A prospective buyer’s recent commitment to reinvest in a Gary, Indiana, steel plant sought to address union and government leaders’ worries about the sale’s potential impact on jobs and U.S. steelmaking capacity.
The plan to extend the life of the country’s largest and most carbon-emitting coal-fired blast furnace, however, has also heightened concerns from Northwest Indiana residents most affected by the facility’s air pollution.
“This is not acceptable,” said Susan Thomas, director of legislation and policy for Just Transition Northwest Indiana. “We now have technology for doing this much more sustainably.”
A study released Monday quantifies the public health threat highlighted by local clean air advocates, linking the Indiana plant to dozens of annual emergency room visits and premature deaths, as well as thousands of asthma attacks.
Japan-based Nippon Steel is seeking approval from U.S. regulators for a $15 billion acquisition of U.S. Steel, the storied domestic steelmaker whose facilities include the Gary Works plant in Northwest Indiana, along with others in Ohio, Michigan and Pennsylvania, key battleground states where the proposed sale has been a subject of presidential campaigning. Vice President Kamala Harris and former President Donald Trump oppose the sale, as does President Joe Biden.
Much of the public discussion around the proposed sale has centered on its economic and national security implications, but those living near the plant have different concerns and demands. They say they’ve suffered for too long from steel industry pollution, and they only want Nippon as a neighbor if the company installs a new type of furnace that burns with lower or even zero emissions.
“I would love to see Gary Works transform to green sustainable steel, bringing more jobs, cleaning up the area, that would be an amazing win-win,” said Libré Booker, a librarian who grew up near the mill. “The people have lived under these conditions for far too long. It’s definitely time for a change.”
Gary Works is the largest integrated steel mill in North America, employing about 2,200 people. Northwest Indiana is also home to two other steel mills — Burns Harbor and Indiana Harbor — and two coke plants that turn coal into the high-density raw material for steel.
The populations in a three-mile radius of the Gary Works and Indiana Harbor steel mills are 96%-97% people of color, and almost two-thirds low-income people. The new study by Industrious Labs, a nonprofit focused on emissions reduction, used the EPA’s COBRA model to find emissions from the Gary Works plant likely are linked to 57-114 premature deaths, 48 emergency room visits and almost 32,000 asthma attacks each year.
The report cited the mills’ and coke plants’ emissions of sulfur dioxide, nitrogen oxides, carbon monoxide, particulate matter, and lead, all pollutants with direct impacts on public health. Gary Works is the number one emitter of PM2.5 particulate matter in the state, according to the company’s self-reported data analyzed by Industrious Labs.
Industrious Labs steel director Hilary Lewis said the results bolster the demands of clean steel advocates, who want to see coal-fired blast furnaces replaced by direct-reduction iron, or DRI, furnaces powered by hydrogen made with renewable energy, known as green hydrogen.
Booker was among 15 locals who participated in a recent “Sustainable Steel Community Cohort” run by Industrious Labs, attending five workshops learning about the science and policy of cleaner steel.
Green hydrogen, green steel
Green hydrogen is still not produced in large quantities anywhere in the U.S., and all the hydrogen currently produced in the country would not even be enough to power one steel mill, noted Seth Snyder, a partner in the Clean Energy Venture Group, at a recent conference in Chicago focused on clean hydrogen.
But DRI furnaces can be powered by natural gas, which results in much lower emissions than coal. Cleveland Cliffs — which owns the Indiana Harbor and Burns Harbor mills — is transforming its Middletown, Ohio steel mill to gas-burning DRI with the help of a $500 million incentive under the Inflation Reduction Act. The company says the conversion will make it the steel mill with the lowest emissions in the world.
With some modifications, DRI furnaces can burn a blend of natural gas and hydrogen or almost entirely hydrogen, experts say, meaning investment in a gas-burning DRI furnace could be a step on the way to “clean steel.” Lewis and other advocates, however, say gas-burning furnaces are not their goal, and they want the industry to transition off fossil fuels entirely.
Hydrogen can be blended into fuel for traditional blast furnaces too, but the maximum emissions reductions that can be achieved that way are 21%, according to a paper on hydrogen-powered steel production in Europe by the Norwegian non-profit science organization Bellona.
Nippon has announced it would invest $300 million in restoring the aging blast furnace at Gary Works, keeping it running for another 20 years. Installing a DRI furnace, meanwhile, typically costs over $1 billion.
“There is a gap,” said Lewis. “But these companies have the funding available. They have the money to make these decisions, they’re just choosing not to.”
Incentives for change
The IRA incentives tapped by Cleveland Cliffs are no longer available, but this summer California U.S. Rep. Ro Khanna introduced the Modern Steel Act, which would provide $10 billion in low-cost loans and grants, plus tax breaks and other incentives for new and revamped low-emissions steel mills, including hydrogen-fueled DRI.
Separately, lucrative tax credits soon to be available for “clean hydrogen” under the IRA could also make hydrogen-powered steel more financially viable. The specific rules for the tax credit — known as 45V — are still being finalized, amid controversy over what should qualify a project’s hydrogen as “clean.”
“There are a number of different incentives in the IRA that can help steel companies build out their own green hydrogen infrastructure,” Lewis said. “Everything should be on the table. Steel companies would be such huge off-takers for green hydrogen, they can build their own economy here.”
At the BP Whiting oil refinery, 10 miles from Gary Works, there are plans underway for production of blue hydrogen, or hydrogen made with natural gas followed by capture and sequestration of the emissions. The plan is a marquee part of the Midwest (MachH2) hydrogen hub, one of seven planned hubs nationwide slated to receive $7 billion total in federal funding. Such blue hydrogen could be used to power a steel mill, with theoretically no resulting greenhouse gas or public health-harming emissions.
However, local environmental and public accountability leaders are strongly opposed to blue hydrogen production in the region, since carbon sequestration has not yet been done successfully on a large scale in the U.S., and it would entail pipelines carrying carbon dioxide from the refinery to a sequestration site.
