Your Playbook as DOE Redirects $365 M to Puerto Rico

Hi there,

This week’s briefing highlights major shifts in federal backing for clean energy and grid resilience. The DOE has clawed back $3.7 billion in decarbonization grants and canceled Sunnova’s $2.92 billion Loan Programs Office guarantee, signaling that founders must plan new projects assuming DOE dollars are no longer guaranteed.

Market-design changes—from ERCOT’s new load-shedding authority to a 29 percent surge in CAISO curtailments—underscore opportunities for demand-response, storage, and hydrogen solutions. Nuclear pipelines also firm up as the NRC clears the Palisades environmental review, paving the way for restarts.

In Asia and Europe, Sinopec’s $690 million hydrogen VC fund and Hyundai’s $91 million climate-tech vehicle demonstrate continued capital inflows. Finally, we probe how $365 million was rerouted to Puerto Rico’s grid hardening and outline tactical pathways for founders to engage. Read on for actionable takeaways and emerging signals to watch.

🔦 Signals Worth Monitoring

Curtailed or Cancelled Federal Support

🔨Headline: DOE axes $3.7 B in carbon-capture & decarb demonstration grants

What Happened: Secretary Chris Wright terminated 24 OCED awards after a “financial viability” review—killing pilots for CCUS, hydrogen and industrial heat. UtilityDive lists Calpine, Ørsted and Exxon among losers.

Why Founders Should Care: Sign that “gov’t-cheque de-risking” is no longer guaranteed. Budget new projects assuming zero DOE grant dollars and court private offtake partners early.

🔨Headline: Trump administration cancels Sunnova’s $2.92 B LPO loan guarantee

What Happened: Residential-solar installer Sunnova lost its conditional DOE loan guarantee, the first large-scale pullback from the Loan Programs Office under the new administration.

Why Founders Should Care: Similar to the $3.7 B clawed back above — gov’t funded de-risking is no longer guaranteed for clean energy projects.

Grid-Reliability & Market-Design Shifts

⚡Headline: ERCOT granted new emergency load-shedding powers (Texas Senate Bill 6)

What Happened: Bill lets ERCOT cut power to large industrial users pre-blackout as summer peaks approach 144 GW by 2031.

Why Founders Should Care: Grows paid demand-response and micro-grid service markets; energy-intensive facilities need hedges or on-site backup.

⚡Headline: California solar + wind curtailments up 29 % YoY (2024)

What Happened: CAISO dumped 3.4 MWh of utility scale solar and wind in 2024…a 29% increase from 2023

Why Founders Should Care: Pure-play PV in CAISO faces revenue challenges. Storage, hydrogen and maybe desalination-type plays likely gain advantages.

⚡Headline: UC Berkeley study: state could double capacity via surplus interconnection points

What Happened: Researchers flag 76 GW of clean energy capacity—mostly due to 16 GW of gas plants operating only 15% of the time. In theory you can add solar near these underutilized interconnection points. Note: This paper hasn’t been peer reviewed.

Why Founders Should Care:

⚡Headline: NRC clears Palisades environmental review—first U.S. reactor “un-retirement”

What Happened: Holtec wins key sign-off to restart the Michigan plant (closed 2022) by Oct 2025 pending steam generator repairs. Michigan offering $300 million to aid in restarting the plant.

Why Founders Should Care: Validates reactor reuse; SMR startups can pitch shuttered nuke sites with existing equipment.

Capital Still Flowing—Strategic & Asia-Led

💰Headline: Sinopec launches $690 M Hydrogen VC Fund

What Happened: China’s oil and gas giant seeds country’s biggest H₂ VC, targeting core equipment and materials; already operates 11 supply hubs.

Why Founders Should Care: Expect Chinese cost curves for hydrogen to reduce rapidly. US/EU startups must lean on IP defensibility and secure offtake contracts early to compete or raise from Sinopec. China will be a primary consumer of hydrogen.

💰Headline: Hyundai ZER01NE Fund III raises $91 M for climate-adjacent tech

What Happened: Targets AI, robotics, hydrogen and energy startups; backed by 10 Hyundai affiliates. Has previously invested in EV battery recycling and grid management software.

