It is a heavily negotiated point. The risk ends up being shared.

MR. RITZENHOFEN: We have seen a lot of reshoring to the US. There is significantly more domestically manufactured equipment. The supply directly from China to the industry at large has decreased very significantly over time.

MR. MARTIN: Are offtakers willing to increase the electricity price to cover future tariffs?

MS. DELINE: To a point. If we revoke normal trade relations with China, the order of magnitude of that tariff could be very, very high. That is one of the adjusters that we are actively negotiating to include in our PPAs.

MR. MARTIN: Let’s move to the Uyghur Forced Labor Protection Act. US Customs has detained solar panel shipments over forced labor concerns. It is difficult, very time consuming and expensive to try to get detained shipments released. Are any of you seeing detentions of utility-scale batteries?

MR. NIXON: Not yet, no.

MS. DELINE: We have heard of such detentions but not seen them ourselves.

New Trends

MR. MARTIN: Next question. All of you come from the finance world. Tax credits raised $40 billion for the renewable energy industry in 2024. Debt for this sector was about $57 billion. What new trends are you seeing in the renewables market as we enter 2025?

MR. RITZENHOFEN: A striking development has been the speed at which transferability has picked up. It has become an important ingredient in the overall market in the space over the last year and a half. It provides important liquidity. It has enabled new financing structures that are also driving efficiency.

MR. MARTIN: The Inflation Reduction Act has been a huge tailwind the last two years. Most people working in the renewables sector have been exhausted by the pace. There have also been headwinds such as labor shortages, supply chain difficulties and inflation. Has there been any change in strength of the headwinds, aside from the new Donald Trump headwind?

MR. RITZENHOFEN: The important headwinds to add to those you mentioned are interconnection and transmission, permitting and a spirit of “not in my backyard.” We are never going to get the electricity we need without tackling grid congestion and speeding up permitting processes.

MR. MARTIN: Many large developers formed teams to go after the hydrogen market. They saw hydrogen producers as potential offtakers for electricity. Some developers were also chasing bitcoin miners for the same reason. Have you pulled back from hydrogen? Is there renewed interest in bitcoin given the Trump administration’s interest in cryptocurrency?

MR. NIXON: We never launched on hydrogen. The math never worked. We have been approached by lots of bitcoin miners. We are doing a transaction with one.

MR. PIRES: We are pulling back from hydrogen and scaling down our hydrogen efforts here in the US. That does not mean that we have lost faith in the hydrogen market. We are developing hydrogen in Europe. The regulatory measures required to incentivize hydrogen consumption are not here.

This is still potentially a good market. You have the IRA and good wind resources. There is even a case for producing hydrogen here and exporting it to Europe where there is demand because of incentives to use hydrogen.

MR. MARTIN: Here is a question from the audience. "Is there any negotiation on risk if section 45X" -- which is a tax credit for manufacturing wind, solar and storage components -- "goes away for foreign entity of concern ownership?" Marco Rubio and others have proposed denying tax credits to US factories with Chinese shareholders. Is the potential loss of section 45X tax credits to such factories a factor in any of your procurement decisions?

MS. DELINE: We are assuming that something like that will be enacted. People are thinking about creative ownership structures as work arounds.

MR. MARTIN: Here is another audience question. "How does the mix of headwinds for new development and tailwinds for assets that are under construction affect how you think about derisking renewables and storage?"

MR. RITZENHOFEN: The risks change over time. During Covid, we had supply chain issues. Before that, we had PTC cliffs as the PTC lapsed and was renewed periodically. Now we have a new set of risks that we need to manage prudently.

MR. MARTIN: My last question is for Blake Nixon. Eight years ago on a panel like this, you said that lack of transmission capacity is the number one issue for the industry. We can build projects, but we can’t get the electricity to market. Has anything improved over the last eight years?

MR. NIXON: No.

MR. MARTIN: That is our last word.

MR. NIXON: It has become worse. I heard an interesting contrarian take last night at dinner, which was that the IRA was the worst thing that happened to the renewables business. There is some logic to that. The IRA led to the addition of hundreds of gigawatts of new projects in interconnection queues, clogging them further. This remains the number one issue for the power industry, not just for renewables, but also for gas and nukes.