“The carbon capture component makes us very nervous, it seems to me they’re rushing into this without really taking the time to study it more seriously,” said Northwest Indiana resident Connie Wachala, another graduate of the sustainable steel program. “That might be because of all the money DOE is making available to industry. I wish our elected and industry officials would start thinking more creatively about how to make [green hydrogen] happen, how to make things better for the people in the neighborhoods and around the steel mills as well as for the shareholders.”
A different future
All four of Wachala’s grandparents came from Poland to work in the steel mills.
“Growing up in the 1950s, I remember my mom hanging the laundry up in the yard on a clothes line. If the wind was blowing a certain way, you’d get black particles on the clothes,” remembered Wachala, who worked as a creative writing teacher before retiring. “My dad’s car was always covered with that soot.”
Booker’s mother worked as a crane operator at the now-closed Bethlehem Steel mill in Burns Harbor, Indiana — among the first wave of women of color to be hired.
“I was proud she worked in the mill and took care of us, but I did not want [that job] whatsoever, seeing her come home every night after the swing shift, with the big old boots and jacket,” said Booker. “I wanted to go to college. It was a source of contention with my mom and I for some years.”
That was in the days when locals largely believed, “if you want a good partner, you’ve got to get one that works in the mill,” she continued. “It was like a prestigious job and position. People looked up to people who worked in the mill.”
Now, Booker laments, “Gary is like a joke,” scorned for its economic decline since the steel industry automated and shrunk — hemorrhaging jobs, and for the pollution that is still emitted. If the merger with Nippon does not go through, it’s widely believed U.S. Steel would eventually close the mill, as it closed its South Works plant in Southeast Chicago decades ago. At their height, the South Works and Gary Works plants together employed about 40,000 people in the Chicago area.
Thomas wrote a frustrated rebuttal to the Chicago Tribune editorial board opining that the Nippon merger was crucial to Gary’s future. She and other local leaders say they don’t want the mill to close, but they can demand better than the extension of heavily polluting industry.
“It’s just perpetuation of this as a sacrifice zone,” said Thomas. “‘This is what you’ve always been, this is how we’re going to keep you.’ But that’s not going to fly anymore.”
The one thing Kamala Harris and Donald Trump seem to agree on is that the road to the White House runs through Pennsylvania, the nation’s most populous swing state.
October polls show an even split in the Keystone State, and its 19 Electoral College votes could well decide the election. Not a week went by in September without one or more visits from each campaign. And Pennsylvania is where Harris and Trump met face-to-face for their first and only debate, during which both candidates vied to convince Americans that they can deliver more prosperity. Harris wants to grow the economy in part by continuing the clean energy manufacturing policies enacted by the Biden administration; Trump wants to roll them back.
Given the immense electoral stakes, I decided to visit the state to see if the idea of a clean energy future is resonating with Pennsylvanians and how that transition is starting to materialize in a place where coal, oil, and gas have reigned supreme since the 1800s.
Pennsylvania’s coal abundance jump-started the transition away from burning wood as a primary energy source. Coal later made the state the steelmaking capital of America and powered the nation for decades. Meanwhile, oil production surged beginning in 1859, when Edwin Drake tapped the country’s first oil well at Titusville, and the state led U.S. oil production through the end of that century.
More recently, when engineers commercialized fracking in the 2000s, the Marcellus Shale, which stretches under Pennsylvania, quickly became the biggest shale-gas-producing region in the nation.
Now, though, Pennsylvania is at a crossroads: The resources that fueled Pennsylvania’s past growth are plateauing or petering out.
“Coal employment has gone off a cliff,” said Seth Blumsack, who runs the Center for Energy Law and Policy at Penn State. “You had an influx of natural gas jobs — that growth has largely leveled off, as Pennsylvania hit this kind of steady state of gas production.”
This isn’t the first time Pennsylvania’s core economic drivers have waned. Factories and steel mills took a beating in the 1970s and 1980s, as foreign producers competed in earnest with America’s industrial machine. Plants that sustained whole towns closed down, with nothing to replace them. The ironworks Andrew Carnegie built in 1875 still operates on the bank of the Monongahela River, but owner U.S. Steel is desperately trying to unload it to Japan’s Nippon Steel.
These conditions have created new opportunities for the clean energy transition to take hold. Political leaders like Democratic Gov. Josh Shapiro and business owners are embracing low-carbon industry as an economic development strategy for the energy-rich state.
Shapiro has pushed to strengthen the state’s outdated clean energy standard for power production, and he signed a bill this summer to establish ground rules for developing carbon-sequestration projects. His administration recently won $400 million in federal funding from the U.S. Environmental Protection Agency (“the second-largest federal grant in Pennsylvania’s history,” a spokesperson for the governor pointed out). Pennsylvania will disburse that money in competitive grants to industrial entities proportional to their ambitions at carbon reduction; the Shapiro administration wants the ensuing projects to slash statewide industrial emissions 10 percent by 2050.
Given the state’s long history of oil and gas, hydrogen production is sure to loom large. In the lower-carbon future, clean hydrogen could become the next key energy commodity. Last year, Biden’s Department of Energy awarded seven proposed hydrogen hubs around the country roughly $1 billion each. Pennsylvania, as Shapiro regularly points out, was the only state to win funding for two: The Philadelphia-based hub is slated to produce hydrogen with nuclear power and renewables, while the Pittsburgh-based hub will focus on turning fossil gas into hydrogen and stowing the ensuing emissions underground.
But Pennsylvania’s industrial decarbonization is just getting started.
“You’re not seeing the finished product, but so many things are falling into place,” said John Carlson, who oversees state policy engagement in the region for Clean Air Task Force, a climate-solutions think tank.
Clean energy manufacturing, though, is already beginning to put Pennsylvanians to work. A few entrepreneurs have retooled historic Pittsburgh-area factories to turn iron and zinc into batteries that store power from the sun and wind. Steelworkers forge the backbone that holds phalanxes of solar panels, bolstering America’s fastest-growing source of electricity.
Pennsylvania has fallen behind other states in building clean power plants, but renewables developers are getting more ambitious. In Clearfield County, northeast of Pittsburgh, developer Swift Current Energy is building the biggest solar plant in the commonwealth on 2,700 acres of reclaimed mine land.
