Utilities & Transport – Page 3

Foley Automotive Update- 15 May 2025

Trump Administration and Tariff Policies

The U.S. lowered the base level of duties on most Chinese goods to 30% from 145%, and China cut its levies on many U.S. products to 10% from 125% as part of a 90-day tariff pause scheduled between the nations that is to take effect this week.
A U.S.-UK trade deal announced May 8 would allow imports of 100,000 vehicles annually by UK car manufacturers under a 10% “reciprocal tariff,” with additional vehicles subject to 25% levies. The American Automotive Policy Council expressed disappointment that in certain instances, “it will now be cheaper to import a UK vehicle with very little U.S. content than a USMCA compliant vehicle from Mexico or Canada that is half American parts.”
A U.S. Customs and Border Protection guidance document for the auto parts tariffs that took effect May 3 indicated that US-Mexico-Canada Agreement (USMCA)-compliant parts have a “0 percent additional ad valorem rate of duty.” The duration of this exemption is unknown.
A pair of executive orders announced on April 29 will ease some of the impact of certain automotive import tariffs. One order will establish a complex system of temporary and partial reimbursements for certain tariffed auto parts, and another order indicates tariffed vehicles and auto parts will not “stack” on other levies, such as the 25% duty on steel and aluminum. One large supplier quoted in Automotive News indicated the orders were a positive step, while an unnamed major supplier stated the tariff revisions were “not cause for celebration” as the industry will still encounter significantly higher operational costs. An analyst from Wedbush described the revised tariffs as a “gut punch” for the auto industry.
May 16, 2025 is the deadline for submitting public comments regarding the Trump administration’s Section 232 investigation into imports of processed critical minerals and their derivative products.

Automotive Key Developments

Automotive News provided updates on suppliers’ concerns regarding the potential for lower production volumes this year as a result of automotive import tariffs, as well as the challenges of assessing USMCA-compliant content in vehicles.
GM estimated the Trump administration’s tariffs could increase its costs by up to $5 billion this year, and potentially reduce 2025 net profit by up to 25% year-over-year. The automaker expects to offset its projected tariff exposure by roughly 30% through spending reductions and shifting more supplies and manufacturing to the U.S. In 2024, GM imported more vehicles into the U.S. than any other automaker.
Japanese automakers could collectively experience a $19 billion impact from U.S. import tariffs, according to analysis from Bloomberg.
Toyota and Honda projected annual net profit declines of 35% and 70%, respectively, for fiscal year ending March 2026, if U.S. automotive import tariffs are maintained. Toyota estimated its tariff impact reached $1.3 billion within just two months, while Honda expects an annual tariff impact of up to $3 billion.
Ford projected a $2.5 billion impact from tariffs in 2025, but noted it plans to offset up to $1 billion of the costs.
Revised analysis from the Anderson Economic Group estimates the Trump administration’s current automotive tariff policies will raise vehicle costs from $2,000 to $15,000.
U.S. new light-vehicle inventory is down by an estimated 24% year-over-year, representing a 61 days’ supply, following robust sales in April.
Kelley Blue Book estimated the U.S. new light-vehicle average transaction price (ATP) rose 2.5% in April 2025 from March. New-vehicle sales incentives fell to 6.7% of ATP last month, down from 7% in March and compared to a pre-pandemic norm of roughly 10%.
The U.S. House Ways and Means Committee included a measure to eliminate consumer tax credits of up to $7,500 for a new EV and $4,000 for a used EV at the end of 2025 in the “Big, Beautiful” tax package introduced on May 12. The initial proposal would extend new EV tax credits until the end of 2026 for automakers that sold less than 200,000 EVs in the U.S. between 2010 and 2025.
California and 16 other states filed a lawsuit over the Trump administration’s suspension of the $5 billion National Electric Vehicle Infrastructure (NEVI) program created by the 2021 Bipartisan Infrastructure Law.
The U.S. House on May 1 passed the third of three Congressional Review Act resolutions to repeal Clean Air Act waivers issued by the Environmental Protection Agency for California’s vehicle emissions programs. A Senate vote related to the proposals has not yet been scheduled.
Federal Reserve Chair Jerome Powell cautioned the U.S. “may be entering a period of more frequent, and potentially more persistent, supply shocks” due to economic and trade policy uncertainty.

OEMs/Suppliers

First-quarter 2025 profitability dropped by 2.3% for Hyundai, 6.6% for GM, nearly 40% for Volkswagen, and over 60% for Ford.
Automakers that include Ford, Volvo, Stellantis and Mercedes recently suspended 2025 financial guidance due to tariff-related uncertainty.
Magna estimated its annual direct tariff costs will reach $250 million for 2025.
Nissan reported a net loss equivalent to $4.55 billion for its fiscal year ended March 31, 2025 due in part to restructuring charges. The automaker intends to cut 15% of its global workforce, and consolidate its global production base to 10 assembly plants from 17.
Ford plans to raise prices by as much as $2,000 on certain Mexico-produced models in response to U.S. import tariffs.
GM plans to eliminate a shift at its Oshawa Assembly plant in Ontario in response to “forecasted demand and the evolving trade environment.”
Aptiv plans to establish two new plants in China in the second half of this year that will produce high-voltage connectors and active safety products.
Stellantis plans to launch a lower-priced version of its U.S.-made Ram pickup truck later this year to boost sales and mitigate tariff exposure. The automaker previously shifted pickup truck production for certain models from Michigan to Mexico.

Market Trends and Regulatory

AlixPartners predicts Chinese brands will account for 30% of the global auto market by 2030, compared with 21% in 2024.
BYD has a goal to achieve 50% of its sales outside of China by 2030.
Congress voted to repeal an Environmental Protection Agency rule on National Emission Standards for Hazardous Air Pollutants related to rubber tire manufacturing.
According to a Gartner survey of 126 supply chain executives, 47% of respondents were renegotiating contracts with suppliers to mitigate the impact of tariffs.

Autonomous Technologies and Vehicle Software

Automotive News provided an overview of recent developments in autonomous driving.
Ford plans to cut 350 connected-vehicle software jobs in the U.S. and Canada, and the reductions account for roughly 5% of the total team, according to a report in The Detroit News.
Waymo will partner with Toyota to develop robotaxi technology for personally-owned vehicles. Waymo’s self-driving partnerships include Hyundai and China’s Geely.

Electric Vehicles and Low-Emissions Technology

U.S. EV sales declined by roughly 5% in April, amid a 10% YOY increase in overall new-vehicle sales. Global EV sales in April were up by an estimated 29% YOY, led by a 35% increase in China.
Honda will postpone a planned $11 billion investment in new EV factories in Ontario, Canada due to slowing demand in North America.
GM’s Orion Assembly Plant in Michigan may not operate as a fully electric vehicle factory as originally planned, according to unnamed sources in Crain’s Detroit.
The American and Chinese car markets are likely to diverge further due to differences in supply chain costs and consumer preferences, as well as the nations’ ongoing trade conflicts.
GM suspended a project with Piston Automotive to establish a $55 million hydrogen fuel cell plant in Detroit.
Stellantis delayed production of its first battery-electric Ram pickup truck until 2027.
Hyundai plans to launch a hydrogen production and dispensing facility for heavy-duty trucks in Georgia.
Toronto-based battery recycler Li-cycle is pursuing a sale of its business or assets.
Canadian electric truck and bus maker Lion Electric faces a “very high” likelihood of liquidation after the Quebec government decided not to support a public bailout.