Why Founders Should Care: Corporate VCs still hunting strategic bets—offers capital plus channel access for mobility & grid-edge solutions.

💰Headline: EU unveils €3.8 B action plan to shore up battery & EV supply chains

What Happened: European incentives may siphon talent and capital overseas from the US. Plan includes workforce development and building supply chains for the raw materials needed.

Why Founders Should Care: European demand for anode/cathode materials and recycling tech will rise—non-EU founders can court JV licenses or supply deals.

📝 Founder Briefing

Where to Watch as $365 Million Flows into Puerto Rico’s Grid

In May 2025 (and as highlighted as a signal last week) the US DOE announced that $365 million originally reserved for a low‑income rooftop‑solar rebate program would instead be deployed to accelerate grid‑resilience projects across Puerto Rico.

DOE paired the reallocation with an emergency order giving local operators latitude to begin critical work before the 2025 hurricane season.

Meanwhile, roughly $18 billion in Federal Emergency Management Agency (FEMA) reconstruction funds remains on the table; Puerto Rico’s governor recently chastised federal bureaucracy for delaying access to that money. DOE’s new dollars are therefore walled‑off for “shovel‑ready” projects that can show progress within months, not years.

Where the $365 Million May Land

DOE has not released a public line‑item budget, but agency statements, regulatory dockets and utility press releases outline four clear work streams that the additional funding will likely support:

The below is speculative based on confirmed press releases. It is further complicated by the governor wants to cancel their contract with LUMA energy in subsequent years.

Gatekeepers & How to Engage

• DOE Grid Deployment Office – Holds final sign‑off on every expenditure for this $365 million. Follow quarterly DOE webinars and check the public dashboard on energy.gov for milestones and contact windows.

• LUMA Energy (Transmission & Distribution operator) – Controls all transmission, distribution, and vegetation‑management contracts. Create a supplier profile on PowerAdvocate and monitor open RFPs.

• PREPA / Public‑Private Partnerships Authority (P3) – Leads procurement for temporary generation and major fuel‑logistics projects. Watch competitive RFPs and team up with OEMs or EPCs already established with them.

Founders looking to break into Puerto Rico should understand that any hardware and/or software that directly reduce outage minutes, crew hours, or fuel barrels are in demand. The following are examples of what may do well:

• Sensor‑Rich Grid Intelligence — IoT devices that can monitor the grid and identify and help mitigate downtime will become critical.

• Drone‑Vision Analytics — AI that spots vegetation risks faster than manual patrols, feeding LUMA’s clearance plan.

• Microgrid Controllers — Rugged controllers that let hospitals or water‑treatment plants island during hurricane season with a blend of solar, storage and backup generator will thrive under the resiliency push.

Firms that help stabilize the grid now will be well placed when multi‑gigawatt solar and storage tranches resume bidding. Keep in mind - many of these projects have been in the bidding process for years so the big focus will be to find ways to become a subcontractor.

📒 Founder Playbook and Takeaways

1. Move now. Many opportunities have already closed. With emergency orders in effect and RFIs already open, the best pilot projects will lock in funding well before the next hurricane season and likely win it as a subcontractor in an existing project. Many opportunities for RFPs have already closed, hence our recommendation is to find the winners of RFPs and try to partner with them.

2. Anchor locally. Partner with Puerto Rican EPCs, distributors, or university labs to satisfy workforce and language expectations.

3. Get visible. Open a PowerAdvocate account, complete LUMA’s pre‑qualification survey, and monitor for RFPs with words like “vegetation” and “microgrid.” Mirror that setup on the P3 portal if your product touches generation.

4. Speak to the grid’s need. Frame every proposal in outage minutes avoided, crew hours saved, or gallons of fuel displaced.

5. Price for performance. Offer pay‑for‑performance terms—dollars per avoided outage or per MWh of fuel saved—to meet PREPA’s cash‑flow constraints.

👀 What we’re continuing to watch

• U.S. Senate work on “One Big, Beautiful Bill”. We’re monitoring for potential revisions to IRA Credits

• DOE Issues 202(c) Emergency Order for PJM — We’re tracking opportunities for demand response and for microgrids. This emergency order seems to be following the trend of keeping plants from being retired to keep capacity available for the summer months.

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