“There’s this huge industrial knowledge base in Pennsylvania,” Blumsack said, “and people who want to work, and so how do you harness that?”
From coal and gas to hydrogen
The Marcellus Shale arcs from southwest to northeast Pennsylvania, undergirding the state physically and economically.
Other states talk of phasing out fossil fuel extraction to tackle their planet-warming emissions. In Pennsylvania, Shapiro, working with split control of the legislature in Harrisburg, speaks pragmatically of harnessing the state’s mineral wealth for the goal of decarbonization. In her Pennsylvania debate appearance, Vice President Harris renounced her earlier opposition to fracking: “Let’s talk about fracking, because we’re here in Pennsylvania. I made that very clear in 2020. I will not ban fracking.” Such is the gravitational pull of the Marcellus.
But talking about pumping fossil fuels while decarbonizing is much easier than doing it. So I ventured through the corduroy-like ridges of the Appalachian foothills to a place where people are working to make it happen: Penn State, formed as an agricultural school in 1855 and now home to nearly 50,000 students in a bucolic town aptly named State College.
Sanjay Srinivasan greeted me outside the beige concrete structure that houses the Energy Institute, where the College of Earth and Mineral Sciences conducts research to unlock lower-carbon opportunities for the state.
I did a double take as we approached the building — the sign on the exterior wall said “Coal Utilization Laboratory,” a relic of the not-so-distant past. In the lobby, we passed displays of actual coal in all its dark glory: an uninterrupted column of bituminous stretching to the ceiling, a pyramidal sampler of anthracite designated by colloquial gradations like Egg, Chestnut, Pea, and the fine little pebbles of No. 3 Buckwheat.
“We are interested in doing anything that we can to help communities in the Pennsylvania Appalachian region transition to the new energy economy,” Srinivasan told me.
Penn State’s Coal Utilization Laboratory has transformed into a research hub for ways to repurpose the state’s fossil fuel resources into lower-carbon energy. (Julian Spector/Canary Media)
The institute approaches that task by looking for existing energy infrastructure it can repurpose. That means researching ways to extract critical minerals from the region’s mining waste ponds and fly ash piles, or tap hot briny water in abandoned mines as a heat source for buildings. And, thanks to the billion-dollar hub grant from the DOE, western Pennsylvania could turn its fossil fuels into hydrogen to clean up heavy vehicles and industry.
“In this part of the world, the formations can be used for storing hydrogen. But better still, can we use the shale gas for producing hydrogen and then develop a closed-loop process where you don’t emit anything into the atmosphere?” Srinivasan posited.
Almost all hydrogen made today comes from blasting methane with steam at high pressure, which yields hydrogen gas and carbon dioxide. The machines that do this, called steam methane reformers, historically just vent the CO2 into the atmosphere. U.S. hydrogen production is highly concentrated in the Gulf Coast petrochemical corridor, where refineries use the gas in their production process.
The Appalachian hub is planning to fund efforts, like the KeyState project in Clinton County, to make hydrogen this old-fashioned way but then inject the CO2 stream underground for geological storage. The DOE concluded negotiations with this hub in July, kicking off the active planning phase, which could last for three years.
The Gulf Coast has successfully sequestered carbon that oil companies pumped underground to push out more oil. In Pennsylvania, operators and researchers have yet to prove this is commercially feasible. The plan, Srinivasan told me, is to drill down 8,000 to 10,000 feet, through the Marcellus Shale, through the Geneseo Shale, to the Oriskany Sandstone. The shale formations above would act as a cap on the carbon dioxide. The National Science Foundation recently funded Penn State to study the Appalachian Basin’s carbon-sequestration potential.
Many climate advocates doubt that hydrogen production from fossil fuels will ever be particularly clean. That said, hydrogen producers elsewhere have proved that they can achieve high rates of carbon capture at steam methane reformers, noted Sam Bailey, industrial decarbonization manager at Clean Air Task Force. Pennsylvania operators would also need to secure low-carbon electricity to run their operations, and buy methane from a supply chain that isn’t leaky.
“Some producers in the region have some of the lowest leak rates, but those obviously have to be verifiable and transparent,” Bailey said.
The mid-Atlantic hydrogen hub, centered around Philadelphia, would focus on electrolysis powered by offshore wind and nuclear power. The Shapiro administration expects both hubs to create 41,000 jobs, though the DOE estimates the hubs will take eight to 12 years to fully materialize.
There might be other pathways for turning fossil gas into clean hydrogen. Down the hallway, Srinivasan’s colleague showed me a tabletop device that performs what’s called thermocatalytic decomposition: The machine essentially cooks methane at low temperatures until it lets out pure hydrogen and inert, solid carbon. That would be much simpler than catching and injecting gaseous carbon deep underground.
This machine at Penn State breaks down methane under low heat to yield hydrogen and solid carbons. If the emerging technology gains traction, it could process gas leaking out of old mines. (Julian Spector/Canary Media)
The tabletop version I saw is still “frontier technology,” Srinivasan cautioned, made possible by recent advances in catalyst efficiency. But it could be a good fit for smaller installations to catch methane leaking out of Pennsylvania’s many abandoned coal mines. Modular decomposers could convert those decentralized streams of intensely planet-warming gas into harmless carbon solids that can be used as industrial feedstocks.
Pittsburgh steel goes solar
The town of Leetsdale hugs the Ohio River north of Pittsburgh, surrounded by sprawling industrial complexes and freight lines. During World War II, Bethlehem Steel fashioned barges and landing craft there. Historians describe that war as a clash of steel that the U.S. won because its factories cranked out more tanks, planes, and ships than its opponents.
Most of those factories are long gone, but JM Steel, an affiliate of the century-old company Jennmar, took over a site in Leetsdale one year ago and reopened it with a new mission: bending steel to the will of the burgeoning solar industry. Its preliminary success shows how federal clean energy policy is breathing new life into Pennsylvania’s legacy industries — exactly what the hydrogen hubs are supposed to do.
When I rolled up to the riverside lot, the factory looked like it was fortified for some kind of invasion. Thirty-foot steel tubes had been trussed up by the dozen and stacked to form an impenetrable barricade taller than a person.