The Renaissance of HVDC for a Low Carbon Future: Part 2

As we discussed in Part 1 of this series of Articles, there is likely to be significant future increased demand for low loss, long-distance interconnectors. While the concept of transmitting large amounts of energy with relatively low losses over long distances (e.g., from solar farms in North Africa to Europe) might be attractive in principle, significant political, economic and legal challenges face potential investors and lenders, particularly in developing jurisdictions.
We will explore below the key models for structuring and financing transmission infrastructure, including the integrated grid model, merchant investment and independent power transmission (IPT) projects.
Integrated grid model
Power transmission has traditionally been considered a natural monopoly. Globally, transmission assets are most commonly owned and/or operated by a transmission utility as part of an integrated grid. The transmission utility may be state-owned, privately owned or operating under a concession granted by the government. Under this model, investment in transmission lines is typically financed using the utility’s balance sheet and recovered through a regulated tariff. This tariff is charged to consumers as part of the overall retail electricity price. However, in countries where the transmission infrastructure is publicly owned, this model can strain public finances, particularly when governments and state-owned utilities face fiscal constraints. This often results in underinvestment in transmission infrastructure and delays to necessary upgrades.
Merchant investment
The merchant investment model is a privately funded approach to developing transmission lines where revenue is primarily derived from price differentials between two markets or zones creating arbitrage opportunities. This makes it particularly suited for cross-border interconnections or countries with an unbundled power market and multiple wholesale price zones. Many interconnection projects[1] to date have used the merchant investment model in which the investor builds and operates a transmission line. This model is typically for standalone assets—either a single line or a bundle of lines. A technical requirement for the merchant model is the ability to control and measure electricity flows, as the operator profits from directing power where it is most valuable. As such, this model is more suited for DC lines.
However, the revenue uncertainty of this model makes it more difficult to finance using project finance techniques, which require predictable revenue streams. To mitigate this risk, governments have sometimes intervened to support merchant lines. One example is the NeuConnect interconnector between the UK and Germany, which operates under a cap and floor mechanism. This reduces revenue uncertainty, improving bankability while still allowing private investors to benefit from price differentials. See below for further discussion on the NeuConnect project.
The merchant investment model is not generally viable in countries without liberalised wholesale electricity markets. This is the case for many emerging markets with a vertically integrated, state-owned power sector. The lack of a competitive wholesale market and transparent, market-based price signals limits the potential for price differentials and reduces opportunities for price arbitrage between different markets or zones that are essential for a merchant line’s revenue model.
IPT Projects
Another model which can facilitate private investment in transmission assets is independent power transmission (IPT). In essence, it involves the government (or the state-owned utility) tendering a long-term contract whereby the IPT (the winning bidder) will be responsible for building and operating a transmission line in exchange for contractually defined payments dependent upon the availability of the line.
A recent example of an IPT project, although not HVDC, is the 400 kV Lessos–Loosuk and 220 kV Kisumu–Musaga transmission lines in Kenya. This project involves the development, financing and construction of the transmission lines under a public-private partnership framework by Africa50 and the Power Grid Corporation of India Limited. The project is set to become Kenya’s first IPT and a pioneering example in Africa.
IPT projects have been adopted in many countries, albeit mostly for in-country transmission. Adopting the same model for international interconnectors is likely to be more complex, not least due to the need to coordinate between the governments of the relevant countries.
Also in the African context, the Côte d’Ivoire-Liberia-Sierra Leone-Guinea (CLSG) interconnection project, financed by the AfDB, EIB, KfW, World Bank and its member countries and completed and commissioned in 2021, illustrates one way forward. It involved the construction of a 1,300 km long 225 kV AC transmission line and associated substations connecting four participating countries’ energy systems into the WAPP. The project was implemented through a regional special purpose company (Transco), jointly owned by the national utilities of those countries, and responsible for the financing, construction, ownership and operation of the project assets.
To encourage the use of the CLSG transmission line, an open access policy was adopted. Power purchase agreements (PPAs) were signed between Côte d’Ivoire’s national utility and those of the other three countries, with each also entering into a transmission service agreement with Transco. The transmission tariff was set using the “postage-stamp” methodology rather than an availability-based tariff, so that transmission costs are effectively charged to the power purchasers based on their relative shares of trade through the transmission line. To mitigate the risk of a funding shortfall owing to low trading volumes, Transco’s shareholders agreed to cover any shortfall from trading revenue. This pricing methodology ensures cost recovery whilst facilitating trade through the transmission line.
While the CLSG project structure does not involve any private investment, in principle a similar structure could be adopted to implement the IPT model; for example, by replacing government-owned shareholders of Transco with private sector sponsors.
To a limited extent this was the structure adopted by the Central American Electricity Interconnection System (SIEPAC) which was taken into account in structuring the CLSG project. The SIEPAC transmission company (EPR),owns the 1,793 km interconnector (230 kV) linking the power grids of six Central American countries. EPR is owned by eight national utilities or transmission companies together with a private company (ENDESA of Spain) which is responsible for managing EPR. During the project design stage, the option of relying entirely on private investment was considered, but it was ultimately decided that there might not be sufficient interest from the private sector due to perceived project risks and the natural monopoly nature of transmission. Nevertheless, there seems to be no reason why, through proper risk management and with adequate financial incentives, such a structure could not be adopted with entirely private ownership.
Regulatory and legal challenges
In many developing countries, the electricity sector remains vertically integrated with monopoly networks. Although full “unbundling” is not a necessary pre-condition for IPT projects, existing legislation and regulation will need to be reviewed and may need to be revised to enable an IPT project to operate alongside the national utility. In particular, the grid code will likely need to be modified to include operating procedures and principles. In the context of an interconnection project, this will need to be done for each country to which it connects and could be cumbersome and result in a long development period.
This challenge was highlighted by the North Core Interconnector Project (a 330 kV AC transmission line connecting Nigeria, Niger, Benin and Burkina Faso). According to the ECOWAS Master Plan, the SPV structure adopted in the CLSG project was originally considered for the North Core project but was ultimately not adopted owing to concerns over the delay that could be caused by the need to make adjustments to national legal frameworks.
In civil law jurisdictions, specific enabling legislation may also be required to implement interconnector projects. Conflicts of law and policy questions may also arise where cross-border agreements are entered into; for example, some provisions of law may have mandatory application in certain jurisdictions; and where state-owned entities are involved, legal or policy requirements may dictate a choice of a particular governing law or dispute resolution arrangement.
“Project-on-Project” risk
For a cross-border interconnector, separate SPVs (or “sub-projects”) may be established in each relevant jurisdiction. This approach offers several benefits, including ring-fencing national risks, aligning with local licensing requirements and facilitating construction delivery management. However, it also introduces a high degree of interdependency, as each project segment must be successfully completed for the overall project to function. This creates challenges in managing interface risks, project delivery alignment and providing certainty for stakeholders in each sub-project that the other sub-project(s) will be delivered as planned.
To address these risks, risk allocation between project sponsors and other contract parties must be carefully calibrated to ensure that risk levels are acceptable to all stakeholders while achieving the bankability of the project.
Financial viability
The CLSG project provided an example of how transmission tariffs can be set to meet minimum revenue requirements. Investors, however, need confidence that contractual payments will be received from the transmission line users, which are likely to be national utilities, who may be in poor financial health. Many developing countries have experience in addressing this question in the context of independent power projects (IPPs), which may provide valuable lessons for developing IPT projects. For example, credit support may be provided through the use of escrow accounts to prioritise payments to private sector market participants. Where this is insufficient, governments may provide sovereign guarantees (or other government support) for payment obligations to IPTs. Additional security may also be provided by development finance institutions (DFIs).
EPC contract questions
The structuring of an interconnector project may present challenges in negotiating an EPC contract. For example, where multiple procuring parties decide to use a single entity (e.g., a special purpose vehicle company) to act as the employer under an EPC contract, with assets transferred to them as third party owners, particular concerns may arise for both the procuring parties and the contractor under the EPC contract, including in respect of risk allocation, indemnities, insurance and ensuring that the asset owners obtain the full benefit of rights under the EPC contract whilst the EPC contractor maintains adequate recourse against parties of sufficient financial substance; and bespoke amendments are likely to be required to standard construction contracts, e.g., those based on FIDIC forms.
The European interconnector experience and project revenue support regimes
The European market offers examples of successful privately financed submarine HVDC interconnector projects, underpinned by revenue support arrangements to make investment sufficiently attractive to sponsors and risks more palatable to prospective lenders.
The NeuConnect interconnector will create the first direct power link between Germany and the UK, two of Europe’s largest energy markets, and allowing trading of electricity between them. Construction of the pair of 725 km long terrestrial and subsea 525 kV HVDC cables is in progress and will create 1.4 GW of transmission bi-directional transmission capacity, sufficient to power 1.5 million homes.
The project has a capital cost of around £2.4 billion and achieved financial close in 2022, involving Meridiam, Allianz Capital Partners, Kansai Electric Power Grid and TEPCO Power Grid as sponsors and a consortium of more than 20 major banks and financial institutions as lenders (including EIB and JBIC). NeuConnect Britain Ltd. (NBL), incorporated in England, is responsible for all aspects of the project in the UK (as well as construction works in Dutch waters) while NeuConnect Deutschland GmbH & Co. KG, incorporated in Germany, is responsible for all aspects of the project in Germany.
NeuConnect states that it will facilitate non-discriminatory, fair and transparent access to capacity through a range of standardised auctioned products, detailed in Access Rules which are compliant with relevant regulations. The project however takes limited merchant risk as its revenues are underpinned by a 25 year cap and floor regime in the UK, which broadly covers 50% of project costs and 50% of the total revenues earned by the interconnector. Under this scheme, the project is entitled to a minimum revenue (the “notional floor”) but in return agrees to a defined cap above which all revenues will in effect be paid back to the electricity consumers. This mechanism is intended to ensure that end-consumers obtain value for money by capping investment returns if the project outperforms revenue expectations in exchange for the protection granted through the floor, with an element of commercial risk for the project in between, thereby providing an incentive for private investors to develop interconnector projects, as compared with other regimes where revenues are purely regulated and return on equity is generally insufficiently attractive.
Ofgem approved regulatory changes to the pre-existing UK cap and floor regime to allow the project to go ahead. Meanwhile, in Germany, legislative change was needed to accommodate the project. Pre-existing German legislation (the EnWG law) did not cover interconnector assets that were not owned by a German TSO, requiring an amendment to extend the German StromNEV regime to NeuConnect. Under this regime, the project receives statutory revenues based on its assessed cost base, including depreciation of the RAB and return on such RAB (differentiated between equity and debt). NeuConnect receives its regulatory revenues from TenneT TSO GmbH, the local transmission system operator in northern Germany.
In both jurisdictions, it is understood that the revenue support arrangements are adjusted based on the level of availability of the interconnector in order to incentivise the project to maximise availability.
Threats
Recent geopolitical events have highlighted the vulnerability of subsea data cables, gas pipelines and submarine electricity cables to deliberate sabotage or damage from ships’ anchors. It seems unlikely that insurance will be available for such risks and unless governments are willing to underwrite remediation costs and lost revenues, future private investment in submarine HVDC cables may be thrown into doubt in vulnerable areas of the world.
Conclusions
While AC power transmission and distribution systems are likely to remain for many years to come and may never be entirely replaced, HVDC is certain to play a vital role in providing backbone infrastructure to support a low carbon future. Investors, lenders, utilities, regulators and policymakers alike will be taking a keen interest in this exciting technology.
Endnote
[1] Outside Europe, where interconnectors are subject to regulation unless they are formally exempted. Even in the latter case, conditions may be placed on the exemption, such as an overall IRR cap.

