Surging Renewables and RNG's Moment

Alex Rivera 4

Hey everyone, welcome back to Digest This. I’m Alex, joined as always by Emily. Today’s episode is all about the big moves in renewables—solar setting the pace, some wild political swings, and what that means as we barrel toward 2026. Emily, you catch that new Federal Energy Regulatory Comission report?

Emily Nguyen 4

Yeah, Alex, I was just digging into it before we started recording. Honestly, it’s kind of jaw-dropping—91% of new generation added in the first five months of 2025? And 11.5 gigawatts of that was solar, which is, you know, pretty much off the charts if you look historically.

Alex Rivera 4

Exactly. I mean, we’ve been talking about solar’s momentum for what feels like years—but this is another level. It just keeps outperforming and even with all these, let’s say, not-so-friendly winds coming out of DC, it’s still coming online faster and, frankly, cheaper than just about anything else. That’s according to FERC, and even SEIA’s folks are out there saying the same.

Emily Nguyen 4

Right, although I think it’s worth noting a lot of that data predates the “One Big Beautiful Bill Act”—that policy megabill that puts a squeeze on tax credits for renewables. It’s not just political theater; it’s already led to guidance from Treasury that could tighten up even more. And still, the project pipeline keeps growing. There’s clearly so much market demand right now for renewables.

Alex Rivera 4

Totally. And what’s wild is, even with the administration, uh, putting speed bumps in the way—stop-work orders, guidance changes, all that—the American grid is still adding miles and miles of new lines. You see Colorado adding those big 345 kV lines?

Emily Nguyen 4

I sure have.

Alex Rivera 4

Anyway, point is: solar has been, for 21 months in a row, the number one new source of power, even with all this policy turbulence.

Emily Nguyen 4

Yeah. I mean, you and I have talked about this before—maybe even in our “Stalled Momentum” episode—about how federal policy uncertainty tends to make industry folks a little, what’s the word... apprehensive? But demand is just so high, especially for small-scale systems—rooftop arrays, community solar. FERC’s data doesn’t even count a lot of those. Right now, it's about a quarter of all US electricity that’s coming from renewables. That’s, wow, really something.

Alex Rivera 4

For sure. And then, when you factor in hydro, biomass, geothermal—you’re looking at a third of our utility-scale capacity from renewables now. The transmission build-out is the next frontier, but we can’t ignore how dominant solar’s been, even in a tough policy moment. But, uh, speaking of “tough”—should we talk about RNG next? Because that space is, well, heating up.

Emily Nguyen 4

Alright, yeah, let’s shift gears. So, big headline: According to Wood Mackenzie, North American RNG production capacity has grown by 35% since 2023. That’s up to 604 million cubic feet a day. It’s impressive, but when you start digging, it’s also clear we’re still way below the resource’s full potential. Like, less than half of what we could be doing by 2050, if I remember right.

Alex Rivera 4

Yeah, and that kind of parallel’s what we saw in renewables a while back, right? I mean, it’s growing—sure—but a lot of that’s riding on the back of both investment momentum and policy support. And there’s, what, tons of M&A going on lately? You’ve got companies showing confidence. Emily, you’ve looked into the policy stuff more than just about anyone I know; what stands out to you this year?

Emily Nguyen 4

Well, there’s honestly a lot that’s making folks nervous. Federal policies have really been a mixed bag—take the Renewable Fuel Standard (RFS), for example, which does set some targets to 2025, but then there’s this whole eRINs piece that just… didn’t make it into the final EPA rules. And then, the 45V tax credit for clean hydrogen that was part of the IRA—that got the axe in the “One Big Beautiful Bill Act” after this year. It’s sending mixed signals to investors and developers. You end up with—how do I put this?—kind of a roller-coaster for some project's economics.

Alex Rivera 4

Exactly. And with all that regulatory uncertainty, it’s tough to stabilize prices for environmental attributes or boost long-term confidence. Yet, with so much merger activity and these big capacity jumps—what was it, 70 million cubic feet a day just this year alone?—people are betting that eventually, the policy will settle down in favor of investment.

Emily Nguyen 4

Completely. And then when you look at the map, you’ve got growth happening basically everywhere—across the US and Canada, across all sorts of feedstocks.

Emily Nguyen 4

So let's talk about the states, you start to see this kind of resilience coming from places like California, Michigan, and New Mexico—but also up north in Alberta and Québec. California’s tightening up its low-carbon fuel standard rules for biomethane, Michigan’s aiming for 100% clean energy by 2040 with landfill and food waste in the mix, and New Mexico just set a really ambitious clean fuel standard. It’s like, while the federal scene gets more unpredictable, these states and provinces are really holding the line on support.

Alex Rivera 4

And not to forget, Canada’s playing hardball with methane regs on landfill emissions, while Alberta is incentivizing animal manure digesters—look, not the world’s sexiest technology, but it moves the needle! Plus, Québec’s just throwing real money at RNG project capital costs. This “regional resilience” is actually what’s helping a lot of projects. It kind of reminds me of what we saw in our “Clean Energy Comeback” episode, where states were just not waiting for the feds and took matters into their own hands.

Emily Nguyen 4

Totally. But the flip side is, costs are still a real barrier for RNG. High costs keep a lot of newer developers out, and that’s where incentives can really help. But more than half of US RNG production is still tied to the transport sector. That’s great for meeting current policy targets, but it can’t be the only game in town.

Alex Rivera 4

Costs are no joke, and expanding beyond transport is kind of the million-dollar question. We’re starting to see utilities, corporates, even some international buyers come into the picture. I think, as we move forward, it’s going to take both nimble state policy and some bold utility leadership—plus more innovation in how we package and deliver these products to industrial and corporate customers. Otherwise, we’ll stay stuck in niche sectors. But, Emily, as always, I’m looking forward to seeing where this market—this whole ecosystem, really—heads next.

Emily Nguyen 4