Pittsburgh native Chris Bartley led me through the steely labyrinth, explaining that these pipes were torque tubes ready to ship. His employer, Nextracker, uses the tubes to mount huge numbers of solar panels that can change their angle throughout the day.
Early in the solar revolution, developers installed panels in fixed positions, at what seemed like the most advantageous angle. Silicon Valley startup Nextracker revolutionized the market by attaching panels to trackers that follow the sun’s arc, and pivot away from dangers like hail or high wind. This innovation enhanced solar power output and made Nextracker one of cleantech’s clearest commercial successes: It went public in 2023 and now trades with a market cap over $5 billion. To supply its booming business, Nextracker enlists specialists like JM Steel to sculpt metal to its specifications.
Chris Bartley stands before stacks of Pittsburgh-made torque tubes, which his company Nextracker sells to large-scale solar projects so the panels can track the sun. (Julian Spector/Canary Media)
In a little meeting room off the factory floor, Negley Rodgers, who oversees plant operations for family-owned JM Steel, told me the plant ships an average of six truckloads of torque tubes per day — 350,000 torque tubes since last October. They go straight to solar plants in the region, where the tons of steel translate to megawatts of cheap, clean power rushing onto the grid.
We donned hard hats, earplugs, and orange scratch-resistant sleeves for my exposed forearms, then walked into the cavernous factory. First we saw the “master coils” of rolled-up flat steel that the company buys from domestic producers like Nucor and SDI. The coils don’t look overwhelmingly large, but are so heavy that flatbed trucks can carry only one at a time, Rodgers noted. The high-ceilinged factory has a built-in crane capable of lifting 40 tons to maneuver the coils into position.
Workers feed these coils into machines that use heat and immense force to roll the flat material into thick round pipes. Another station drills the holes that will attach the solar panels. JM adjusts the drilling arrangement for each project — some use bigger panels, some smaller, but the company can accommodate them all on the same production line.
Before Covid-19, Nextracker relied on a more typical globalized supply chain. Then CEO Dan Shugar decided to localize tracker production to where his customers operated around the world: Solar plants would get trackers made nearby, so nothing got stuck in port overseas. A couple of years later, the IRA sweetened the deal with meaningful financial incentives to produce solar-power components domestically.
The Inflation Reduction Act created an 87-cent-per-kilogram tax credit for torque tube manufacturing. Additionally, solar developers can access an extra 10 percent tax credit for their power plants by hitting a critical mass of domestic components, per an IRS rubric. Trackers include torque tubes, rails, controllers, and motors, Bartley explained; sourcing all those components in the U.S. unlocks a bonus, which nets 24.7 percent coverage for the overall solar project.
JM Steel uses heat and force to turn coils of flat, rolled steel into torque tubes capable of holding up solar panels in inclement weather. (Julian Spector/Canary Media)
The exact level of domestic content varies by project, based on what a developer is looking for. A U.S.-made tracker creates flexibility for how the company sources other components while still meeting the IRS cutoff.
Conventional corporate wisdom long held that offshoring production to China cut costs and improved profits. Sourcing a 100 percent domestic tracker still adds a premium, Bartley said, but it’s already possible to make most of the system here without driving up cost.
“Looking at our cost of a tracker fully delivered to a job site, we’re seeing really competitive costs and pricing [while] making a significant part of the tracker domestically,” he said. “As time goes on, we’re expecting any sort of premium like that to go down, because we’re expanding capacity of these other components, like our electronic components.”
Part of that favorable comparison to foreign imports has to do with the inescapable heft of this product: “They’re not shipping nuts and bolts that they can pack into a tight box on a ship,” said Rodgers. “They’re shipping these large, 30-foot-long, five-inch diameter tubes that take up a massive amount of volume on a ship.”
Steel companies have opened 20 factory sites across the U.S. that exclusively produce torque tubes for Nextracker; the factories wouldn’t exist without the demand from the booming solar market. JM ships from Pittsburgh to places like Indiana, Illinois, and Tennessee, but business in Pennsylvania has been picking up, as evidenced by the blockbuster Mineral Basin Solar project. That one will put 400 megawatts on reclaimed mining land northeast of Pittsburgh. The power and its clean energy credits will actually flow to New York, but millions of dollars of lease payments and tax revenues will stay in the county.
For JM Steel, the imperative to decarbonize has given new urgency to the skills and products that Pittsburgh long excelled at. At the same time, U.S. Steel is trying to unload its flagship Pittsburgh steel plant to a Japanese company, arguing that it’s the only way to remain commercially viable. I asked Rodgers if that deal signaled the end of an era for American steelmakers.
“I can’t comment on that,” he said, referring to U.S. Steel’s position. “Just — manufacturing is still viable, and it’s still happening in the United States.”
Indeed, the growing pressure on big steel buyers to source lower-carbon or “green” steel could give U.S. companies an edge on overseas competition. The U.S. already uses a high proportion of electric arc furnaces to melt scrap metal into new products; those can run on clean electricity to further curb their carbon footprint. The industry is also exploring ways to decarbonize the carbon-intensive conversion of iron ores to metallic iron, by using clean hydrogen instead of coal. Pennsylvania doesn’t have any of those facilities operating yet — the world’s first large-scale commercial plant of this kind is under construction in Sweden. But the hubs aim to bring clean hydrogen supply to greater Pittsburgh, and the DOE has funded steel companies to build initial facilities to use it.
For now, JM Steel’s plant serves Nextracker’s needs with some 53 employees — a welcome addition, but not close to the scale of employment at the site in bygone decades. For clean energy buyers or green steel customers to make a mark on the regional economy, they’ll need to put many more people to work.
Reopening factories for battery breakthroughs
Solar panels planted on Pittsburgh steel clean up the grid during sunny hours. But as solar generation provides ever more electricity, new energy storage technologies will be needed to turn cheap renewables into round-the-clock power.
Federal policymakers hope to bring battery manufacturing back to the U.S. after China pulled far ahead in its capacity to make lithium-ion batteries. It’s extremely difficult to catch up to competitors who are already producing at tremendous scale — the recent financial struggles at Europe’s Northvolt attest to that. Pittsburgh, though, has become a hub for fabricating novel battery technologies that aren’t made anywhere else in the world, a risky strategy with the potential for a big payoff.