European Commission Previews New Round of Countermeasures Against the United States

In April 2025, the European Union (“EU”) set tariffs on a series of US imports but immediately suspended their application until 14 July 2025. This was due to the US almost simultaneously announcing that it would be softening its across-the-board tariffs. In the case of EU exports, this meant going from a 20% to a 10% general “reciprocal” tariff for three months to negotiate better US/EU trade arrangements.
Possible further EU countermeasures on imports of US goods
Regardless, the European Commission (“EC”) hopes to have new countermeasures ready in case the ongoing trade negotiations between the EU and the US “do not produce a satisfactory result.” The EC has published a list of EU Combined Nomenclature (“CN”) codes, which represent categories of US goods which could be subjected to even further retaliation by the EU if the US does not adequately resolve its tariff dispute with the EC (vid. here). Examples of industries with goods that could be affected by the proposed countermeasures are:

Agrifood
Agricultural equipment
Chemical hydrocarbons
Alcohol/Spirits
Metals
Appliances and other household items
Sports equipment
Automobile
Turbines / related
Seagoing vessels
Aircraft
Paper

On 8 May 2025, in light of the slow pace of the negotiations, the EC announced that it would be hosting a stakeholder consultation, running until 10 June 2025. All interested parties may participate in consultations, including EU stakeholders, as well as US and third-nation companies (vid. here). Any new countermeasures would presumably apply concurrently with those which were suspended in April 2025.
The EC has not indicated what form these new countermeasures might take. The most likely scenario is that they would mostly take the form of retaliatory tariffs. The suspended April countermeasures constitute ad valorem tariffs ranging from 10% to 25%, depending on the type of good(s) in question.
The EC aims to make their newly proposed countermeasure operable before the US’ three-month tariff respite ends. Therefore, it would likely seek to have its proposals adopted by the time the temporary suspension of the April 2025 countermeasures runs out (i.e. on 15 July 2025).
It is important to note that, as of now, these new countermeasures are merely a possibility. Indeed, they have been proposed, and their implementation is being envisaged. Nevertheless, they are not yet definitive, as that would require their formal adoption by the EC and subsequent publication in the EU’s Official Journal.
Possible EU export controls on US-bound goods
In tandem with the tariff countermeasures, the EC has also published a list of EU goods that could be subject to export controls when bound for the US (available here). This list is much shorter than the proposed US goods list discussed above, but it does contain certain key goods such as:

Ferrous waste and scrap;
Remelting scrap ingots of iron or steel;
Aluminum waste and scrap;
Toluidines and their derivatives, and salts thereof;
Mixtures of odoriferous substances and mixtures of a kind used as raw materials in the food or drink industries, as well as other preparations based on odoriferous substances; and
Certain enzymes.

According to the EC, exports restrictions would affect US-bound goods worth EUR 4.4 billion. The exact form that the possible export controls would take remains unknown.
During the aforementioned consultation period running until 10 June 2025, interested parties may likewise submit comments on the scope of these proposed export controls.
How we can help
The publication of the proposed lists of US and EU goods by the EC constitutes a significant moment in transatlantic trade relations. While the two parties are formally engaged in trade negotiations, the EU is now threatening to impose considerably more severe countermeasures on the US. This escalation could impact both importing and exporting companies, as well as businesses throughout the broader supply chains. Nevertheless, the EC’s stakeholder consultations provide a valuable opportunity to engage with EU authorities on this situation to advocate for targeted, meaningful adjustments. Time is of the essence for companies who wish to participate in the consultation. An effective, evidence-based submission must be made before the 10 June 2025 deadline.