Habitually cash-strapped startup Eos makes zinc-based batteries at the junction of Turtle Creek and the Monongahela. For decades, Westinghouse built electrical generators on the site that powered the Hoover Dam and other icons of modern America. Nikola Tesla once toiled there, as did more than 20,000 workers in the plant’s heyday. But Westinghouse shuttered the Turtle Creek plant in 1988, gutting the economy of the surrounding Mon Valley.
Now Eos employs 300 people to manufacture energy storage in 150,000 square feet of the old Westinghouse complex. If the unconventional product takes off, Eos could expand and further boost the local economy — but that’s a big if.
The Westinghouse facility in Turtle Creek used to employ 20,000 people to make electrical generating equipment. It closed in the 1980s, but has recently opened up to growing businesses like Eos. (Julian Spector/Canary Media)
Eos has toiled, since 2008, to commercialize a new type of battery that could beat lithium-ion on fire safety and cost for longer-duration energy storage. Lithium-ion batteries almost always win customers looking to deliver stored power for four hours, and increasingly five or six. Beyond that, lithium-ion gets prohibitively expensive. Eos markets its batteries as capable of delivering power for three to 12 hours, which runs the gamut from the incumbent technology’s sweet spot to a storage duration that few customers have ever purchased.
That’s a tough market to break into, and Eos survived its first decade with little commercial traction to show for it. In 2019, the board brought in a new management team, a crew of GE veterans, led by CEO Joe Mastrangelo. He stopped outsourcing fabrication to contractors in China and localized production in Pittsburgh.
I met Mastrangelo in a conference room above the factory. He wore thick-framed glasses and a company hoodie, lime-green logo on forest green. The outfit reminded me of Pennsylvania Sen. John Fetterman (D), who famously bucked tradition and wore hoodies in the halls of power. Mastrangelo pointed out that Fetterman lived a mile down the street in Braddock, where he used to be mayor, in a house overlooking the U.S. Steel plant.
Reshoring the supply chain surely saved Eos during Covid-19, Mastrangelo explained. If production had frozen for a couple of years when China closed its factories, “we would have been done.” Eos also avoided under-discussed costs of offshoring, like lengthy, expensive flights to China to check on manufacturing progress. Eos built the factory with its own money — a rare feat in the incentive-happy cleantech factory boom — but found itself ready to capitalize on the domestic manufacturing incentives created by the 2022 Inflation Reduction Act.
Downstairs, I saw the fully automated line that Eos installed in June, capable of producing 1.2 gigawatt-hours per year. The machinery sat inside a wire-fenced perimeter. A succession of robots picked up gray plastic boxes, stocked them with Eos’ proprietary electrodes, then injected them with a liquid electrolyte in two carefully calibrated gushes, to prevent it from foaming and spilling.
Eos installed a fully automated line this summer to mass-produce its unusual zinc batteries. Inside the perimeter, only machines operate — unless they need a little human assistance. (Julian Spector/Canary Media)
Eos employees patrolled the perimeter, many of them wearing the same green-on-green hoodie as their CEO. Their job was to keep the machines running: When a robot got confused, or the operating controls hit a glitch, alarms sounded and the technicians hurried over. This happened throughout my tour; as I’d seen in other cleantech factories, “full automation” is more aspirational than descriptive.
The bustling factory embodies the theory that Pennsylvania’s abandoned factories can spring to life to serve the material needs of the clean energy revolution. Pennsylvania’s minimum wage is $7.25 an hour, but Eos’ average wage is above $20, Mastrangelo said. Employees get a 3 percent direct contribution to their 401(k), and regular grants of company stock (Eos went public in 2020 via a special-purpose acquisition company). “We also view this as a massive opportunity for everybody to get wealth creation,” Mastrangelo said.
But startups are unsteady vessels for economic growth, and Eos’ finances are more unstable than most.
Last year, Eos spent $169 million to make $16.4 million in revenue. It’s normal for a startup to lose money while ramping up commercial production. But Eos’ public listing failed to net enough money to fully fund the buildout, so it has repeatedly beseeched investors for more infusions (like $100 million from Koch in 2021). This summer, Nasdaq nearly booted Eos for trading below $1 a share for too long.
Mastrangelo escaped that ignominy by closing a $325 million commitment from a domestic supply chain–focused fund at private equity firm Cerberus, on June 24, in the form of a loan with stock warrants (and surely one or two strings attached). Since then, Eos’ share price soared all the way past $3.
With this private-equity lifeline in hand, Mastrangelo has faith that demand for his unusual batteries will pick up. Eos is commissioning a 35-megawatt-hour storage system serving a microgrid on a Native American reservation in Northern California, funded by a California Energy Commission grant for long-duration storage. That customer already signed up for an expansion to 60 megawatt-hours. Eos also delivered a 10-megawatt/4-megawatt-hour standalone system in Texas for Pittsburgh-based developer IEP. These are small potatoes compared with lithium-ion battery projects, but substantial for the ragtag category of erstwhile lithium alternatives.
Once the gray, boxy battery cells are produced, workers install them in containers to ship to customers. (Julian Spector/Canary Media)
“The one thing we’ve always told everybody is, the market needs a product like ours,” Mastrangelo said. “We continue to do things that haven’t been done before, and we just have to keep executing on our plan, and eventually the market will reward performance.”
An even more unusual battery is being fabricated about 36 miles west of downtown Pittsburgh. This one, designed by Form Energy, uses iron as a cheap storage material and promises to deliver clean power for up to 100 hours, far beyond what lithium-ion batteries can handle affordably. Unlike Eos, Form had no trouble lining up venture capital investment and hundreds of millions of state and federal dollars to fund its buildout; in fact, the company just closed another $405 million equity investment on October 9.
Form took barely a year to transform the slag-studded field of an abandoned steel mill into a gleaming new factory. Its white outer wall rises like a curtain to reveal a transparent entranceway, highlighted in the company’s trademark orange. Inside, an airy vestibule lined with greenery and an exhibit on the town’s industrial history gives way to the 550,000-square-foot production zone.
“We wanted it to be an inviting place,” CEO Mateo Jaramillo told me from a glass room on the mezzanine level, suspended above the factory floor. “It should feel like innovation. It should feel like something new. It should feel like a safe, clean place to work.”
Form developed its technology at labs near Berkeley and MIT, then expanded to a facility in the tiny town of Eighty Four, outside Pittsburgh. The company doubled down on the region for its full-fledged factory, and landed several hundred million dollars in state incentives from West Virginia to locate in that state, in the former steel town of Weirton. Pittsburgh is the closest big city to Weirton, and many of the workers commute from Pennsylvania. The success of this factory, like JM Steel or Eos, speaks to Appalachia’s ability to seize the clean energy era for its economic revival.
Form CEO and co-founder Mateo Jaramillo inspects a finished iron-air battery cell at his company’s newly built factory west of Pittsburgh. (Julian Spector/Canary Media)
Form chose a factory site rich in symbolic resonance: The startup is claiming a spot in the industrial landscape of the Ohio River Valley, creating jobs where the legacy industries seem capable only of shedding them (steel giant Cleveland-Cliffs was clinging on next door, but idled that operation in April; the company hopes to reopen the site to make electrical transformers starting in 2026). Form even uses iron, the same material that, with coal, fueled the region’s steel boom.
These layers of narrative meaning play swimmingly at ribbon cuttings, but I was curious what they offer once the tax incentives are secured. Jaramillo acknowledged that “grand poetry” isn’t what makes batteries.
“On the day-to-day, we don’t think a lot about the precise industrial legacy — we’ve got a job to do, so we go do the job,” Jaramillo said. “That’s probably the most direct legacy, is people who are really oriented on taking care of the job.”
Form has seen “huge demand” for open positions, and Jaramillo reported no problems finding the quality and number of workers needed. The company promised the state of West Virginia that salaries will average at least $63,000 per year — well above minimum wage, and substantial in a region with low costs of living.
So far, Form runs a single shift per day, for 10 or 12 hours. Some 300 people work at the factory, but that should grow to 750 in a few years, Jaramillo said. The plan is to quintuple capacity from 2025 to 2026, and quadruple it again from 2026 to 2027, at which point the factory will make 500 megawatts per year; for the long-duration format, that translates to 50,000 megawatt-hours.
The Pittsburgh metro area scores quite high for its capability to manufacture a range of clean energy technologies, per economic development analysis by climate think tank RMI.
Eos and Form were the first major battery makers to turn that potential into real jobs. Neither technology has been deployed on the grid in sufficient scale to ensure its longevity as a climate solution; that work lies ahead of them. But they demonstrate that it’s possible for the decarbonization mission to reanimate long-abandoned factories and put Pennsylvania’s workers back on the line.
Over two centuries, Pennsylvania’s energy resources brought clear gains in jobs and wealth. The nascent industrial decarbonization transition needs many more years of dedicated federal and local support before it can credibly substitute for the legacy energy economy. That’s not a convenient timetable for Democrats trying to make the case now for a Harris administration, and yet the outcome of the election will have an enormous impact on whether that support continues.
Correction: An earlier version of this story did not include that the advocacy groups’ modeling included one new natural gas plant. The story has been updated.
Xcel Energy’s latest long-range plan for meeting electricity demand in Minnesota includes six new natural gas peaker plants that critics warn could be obsolete before customers are done paying for them.
Comments filed last month by clean energy advocates and the state attorney general’s office push back on the utility’s plan to build a fleet of small fossil fuel plants as it otherwise ramps up clean energy investments. The facilities would operate sparingly, just a few hours at a time on days when the grid is strained and wind, solar and other clean power can’t keep up with demand.
More economical options exist, though, according to a coalition of clean energy groups that hired experts to model alternatives. The study commissioned by the groups concluded Xcel could save ratepayers as much as $3.5 billion by opting for a single new gas plant, and relying more on existing plants, energy storage, efficiency and demand response, and buying surplus power on the regional power grid.
The clean energy groups include Fresh Energy, which publishes the Energy News Network (Fresh Energy’s leadership and policy staff do not have access to ENN’s editorial process.)
The debate is over the utility’s latest integrated resource plan — the first submitted to state regulators since Minnesota Gov. Tim Walz signed legislation last year requiring electric utilities to use 100% clean energy by 2040. Xcel Energy supported the legislation and has proposed various scenarios for achieving the target, but disagreements remain among stakeholders about how to get there, particularly when it comes to cost and equity issues.
Different approaches to modeling
Allen Gleckner, executive lead for policy and programs at Fresh Energy, said Xcel’s gas plant proposal is similar to one in its last integrated resource plan that asked regulators to approve two new peaker plants that would provide as much as 800 megawatts of electricity. Xcel eventually agreed to an open, fuel-neutral bidding process allowing clean energy companies to propose alternatives. That process is still underway, with an administrative law judge expected to make recommendations.
The clean energy groups’ consultants used the same software program as Xcel to arrive at a plan to add a new 374 megawatt gas plant, 3,800-4,800 megawatts of wind, 400 megawatts of solar, and 800 to 1,200 megawatts of energy storage resources by 2030. Extending contracts at existing peaker plants could add 970 megawatts, and energy conservation initiatives could reduce use during high demand times.
Gleckner said Xcel has taken an exceptionally conservative approach by mostly creating scenarios that did not consider electricity being available from neighboring systems or the MISO regional transmission grid. Gleckner said Xcel does not and has never operated as an island, with MISO delivering power to its customers through a shared resource pool.
“Xcel is using a sort of fiction of modeling because the reality is we’re part of a regional grid,” he said.
The result is a plan to “build a bunch of new resources that we know are either not compatible with our state laws or are going to be costly and likely to retire early,” he said.
Amelia Vohs, climate program director for the Minnesota Center for Environmental Advocacy, praised Xcel for not asking regulators to extend the life of existing fossil plants, unlike its counterparts in other states. Unlike previous long-range plans, Xcel’s latest imagines a future in which large gas and coal power plants are not the backbone of the system.