Motorcycle Safety Awareness Month: Key Tips for Drivers to Share the Road

Every May, we observe Motorcycle Safety Awareness Month to educate and remind all road users that motorcyclists have the same rights and responsibilities as any other driver. It’s a time to emphasize the importance of recognizing motorcyclists as equal participants on the road. In 2023, the fatality rate for motorcyclists was 28 times higher than that of passenger car occupants, highlighting the urgent need for increased driver awareness. With warmer weather bringing more bikes onto the roads, drivers must stay alert, drive responsibly, and understand how to share the road.
Here are some reminders that every driver should be aware of to safely share the road with motorcyclists:
1. Always Check Your Blind Spots
Motorcycles are small and can easily disappear in your blind spots, especially during lane changes or merges. Always double-check your mirrors and look over your shoulder before moving over. A quick glance can save a life.
2. Give Motorcycles Enough Room
Never crowd a motorcycle or follow too closely. Motorcycles may need to stop more quickly than cars, and rear-ending a rider can be fatal. Give them at least a full lane width and a 3- to 4-second following distance.
3. Use Your Turn Signals Early
Clear communication is key. Use your turn signals well in advance so motorcyclists and other drivers can anticipate your moves. This gives riders time to adjust their speed or position safely.
4. Respect Their Lane Position
Motorcyclists often adjust their lane position to see better, be seen, or avoid hazards. Don’t assume they’re giving up space, they are likely staying safe. Never try to share a lane with a motorcycle.
5. Be Extra Cautious in Intersections
Most motorcycle crashes occur at intersections. Always look more than once before turning or pulling out, especially when making a left turn. A motorcycle may seem farther away than it actually is due to its smaller size.
6. Watch for Weather Changes
Rain, wind, and road debris can be much more dangerous for riders than for drivers. Give them space to maneuver and never assume they’re overreacting.
Why It Matters
Motorcyclists are more vulnerable than drivers because they do not have airbags or steel frames to protect them. Being more cautious can mean the difference between life and death.
Final Thoughts
This May, let’s commit to driving with greater awareness. Protecting motorcyclists starts with simple practices, such as checking your blind spots, leaving space, and staying alert.

European Union Adopts 16th Package of Sanctions Against Russia

In a bid to further increase the pressure on Russia, the Council of the European Union has adopted additional measures which have been introduced in its 16th sanctions package. The new measures amending the framework Council Regulation (EU) 833/2014 are found and included in Council Regulation (EU) 2025/395 (EU’s 16th Package). They target systemically important sectors of the Russian economy, including energy, trade, transport, infrastructure and financial services.
Additional Listings
An additional 48 individuals and 35 entities have been targeted by asset freezes and travel bans. The EU’s 16th Package adds new criteria for listing individuals and entities that are part of support or benefit from Russia’s military-industrial complex. This is in addition to any entities or individuals who are active in sanctions circumvention, maritime or Russian crypto assets exchanges.
Anti-Circumvention Measures
An additional 74 vessels, bringing the total number of listed vessels to 153, have been added. These vessels are part of the shadow fleet or contribute to Russia’s energy revenues.
Trade Measures
Ban on Primary Aluminium Imports
The EU’s 16th Package also adopts further restrictions on the trade of goods and services. An aluminium import ban on EU imports of primary aluminium from Russia has been included. The exception to this is that it includes a “phase-in period” permitting the import of 275,000 tons over a 12-month period.
Export Bans
Export restrictions have been added which target 53 new companies, which include 34 companies outside of Russia and which support Russia’s military-industrial complex.
Dual-use export restrictions have been extended to additional items in order to cut Russia’s access to key technologies, including the following:

Dual-use chemical precursors to produce chloropicrin and other riot control agents used as chemical weapons by Russia in violation of the Chemical Weapons Convention.
Software related to computer numerical control machine tools used to manufacture weapons and video game controllers used by the Russian army to pilot drones on the battlefield.
Chromium ores and compounds due to their military applications.

Additional export restrictions on industrial goods, such as steel products, fireworks and certain minerals and chemicals, have been included.
Energy Measures
The EU’s 16th Package prohibits temporary storage or the placement under free zone procedures of Russian crude oil or petroleum products in EU ports, which was, until now, allowed if the oil complied with the price cap and went to a third country. This prohibition will inflict additional costs on the transport of Russian oil.
The package extends the prohibition to provide goods, technology and services for the completion of Russian liquefied natural gas projects to also crude oil projects in Russia, such as the Vostok oil project.
The package extends the existing software ban to restrict the export, supply or provision of oil and gas exploration software, which includes drilling processes, geological inspections and reservoir calculations, to Russia.
Infrastructure Measures
With immediate effect, a full transaction ban on specific Russian infrastructures—ports and airports which are believed to have been used to transport combat-related goods and technology or to circumvent the oil price cap by transporting Russian crude oil via ships in the shadow fleet—have been included in this latest package as they contribute to Russia’s military efforts.
The restrictions are broadly drafted and will apply to any transactions with relevant ports and airports (as listed in Annex XLVII of the EU’s 16th Package), even if there is no direct transaction with the port authorities themselves.
Transport Measures
One of the most notable changes under Article 5ae of the EU’s 16th Package is the imposition of a full flight ban which provides for the possibility to list any third-country airline operating domestic flights within Russia or supplying, selling, transferring or exporting, directly or indirectly, aircraft or other aviation goods and technology to a Russia air carrier or for flights within Russia.
If listed in Annex XLVI of the EU’s 16th Package, these air carriers, as well as any entity owned or controlled by them, will not be allowed to land in, take off from or fly over EU territory.
The flight ban will not apply to the following:
• In the case of an emergency landing or an emerging overflight.• If such landing, take-off or overflight is required for humanitarian purposes.
Financial Measures
An additional 13 Russian banks and three non-Russian banks, namely Bank BelVEB, Belgazprombank and VTB Bank (PJSC) Shanghai Branch (due to their use of the system for Transfer of Financial Messages of the Central Bank of Russia), have been either disconnected from the Society for Worldwide Interbank Financial Telecommunication international payment system or subjected to a transaction ban, intensifying financial isolation of Russia.
The European Union has also extended a transaction ban to allow it to target financial institutions and crypto asset providers circumventing the oil price cap so as to further isolate Russia’s financial network.
Measures Against Disinformation
To combat media manipulation and distortion of events, further restrictive measures have been placed on broadcasting activities. Eight additional media outlets, namely EADaily, Fondsk, Lenta, NewsFront, RuBaltic, SouthFront, Strategic Culture Foundation and Krasnaya Zvezda, have had broadcasting suspended because they are under the permanent control of Russian leadership and participate in spreading misinformation and propaganda.
Concluding Remarks
These increased enforcement efforts and highlighted sanctions are not just symbolic but impactful. As the European Union strengthens its sanctions framework and expands enforcement efforts, businesses must proactively assess their compliance strategies to mitigate legal and operational risks.

The Renaissance of HVDC for a Low Carbon Future

In this, the first of a series of two articles, we explore the resurgence of high voltage DC transmission technology and its relevance in a world that is transitioning to renewable power and adopting electric vehicles and heating and reducing its reliance on fossil fuels.
In this article we consider the benefits of the technology and some of the challenges it creates for investors, regulators and policy makers. In the second article we will look at how investments in HVDC transmission projects might be structured, including by examining examples of projects that have been successfully implemented.
Introduction
Anyone who has read a little history or seen the 2017 film The Current War knows that George Westinghouse’s alternating current (AC) won the late nineteenth century battle against Thomas Edison’s purportedly safer direct current (DC) alternative—the evidence is plain to see in our own homes. Ultimately, in 1892 the Edison Electric Light Company merged with its main AC competitor, Thomson-Houston, to form General Electric.[1]
A principal reason for AC’s early success was that transmission of electricity over significant distances is inefficient at low voltages: the energy wasted as heat in a conductor is proportional to the square of the current; and, for any given quantity of power transmission, the current is inversely proportional to voltage. Therefore, the higher the voltage the lower the energy losses become.
High transmission voltages are therefore desirable, with lower voltages at the point of use for safety reasons. A hundred odd years ago there was no efficient solution to convert DC from low to high voltage. AC on the other hand could be easily stepped up in voltage using a simple and cheap transformer, which has no moving parts. The invention of the induction motor also allowed AC to be used to power heavy industrial machinery, although DC still had many advantages over AC, such as being easier to use for railways and to control variable speed, asynchronous motors.
DC’s renaissance
More recently, over the past few decades, DC systems and in particular high voltage DC (HVDC) have enjoyed a renaissance, owing to their offering a number of benefits. HVDC transmission involves purely reactive power with no reactive power component and associated losses, which ultimately limits the length of high voltage AC power lines. HVDC transmission lines are technically the only viable solution for submarine or terrestrial buried electrical cables longer than a few tens of kilometers because of the capacitance of the insulated cables (which have to be charged and discharged each cycle, causing significant energy losses).
DC transmission also allows two asynchronous AC transmission grids (e.g., operating at different frequencies in different territories) to be interconnected. For the same reason, HVDC is typically also used to connect offshore wind farms, with the additional advantage that wind turbine generators can operate asynchronously with the onshore grid and, as such, at an optimum level of efficiency for any given wind condition.
Photovoltaic panels are only capable of directly producing DC output, and an inverter therefore has to be used to generate a three-phase high voltage AC output which is synchronised with the transmission grid. The same is true of storage batteries and other non-traditional power generation sources that do not use spinning generators.
Inverters use high-power, solid-state devices (typically, insulated gate bipolar transistors (IGBTs)) which switch on and off in a modulated configuration, controlled by sophisticated electronics, to produce a sinusoidal output which can be stepped up via a transformer to high voltage AC (HVAC) for transmission. Similar conversion devices can be configured to step-up the lower voltage DC output of a solar panel array or battery energy storage system directly to HVDC suitable for transmission or indeed to convert HVAC to HVDC.
The drive towards increased offshore wind power generation in many countries, including the UK, where generation sources are located far from where energy is required by consumers, provides a good illustration of the advantages and benefits of HVDC solutions. It would be impractical to build new transmission lines linking Scotland with England, such as the Eastern Green Links, without using subsea cables;[2] and, as noted above, HVDC is the only viable way to transmit electricity over long distances via such cables, which will necessarily have to be several hundred kilometers long.[3]
Several planned projects also involve long distance terrestrial buried HVDC cables, as the impact on the landscape is minimal once the work is completed and the land corridor restored—and there may be significant local resistance to new terrestrial overhead cables.
As the proportion of electricity generated by renewables increases, and as battery storage systems become more widespread, the arguments for using HVDC transmission more generally, as opposed to high voltage AC, become more compelling. If we take into account the future expansion of electric vehicle (EV) use and the need for fast battery charging stations, there are additional arguments in favour of HVDC systems. EV batteries require relatively low voltage but high current DC to charge rapidly. As such, a battery charging station array could in principle be supplied locally by DC or AC. There is no inherent technical requirement for AC as opposed to DC (or vice versa) and in principle either could be used with the appropriate conversion equipment; but what HVDC offers is potentially greater efficiencies and economies on a wider scale, which are discussed below.
Why use HVDC systems?
HVDC transmission systems offer a number of advantages over HVAC:

HVDC requires only two conductors, whereas HVAC needs three to support three phases, reducing costs and potentially requiring narrower land corridors.
HVDC power transmission losses may be lower than 0.3% per 100 km, which is 30% to 40% lower than losses for HVAC at an equivalent voltage, for a number of reasons:

AC suffers from a skin effect whereby only the outer part of the cable conducts current, which is avoided in DC transmission—the result is that for a given conductor size and energy losses, HVDC systems can transmit higher current over longer distances;
HVDC lines operate continuously at peak voltage (which is determined by the design of the transmission line insulators and towers, among other things), whereas HVAC is sinusoidal—and while the crests of the sine wave are naturally at peak voltage, the effective average voltage (and corresponding current) is the root mean square value (RMS), which is only 0.7 times the peak voltage; the net effect is to increase the power transmission capacity of an HVDC system relative to HVAC; and
DC carries only active power, whereas AC transfers both active and reactive power.

HVDC transmission lines/interconnectors are asynchronous, enabling connections between unsynchronised power sources, such as two grids operating at different frequencies, phases or voltages.
As noted above, HVDC is the only practical option for undersea cables longer than around 50 km.

Drawbacks of HVDC
HVDC does have certain drawbacks:

HVDC systems may be less reliable, have lower availability and be more expensive to maintain than HVAC, owing to their greater complexity;
additional complexity also increases the relative cost for shorter-distance transmission as compared with HVAC;
converter stations are required at each end of HVDC cables to convert from AC to DC and back again (assuming the source and load are AC)—these are expensive and may introduce relatively higher energy losses for shorter distance lines—but as noted above in the case of DC generation sources (such as solar) and DC loads (such as battery chargers), conversion equipment is also required if an HVAC transmission line is used; and
HVDC switching and breaker systems are more difficult to design and implement because, unlike AC which has zero current twice every cycle (at which point the circuit can be broken safely), HVDC current is continuous and a simple mechanical breaker cannot therefore be used because it would suffer potentially destructive arcing.

Weighing up the pros and cons, it is generally considered that for overhead transmission lines, HVDC transmission becomes cost effective above a minimum critical distance.
Bringing increased future reliance on renewable power generation, electrical vehicles, battery storage and heat pumps into the equation suggests that there are potential benefits in developing wide area HVDC super grids. These might help to mitigate the intermittency of renewable power sources by averaging and smoothing the outputs of geographically dispersed generation facilities.
It also seems likely that substantial investment in upgrading of transmission systems will be required to support any move towards the widespread use of electric vehicles and the adoption of heat pumps for heating in place of natural gas. Existing transmission systems are entirely inadequate and would create severe bottlenecks. The United Kingdom is already seeing the impact of planning for such changes in its “Great Grid Upgrade” through the procurement of the Eastern Green Links (EGL 1 to EGL 4) between Scotland and England, in the case of EGL3 and EGL4 reaching as far as East Anglia.
Implications for investors, regulators and policymakers[4]
Given the potential attractiveness of HVDC solutions, those responsible for investing in grid infrastructure (such as integrated utilities or unbundled network companies) may need to keep their investment programmes under review. Changes in the nature of the grid and the technologies connected to it may mean that HVDC becomes a contender to traditional AC network investments where the conditions are right, such as where power generated by non-synchronous generators (e.g., wind and solar farms) is being moved over long distances and in particular where it is impractical to build new conventional terrestrial transmission lines.
As noted above, this is already happening today in the UK. While many early links to offshore windfarms relied on AC technology, ENTSO-E’s Offshore Network Development Plan (ONDP) has adopted HVDC as a standard transmission technology, with 525 kV VSC converter technology. Following the precedent of the Eastern Green Link projects, it looks likely that 525 kV HVDC may become the standard for the significant GB offshore network investment planned in the North Sea, as well as interconnectors (for example, Neuconnect).
The EGL projects were signed off after formal reviews of their costs and benefits, conducted separately from the normal regulatory regime for the GB transmission network. This underlines that considering the full range of technologies and making optimum choices with the right long-term strategic benefits may require extraordinary action by policymakers and regulators.
Traditionally, network regulation typically aims to incentivise grid companies to do what is cheapest, but regulatory incentives are typically less effective than those from competitive markets. For example, if new technologies carry more of an operational risk than the traditional options, and grid operators believe that regulators may penalise them for investments which fail to perform, they may act in an unduly risk-averse manner and just carry on doing what they have always done, particularly if new technologies are not as well understood as traditional ones; and, at least in the short term, choice of technologies may be affected by limitations in the supply chain for HVDC equipment, and in particular cables, while traditional HVAC infrastructure is more readily available.
Everyone would agree that regulators should protect customers’ interests. However, they also need to realise that, in a world of technical change, this sometimes means innovation and taking greater risks. While penalising failure (e.g., lower asset availability) or failing to allow companies to pay to reserve supply chain capacity may feel like the right strategy in the short term, this could act to stall innovation, which in turn might be against customers’ long-term interests. Striking the right balance is therefore critical.
The NeuConnect project (which we discuss in part 2 of this article) provides a good illustration of how regulators such as Ofgem have taken a flexible approach in adapting regulatory regimes to unlock private investment in HVDC infrastructure through revenue support arrangements.