What that grid will look like remains challenging, Vohs said. Adding to the challenge is rising power demand from data centers, manufacturing, and the electrification of buildings and transportation. Even so, Vohs believes clean energy is ready for a leading role.
“It’s a much better solution that’s flexible in this time of uncertainty without making this big commitment to gas resources for the next 40 years,” Vohs said.
Patty O’Keefe, senior field strategist for the Minnesota Sierra Club, said proposed combustion turbine peaker plants pose “significant environmental and public health risks” because they potentially emit more carbon and nitrous oxide than larger, more common combined cycle gas plants. They also tend to be built in communities already suffering higher pollution levels.
The Sierra Club would like Xcel to focus more on energy efficiency than electricity generation in its planning. Efficiency reduces demand and makes “the transition to clean energy smoother and more cost-effective,” O’Keefe said.
Managing risk
Meanwhile, the office of Minnesota Attorney General Keith Ellison has also weighed in, warning that investments made now may become obsolete “stranded assets,” meaning the plants may become uneconomical or forced to retire before they have delivered projected benefits to customers.
Xcel has acknowledged the risk of stranded assets generally in Securities and Exchange Commission filings, though not specifically in relation to its proposed gas peaker plants.
Utilities are incentivized to build power generation because investors earn a return on capital investment. The attorney general argues that if plants become obsolete or transition to other forms of energy, such as hydrogen, Xcel ratepayers should not have to pay for retrofits and other investments it might have to make to reduce emissions.
In its filings to state regulators, Xcel said it is concerned about having enough firm dispatchable power to meet rising demand quickly during certain times of the day. By 2030, the company will have ended its use of coal for energy generation after closing four coal-burning facilities this decade. The proposal suggests Xcel may need to add even more peaker plants between 2030 and 2040.
Xcel spokesperson Kevin Coss said the company will be “adding a significant amount of wind and solar power to our energy mix” and complementing that generation “with always-available generation — power we can supply any time it’s needed — to reinforce the reliability of the grid.”
Coss said Xcel identifies generation sources in a technology-neutral way so it can decide not to use natural gas combustion plants in the future. The current integrated resource plan calls for fewer firm dispatchable resources than the 2019 version, he said.
The conservative modeling “avoids overreliance on the energy market, which could expose our customers to excessive risk,” Coss said.
Residents, businesses and organizations have until Oct. 4 to send comments on the integrated resource plan to the Public Utilities Commission. The commission is expected to make a decision on the plan in February 2025.
Indiana ratepayers spend hundreds of millions of dollars per year for power from coal plants that are operating despite the availability of cheaper sources, including wind and solar.
The state is emblematic of a larger problem, as electricity market rules typically allow utility-owned power plants to essentially cut in line even when they are not the most economical option for customers.
A recent report commissioned by the Natural Resources Defense Council examined how this phenomenon plays out in the Midcontinent Independent System Operator (MISO) regional transmission organization specifically, building on previous research by RMI, the Union of Concerned Scientists and others — all of which show that uneconomic coal plant dispatch takes a huge toll on ratepayer wallets and public health.
The problem happens primarily with vertically integrated utilities or municipal utilities and cooperatives, which can recoup costs of fuel and operations from ratepayers even if they are operating at a loss. In most of MISO territory, energy markets have not been restructured as open markets, making such cost recapture the norm.
The NRDC study showed that Indiana ratepayers bore the second-highest burden in MISO, paying $338 million for uneconomic coal power from 2021-2023, just behind Louisiana’s $341 million. North Dakota ratepayers spent an extra $120 million, Wisconsin $69 million, and Minnesota $54 million, the study found.
Indiana’s R.M. Schahfer plant, run by utility NIPSCO, cost ratepayers more than $100 million in such uneconomical dispatch from 2021-2023, the NRDC study found.
In an ongoing rate case, Duke Energy is seeking to increase reliance on its Gibson and Cayuga plants in Indiana. These plants were responsible for $29 million and $7.6 million in uneconomic dispatch costs to consumers in 2023, according to RMI’s economic dispatch dashboard.
“This has been a problem plaguing Indiana coal plants for many years, it’s costing our consumers in Indiana millions of dollars and it’s one of the factors driving rates higher and driving clean energy off the grid,” said Ben Inskeep, program director for Citizens Action Coalition in Indiana. “It’s a tale of utilities making bad decisions as part of their profit motive and then utility regulators failing to hold them accountable as they’re supposed to. Certainly utilities should be operating their plants efficiently and economically, and when they fail to do so, they shouldn’t be getting cost recovery.”
Duke spokesperson Angeline Protogere said the study misses important context.
“There are a lot of considerations that go into plant dispatch decisions, and the priority is always reliability of service and economics,” Protogere said. “We weren’t able to replicate the NRDC data, but it appears it’s based on incomplete information. For example, there are times when MISO calls on a unit because of grid reliability needs. There’s a bigger picture that’s not reflected here.”
Skewed markets
The NRDC study found that over three years across MISO, about 400 MW of wind power was curtailed in favor of power from coal plants generating at higher-than-market costs.
Power producers bid into regional energy reverse-auctions for real-time and next-day power, offering the price for which they can produce their electricity. Grid operators like MISO and PJM are supposed to dispatch the power starting with the most affordable option, until demand is met.
Even if vertically integrated utilities are not selling their power on the open market but rather serving their own customers, they still need to be dispatched by the grid operator to send their energy onto the grid.
But under the rules for MISO and other grid operators, coal plants can “self-commit” to run for a given time period even if they cannot produce power below the market rate. The idea is that coal plants can’t ramp up or down quickly, so they may need to keep running at a certain level to be ready to provide more power when needed.
If this relatively expensive coal power weren’t on the grid, more wind power would be purchased and demand for new renewables would likely be created.
“That increment of power would be filled through the market selecting the next highest bidder,” providing “an accurate picture of what electricity should cost that gives a signal that incentivizes newer generation,” explained James Gignac, Union of Concerned Scientists Midwest senior policy manager.