Endnotes
[1] Today, General Electric’s successor GE Vernova is once again championing DC in the form of high voltage conversion systems to support HVDC cables that can transfer electricity point-to-point or from offshore wind farms to shore—more about this below.
[2] The environmental impact of using terrestrial overhead transmission lines for the entire length of one of the Eastern Green Links would likely be prohibitive. Terrestrial underground cables are estimated by Scottish Power to cost between five and ten times as much as overhead transmission lines; however, submarine cables are also significantly more expensive than overhead transmission lines.
[3] For example, Eastern Green Link 1 (EGL1) is almost 200 km long (including 176 km of subsea cable) and when completed will link East Lothian with County Durham, allowing the transfer of 2GW of electrical power. The UK is planning a series of such links, including four Eastern Green Links, and the Western HVDC Link between Scotland and North Wales (with a capacity of 2.25 GW) was completed in 2019.
[4] Comments on regulatory aspects were kindly provided by Dan Roberts of Frontier Economics.

Mandating English Proficiency for Truck Drivers: Trump EO Shifts Policy for Transportation Industry

Takeaways

A new EO reinstates enforcement of the English proficiency rule for drivers of commercial motor vehicles.
The EO directs the Department of Transportation to issue new guidance and revise inspection procedures.
Transportation industry employers should also be mindful of states requiring or considering English proficiency for drivers of commercial motor vehicles.

Foley Automotive Update and the Latest Tariff Developments

Trump Administration and Tariff Policies

The U.S. Commerce Department initiated a Section 232 investigation into imports of medium- and heavy-duty trucks and parts, in a development that could serve as a basis for future tariffs. Public comments must be received by May 16, 2025.
Bloomberg Law provided an explanation of the legal arguments in certain lawsuits that have been filed to challenge the Trump administration’s authority to impose tariffs. Most recently, a dozen states filed a lawsuit on April 23 over tariffs that were allegedly imposed without congressional authority. This follows suits over the legality of the tariffs filed by the New Civil Liberties Alliance, as well as California Governor Gavin Newsom and Attorney General Rob Bonta.
U.S. House Representative Mike Lawler (R-NY) on April 25 stated Congress “will likely exert more authority” if the White House does not make “significant progress” in ongoing tariff negotiations in the coming weeks.
President Trump warned he would veto a bipartisan Senate resolution led by Senator Ron Wyden (D-OR) and Senator Rand Paul (R-KY) that seeks to terminate the emergency declaration used as a basis for the president’s tariffs. A vote on the resolution could occur in the coming days.
A proposal by the U.S. Trade Representative’s office could impose fees on ships built, owned or operated by Chinese entities that dock at U.S. ports. If the proposal is implemented, the fees would begin in six months based on the volume of goods carried, on a per-voyage basis. The proposal intends to restore the U.S. maritime industry and it follows an investigation ordered under the Biden administration into whether Chinese shipbuilding threatens national security.

Automotive Key Developments

In an April 21 letter to the Trump administration, trade groups including MEMA, the Alliance for Automotive Innovation and the National Automobile Dealers Association outlined their concerns over the impact of import tariffs on automotive parts.
The Wall Street Journal and Bloomberg reported the Trump administration could ease the impact of certain automotive tariffs in ways that include temporary partial reimbursements and preventing certain auto levies from stacking on other duties.
Automotive News provided an overview of the opportunities and barriers involved in major production shifts to underutilized U.S. auto plants.
Many auto suppliers are encountering challenges regarding the complexities of calculating U.S. import tariffs on steel and aluminum, according to a report in Automotive News.
U.S. new light vehicles are projected to reach a SAAR of 17.9 million units in April 2025, representing a 10.5% year-over-year increase, according to a joint forecast from J.D. Power and GlobalData. The anticipated volume increase was attributed to consumers that have been accelerating purchase decisions due to expectation tariffs will lead to higher prices.
The National Highway Traffic Safety Administration’s (NHTSA) new Automated Vehicle (AV) Framework will expand the Automated Vehicle Exemption Program (AVEP) to include domestically produced vehicles, and streamline rules in regard to the reporting of safety incidents. The framework also intends to facilitate efforts to modernize the Federal Motor Vehicle Safety Standards.
The U.S. House could vote in the coming days on a measure to revoke a Biden-era Environmental Protection Agency waiver that allowed California to require increasing thresholds of zero-emissions vehicle sales between 2026 and 2035 in the state. U.S. House lawmakers previously introduced several Congressional Review Act resolutions that intend to repeal certain clean-vehicle waivers issued for California under the Biden administration. Senate Republicans are pursuing similar measures.

OEMs/Suppliers

Following a two-week shutdown to assess the impact of U.S. automotive import tariffs, Stellantis resumed production at its Windsor Assembly plant in Ontario, Sterling Stamping in Michigan and two transmission plants in Kokomo, Indiana. The automaker’s Jeep plant in Toluca, Mexico, is expected to remain idle through the end of April.
Volvo Group is preparing to lay off up to 1,000 workers at its North American truck operations in the coming months, amid uncertainty over how President Trump’s tariff policies will affect demand.
Ford halted exports to China of models that include the F-150 Raptor pickups and Bronco SUVs in response to the nation’s retaliatory import tariffs, according to a report in The Detroit News.
Volkwagen and Nissan expect to avoid tariff-related increases on U.S. vehicle prices through the end of May, and Ford indicated its vehicles will have higher prices by July or sooner as a result of the levies.
Hyundai intends to shift an unspecified volume of production of Tucson crossovers from Mexico to the U.S., and the automaker established a tariff task force to mitigate the effects of import duties on its finances.
GM plans to remove certain equipment for EV drive system production at its Toledo Propulsion Systems plant to increase capacity for gas-powered truck transmissions.
Toyota is reported to be considering a buyout of its parts supplier Toyota Industries, at an estimated valuation of $42 billion.
Nissan expects to incur a net loss of up to $5.3 billion for the fiscal year ended March, due to impairments and restructuring expenses, as well as declining sales.
Volkswagen’s Audi brand is reported to be close to a decision on whether to establish its first U.S. production site.
GM’s executive vice president of global manufacturing resigned after just over a year in the role.

Market Trends and Regulatory

The Federal Communications Commission on April 21 dismissed “as unnecessary the remaining cellular vehicle to everything (C-V2X) early transition waivers and confirm[ed] that each of the applicants may now seek a C-V2X authorization under the new rules.”
The U.S. Department of Transportation (USDOT) and Federal Highway Administration (FHWA) repealed a Biden-era rule that would have required state transportation departments to measure and establish declining targets for carbon dioxide emissions on federally supported highways.
The California New Car Dealers Association filed a lawsuit against Volkswagen Group and its affiliate Scout Motors over the brand’s plans to sell directly to consumers in violation of the state’s franchise laws.

Autonomous Technologies and Vehicle Software

Alphabet reported its autonomous vehicle unit Waymo is booking over 250,000 paid robotaxi rides weekly in San Francisco, Los Angeles, Phoenix, and Austin.
California’s Department of Motor Vehicles announced proposed regulations for the testing and deployment of self-driving heavy-duty vehicles on the state’s public roads.
Volkswagen will partner with Uber Technologies to launch autonomous rides with the electric ID. Buzz van beginning in Los Angeles next year.
Huawei Technologies Co. is a leading provider of intelligent driving software in China’s EV market, according to a report in Automotive News.

Electric Vehicles and Low-Emissions Technology

Automotive News assessed the ramifications of the Trump administration’s tariffs and trade policies on the U.S. EV industry.
BYD reported its first quarter 2025 revenue rose 36% YOY, supported by strong growth within China and overseas.
China’s Contemporary Amperex Technology Co. (CATL) debuted a next-generation battery that can reach up to 520 kilometers (323 miles) of range from five minutes of charging time. Competitor BYD recently developed batteries for certain models in China that would enable up to 400 kilometers (249 miles) of range with five minutes of charge time.
First quarter 2025 registrations of new battery-electric vehicles (BEVs) in the European Union increased 24% YOY for a 15% share of the total EU market. New EU registrations of hybrid-electric vehicles rose 21% YOY for a 35% share of the EU market. New car registrations across all powertrains declined 1.9% YOY in the region.

Missouri Enacts Significant Utility/Regulatory Omnibus Bill

On April 9, 2025, Missouri Governor Mike Kehoe signed into law a comprehensive Utility Omnibus Bill – Senate Bill 4 (SB 4 or the Bill). Among other things, the Bill significantly changes the regulated electric utility landscape. SB 4 establishes a statutory integrated resource planning framework, requires electrical corporations to add schedules governing large load customers to their tariffs, authorizes recovery of construction work in progress for the development of new natural gas generation facilities and establishes new standards for decommissioning large thermal generation assets.
Integrated Resource Planning
The last section of SB 4 modifies the integrated resource planning (IRP) process under what will become Section 393.1900 RSMo. The Bill makes filing an IRP a statutory requirement, rather than the current IRP process, which is codified by regulations administered by the Missouri Public Service Commission (MPSC). Under the current regulations, utilities file a new IRP every three years with an informational-only “Preferred Plan.” Every year between the triennial filings, utilities provide annual updates. The MPSC does not “approve” the Preferred Plan, and the utility can deviate from the Preferred Plan as long as it provides notice within 60 days of the utility’s determination of the need to deviate. Under the current regulations, adherence to the Preferred Plan does not meaningfully streamline the utility’s need to file for a certificate of convenience and necessity (CCN) prior to beginning construction on a new generation facility.
By contrast, under SB 4, utilities will file its IRP every four years, and CCN approvals will be streamlined if the utility can show consistency with their Preferred Plan. After holding a public hearing, the MPSC is specifically required to determine if the Preferred Plan “represents a reasonable and prudent means of meeting the electrical corporation’s load serving obligations at just and reasonable rates.” If such a finding is made, it “shall constitute the commission’s permission for the electrical corporation to construct or acquire the specified supply-side resources.” Before issuing a CCN, the MPSC will still assess the utility’s qualifications to construct and operate the resources, their ability to finance construction or acquisition of the resources, and siting consideration. The CCN process will be vastly expedited, requiring Commission action in 120-180 days. The IRP requirements of SB 4 begin in August 2027. The MPSC is directed to promulgate rules to implement the new IRP requirements, and such rules will need to be in place prior to August 2027.
Large Load Tariff Schedules
SB 4 requires electric utilities to submit schedules that govern large load customers to the MPSC for inclusion in the utility’s service tariffs. This provision will be codified at Section 393.130(7) RSMo. Utilities with over 250,000 customers must submit schedules for customers who are reasonably projected to exceed 100 megawatts (MW) of annual peak demand. Utilities with fewer than 250,000 customers must submit schedules for customers reasonably projected to exceed 50 MW of annual peak demand. The schedules should be designed to reflect these customers’ representative share of the costs incurred to serve them, to prevent other customer classes’ rates from reflecting any unjust or unreasonable costs arising from service to such customers.
Recovery of Construction Work in Progress for New Natural Gas Generation Facilities
While Missouri law has prohibited electric utilities from charging customers for the costs of construction of new facilities prior to their becoming operational, SB 4 allows electric utilities to recover construction work in progress (CWIP) in its rate base for new natural gas generation units. This provision is codified in new Section393.135(2) RSMo. The amount of CWIP that a utility may recover is limited by the estimated cost of the project and project expenditures made during the estimated construction period for the project. Any recovery of CWIP is subject to refund with interest if the MPSC determines that construction costs were imprudently incurred or if the project is not placed in service within a reasonable amount of time.
Furthermore, the CWIP recovery provision replaces other allowances for recovery of funds used during construction that may have otherwise been recoverable in the rate base for an electric utility. The rate base used to determine a deferred return under Section 393.1400.3(2) RSMo. will now include an offset for the amount of CWIP included in the rate base under Section 393.135.2.
The CWIP recovery provision will sunset in 2035 unless, in a hearing conducted in 2035, the MPSC chooses to extend the provision through 2045 based upon a submission from an electric utility demonstrating good cause for such an extension.
Decommissioning & Replacement of Generation Facilities
SB 4 prescribes a new practice for decommissioning and replacing thermal generation assets. This will be codified in Section 393.401 RSMo. Before closing an existing electric generating power plant on or after January 1, 2025, the electric utility must certify to the MPSC that it has secured and placed an equal or greater amount of reliable electric generation on the grid as accredited power resources based on the relevant regional transmission organization’s resource accreditation for the technology at issue and any loss of load expected by the utility. An “existing electric generating power plant” is defined as a thermal power plant (or generating unit/combination of generating units within a thermal power plant) with over 100 MW of nameplate capacity. Concurrent with the closure of the existing generation asset, the electric utility must have adequate electric transmission lines in place and the replacement reliable electric generation shall be fully operational, unless the new facility uses some or all of the interconnection facilities of the existing asset or the existing asset is closed due to an “unexpected or unplanned event.”
Under SB 4, “dispatchable power resources” shall comprise at least 80 percent of the average of the summer and winter accredited capacity of the replacement reliable electric generation. Section 393.401.2 RSMo. Furthermore, if “existing electric generating power plant” capacity is replaced pursuant to Section 393.401, its capacity shall not be replaced by “replacement resources” as defined in Section 393.1705 RSMo., which includes wind and solar energy. It is unclear from the statute to what extent, if any, renewable energy resources may comprise up to 20 percent of the replacement reliable electric generation.
Renewable Portfolio Standards
SB 4 amended Missouri’s Renewable Portfolio Standard (RPS) statute: Section 393.1030 RSMo. Renewable energy generated by an electric utility with between 250,000 and 1,000,000 retail customers in Missouri and contracted for by an “accelerated renewable buyer” cannot have its renewable energy certificates (RECs) used to meet the utility’s RPS requirements, and the RECs shall be retired by the accelerated renewable buyer. Evergy is the only electric utility that will be affected by this provision. An “accelerated renewable buyer” is an electric utility customer with an aggregate load over 80 MW that contracts to obtain RECs — as defined in Section 393.1025 RSMo. — or energy and RECs from solar or wind generation located within the Southwest Power Pool and placed into service after January 1, 2020. SB 4 exempts “accelerated renewable buyers” from any RPS compliance costs established by utilities regulated by this section and approved by the MPSC associated with the amount of credits retired pursuant to new Section 393.1030.2.