The lower the energy prices at a given time and the lower the demand, the worse the coal plant dispatch problem gets. Data from RMI and a 2020 report by the Union of Concerned Scientists shows that ratepayer losses due to uneconomic coal dispatch were lower in 2022, because Russia’s invasion of Ukraine caused natural gas prices to spike, making coal more competitive by comparison. Conversely, when energy demand plummeted in 2020 because of the pandemic, uneconomic dispatch of coal plants soared.
Since 2015, the uneconomic dispatch of coal plants has cost Indiana ratepayers $1.9 billion and ratepayers nationwide $20 billion, according to RMI’s dashboard.
The issue has real impacts on the growth of renewables, experts note. If the practice was prevented, market prices would be higher and there would be more incentive for renewable developers to build projects to sell their power on the open market. Meanwhile if vertically-integrated utilities were not allowed to recoup their costs for uneconomic dispatch, they would be motivated not to run coal plants and might decide to invest in building renewables instead, or at least buy wind power on the open market.
“I’ve talked with [wind] developers who say they look at where coal plants self-commit uneconomically, and they avoid those transmission lines because they know they will be curtailed,” said Joseph Daniel, principal in RMI’s Carbon Free Electricity team and lead author of the Union of Concerned Scientists report.
That report shows that if uneconomic coal dispatch was avoided, Indiana customers would save money — but not as much money as ratepayers in other states, because there is less wind power available around Indiana. Over time, a market unfettered by uneconomic coal plants might correct this situation.
“The greatest immediate savings for customers from stopping uneconomic coal plant operations are in areas where there are existing low-cost resources such as wind power being curtailed by that behavior,” said Gignac. “If the replacement for the uneconomic coal generation is something like a relatively higher-cost gas plant, then the market clearing price is higher and customer savings are not as significant. However, that higher clearing price is a signal and an incentive for low-cost renewables to locate projects in that area and deliver further cost savings.
“Removing the market distortion of uneconomic coal operations helps move us toward the cleaner, lower-cost energy system we need.”
Solutions
Studies show that coal plants that sell their power on the open market – known as “merchant” plants – rarely decide to operate when they are not getting market prices at least equal to their cost of operating – the way vertically-integrated or publicly-owned coal plants do when they know they can recoup their costs from ratepayers, without compensation from the market. In other words, merchant plants do not ask grid operators to be uneconomically dispatched.
These merchant plants nonetheless seem to ramp up in time to operate when their power is needed, experts note, indicating that vertically-integrated plant operators in MISO are understating their ability to ramp up and down quickly, as noted by NRDC policy analyst Dana Ammann and other experts.
“There’s so little incentive to ramp up quickly, because the market really accommodates their inflexibility,” said Ammann, lead author of the recent NRDC study. The vertically-integrated coal plants in MISO are “much less flexible than coal plants in other markets. In PJM you see coal plants turning on much more quickly, since the merchant plant operators are reliant on the price signals to turn a profit. They don’t have the guaranteed rate recovery, so they’re very responsive to price signals.”
State utility commissions can prevent regulated utilities from recouping costs when coal plants are dispatched uneconomically. Michigan regulators did exactly this last year in a rate case for Indiana Michigan (I&M) Power, preventing the utility from passing on such costs for its share of the Rockport coal plant, located in Indiana.
Daniel said Indiana regulators should likewise protect Indiana customers from paying for uneconomic power from the Rockport plant. The RMI dashboard shows that plant dispatched $142 million worth of such power last year. Meanwhile the Michigan ruling could be considered precedent for Michigan utilities like DTE and Consumers Energy in future rate cases.
Ammann noted that states can also use the Integrated Resource Plan process to curb uneconomic dispatch, as Minnesota’s utility commission did when it recently decided that Otter Tail Power’s Coyote coal plant can only recoup costs during a designated power emergency.
“It’s an interesting approach for getting ratepayers basically off the hook for coal plants that aren’t retiring, that might still be economic to run for a small number of hours,” Ammann said.
Grid operators like MISO may have the most important role to play in better managing markets, refusing to dispatch coal plants that aren’t necessary and doing deeper analysis to figure out exactly how much power is needed. Experts say multi-day markets – rather than just real-time and day-ahead ones – could better match supply with demand and avoid unnecessary coal plant dispatch.
MISO’s Independent Market Monitor has recommended such measures, including de-committing coal power producers who sold into the day-ahead market if it turns out that others – including renewables – could sell power more efficiently in the real-time market once the time comes.
“MISO works closely with our members, state regulators and our independent market monitor to ensure our markets are efficient,” said MISO spokesperson Brandon Morris. MISO’s June 2024 monthly operations report shows that in June, 18% of coal-fired power dispatched in the region was uneconomic self-committed dispatch.
Experts note that fuel delivery contracts often include a minimum purchase, so utilities committed to buying a certain amount of fuel might as well burn the fuel even if they are not making a profit on the power. This might not have been an issue in years past when coal plants operated at high capacity most of the time, but as coal plants have become increasingly uncompetitive, the NRDC study notes, they are more likely to be committed to buy fuel they actually don’t need. Fuel contracts are usually of short duration, with 88% of those reviewed by the federal Energy Information Administration expiring by 2025, meaning there is ample opportunity for fuel delivery contracts to be revised, the NRDC study said.
Such fuel contracts have meant massive stocks of unneeded coal piling up at Duke plants in Indiana, Inskeep said, forcing the company to burn it even if the power isn’t needed.
Protogere said the coal supplies are necessary, as “the goal is to ensure a reliable supply in an increasingly uncertain market. The aim is to manage volatility as well as maintain long-term supply reliability and security, so that we don’t have to resort to higher cost options in the market.”
Inskeep hopes state regulators deny requests by Duke and other utilities to increase coal-fired generation and the recouping of the costs from ratepayers.
“The bottom line with this uneconomic dispatch situation is it means utilities are keeping their old expensive coal plants open longer than they should,” Inskeep said. “Utilities should be rapidly transitioning to a renewable energy-based portfolio of resources. Instead, utilities are feeling pressure to justify a lot of the bad economic decisions they’ve made in the past, foolish decisions to invest millions or even billions of dollars to keep these plants open.”
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