Old North State Report – April 21, 2025

UPCOMING EVENTS
April 22, 2025
NC Chamber Spring Member Roundtable – Asheville
April 24, 2025
RTAC – Association of Corporate Counsel Spring Reception – (Raleigh)
April 28, 2025
Thinkers Lunch: Rob Christensen
May 13, 2025
NC Chamber Business Summit on Mental Health
June 5, 2025
Triangle Business Journal 2025 State of Health Care in the Triangle
LEGISLATIVE NEWS
SENATE PASSES BUDGET PLAN
On Monday, the North Carolina Senate unveiled Senate Bill 257, their budget plan for state spending, which includes raising pay for teachers and state workers, advancing income tax cuts, and allocating funds for future Hurricane Helene recovery efforts. The GOP’s budget plan, spanning 440 pages, promises to cut out “waste” and “bloated” spending. The proposed budget for the next two years totals $32.6 billion for 2025-26 and $33.3 billion for the following year.
The budget designates $700 million for Hurricane Helene response and an additional $1.1 billion for the state’s “rainy day fund,” which could be used for more Helene aid or other expenses. This adds to the $1.5 billion already spent on recovery since the storm occurred six months ago.
Most state employees would receive a raise of 1.25% next year, along with $3,000 in bonuses over two years. Some employees in specific roles, especially correctional staff and law enforcement, would receive even larger raises with average increases set at 3.3% for teachers, 8.9% for correctional officers, 9.2% for Highway Patrol, and 14.4% for Alcohol Law Enforcement and SBI officers. The budget plan would include a review of state government spending, led by State Auditor Dave Boliek.
Other highlights from the proposal include:

An overall increase in funding for health care, including sizeable investments in the Medicaid Contingency Reserve, reflective of Medicaid expansion.
A $535.5 million investment in a new 500-bed pediatric hospital with UNC Health and Duke Health.
$25 million to reinstate coverage of GLP-1 weight-loss drugs for certain state workers.
Overhauls to NCInnovation’s funding model, asking for the return of $500 million the organization received from the state in 2023.
Additional funds for teacher signing bonuses, mentorship programs, and initiatives to improve reading scores.
Doubling the tax rate for sports betting operators from 18% to 36%.
Allocating $3.5 billion over two years to the State Capital Infrastructure Fund, which finances construction initiatives at universities.
Reducing the income tax rate to 3.49% in 2027 and 2.99% in 2028, with potential for further reductions.
Increasing unemployment benefits to $400 per week.
Establishing a fund for state veterans’ cemeteries within the Department of Military and Veterans Affairs.
Restoring the “Rainy Day” reserves fund to $4.75 billion.
Allocating $110 million for PFAS monitoring through the Department of Environmental Quality.
Designating $1.5 billion in federal funds for rural broadband internet.
Would Repeal the state’s Certificate of Need Law

The Senate passed the budget proposal on Thursday morning with a vote of 30-15, which included four Democrats voting with the Republican majority. The House is expected to release their proposed budget in May, with negotiations between the chambers following thereafter.
Read more be NC Newsline
Read more by WRAL News (Doran) (4/15/25)
Read more by WRAL News (Doran) (4/17/25)
Read more by News & Observer (4/15/25)
Read more by News & Observer (4/16/25)
HOUSE PASSES REINS ACT
The North Carolina House of Representatives has passed House Bill 402, known as the “Regulations from the Executive in Need of Scrutiny (REINS) Act. ” This bill increases legislative control over state agency rulemaking, requiring approval from the North Carolina General Assembly for any regulation with economic impacts over $1 million. The House passed the bill with a 68-44 vote, gaining support from all Republicans and one Democrat.
Representative Allen Chesser (R-Nash) stated that the bill makes lawmakers accountable for significant regulatory decisions, providing citizens with someone to hold responsible. “Right now, we’ve got over 110,000 regulations on the books in North Carolina, and almost 100% of them pass through our current system,” Chesser explained on the House floor. “Very few would cross this threshold to where it comes into our body, where we get to get to review it. What we’re saying is that the people should have someone to hold accountable, and that should be us.”
Bill sponsors in the North Carolina General Assembly claim the REINS Act increases government accountability in regulatory reform, giving more power to the people and their representatives.
Chesser mentioned in committee that the final version is less intrusive than the original draft. However, Democrats opposing the bill raised concerns about possible constitutional issues regarding the separation of powers.
Read more by The Carolina Journal
MORE ACTION ON ENERGY POLICY
In 2021, the General Assembly required the Utilities Commission to take all reasonable steps to reach a 70% reduction in carbon dioxide emissions from electric public utilities in North Carolina by 2030 and carbon neutrality by 2050. Senate Bill 261, passed by the Senate on March 13, would eliminate the interim 70% goal. The bill would also allow public utilities to increase base rates to recapture costs for construction work in process outside the general rate case process. Language similar to Senate Bill 261 was included in the Senate’s proposed budget.
Read more by The Carolina Journal
Read more by NC Newsline
EMPLOYMENT PREFERENCE FOR MILITARY VETERANS COULD EXPAND
A bill to expand hiring preferences for military veterans, their spouses, and dependents in state government received a favorable hearing in the Committee on Homeland Security and Military and Veterans Affairs. House Bill 114 aims to improve current law by:

Removing the requirement that service must relate to a war period.
Including those on active duty.
Including members of the U. S. Armed Forces Reserve.
Including spouses or dependents of qualified individuals.

Representative Charles Smith (D-Cumberland), a co-sponsor, stated that the bill modernizes outdated laws, as veterans currently must have served during wartime, with the Vietnam War defined as the last such conflict. “Time has passed, and so to expand that preference to a greater pool of veterans, it strips away that language [defining the Vietnam War as the nation’s last],” Smith said.
Expanding preferences could help fill job vacancies in the state government. The veteran unemployment rate was 3.7% in March, with 84,900 civilian federal employees in North Carolina, including 28,000 veterans and 33,200 spouses of veterans or active-duty members. A quarter of the VA’s 482,000 employees are veterans.
The bill has been sent to the House Committee on Commerce and Economic Development.
Read more by NC Newsline
HOME GAMING LEGISLATION ADVANCES
House Bill 424 aims to make home card and dice games legal, although some critics worry it could lead to high-stakes gambling. The bill states that North Carolina’s gambling rules do not apply to recreational games in private homes or clubhouses.
The bill’s sponsor, Representative David Willis (R-Union), introduced it after a HOA board complaint about a card game at a public clubhouse. It allows people to play games for money in a private setting, but no mechanical devices can be used, and only personal winnings are allowed.
The bill, which passed a committee on April 1, has new restrictions for charitable game nights, limiting them to 24 per year and no more than two per week. An amendment was suggested to limit high-stakes gambling. The updated bill was approved and sent to the Rules Committee.
Read more by State Affairs Pro
BILL BANNING SOCIAL MEDIA FOR MINORS PASSES HOUSE COMMITTEE
A bill to ban social media for minors under age 14 has passed the House Commerce and Economic Development Committee. House Bill 301 requires parental consent for teens aged 14 and 15 to create social media accounts. The bill holds social media platforms accountable for removing unauthorized accounts and deleting personal data.
Platforms must verify user ages and can face fines up to $50,000 for violations. The NC Department of Justice can investigate and enforce compliance, with proceeds from penalties funding the state’s Civil Penalty and Forfeiture Fund.
The bill’s sponsor, Jeff Zenger (R-Forsyth), pointed out the strong support for the bill from parents of different political views. “One thing that’s been interesting is the overwhelming support from parents across the political spectrum. I didn’t expect such unanimous approval, but it’s been clear that parents are fully behind this.”
Some lawmakers are concerned about enforcement, but Zenger argues that action is necessary for children’s safety.
Read more by The Carolina Journal

Foley Automotive Update and the Latest Insights on Tariffs

Special Update — Trump Administration and Tariff Policies

President Trump on April 14 told reporters he was “looking at something to help some of the car companies” regarding tariffs, and noted “they’re switching to parts that were made in Canada, Mexico and other places, and they need a little bit of time, because they’re going to make them here.” Further details have not been provided and it is unclear if the statements referred to aspects of the executive order imposing a 25% U.S. import tariff on fully assembled automobiles (effective April 3) or the 25% levies on certain major auto parts (scheduled to take effect no later than May 3).
The Canadian government on April 15 announced it will allow automakers to import certain U.S.-manufactured cars and trucks without tariffs, provided the vehicles are compliant with the Canada-U.S.-Mexico Agreement (CUSMA), and companies operating in the nation do not shift their vehicle production out of Canada. Canada had previously imposed a 25% retaliatory tariff on vehicles imported from the U.S. that are not compliant with the CUSMA.
China raised tariffs on all U.S. goods from 84% to 125% effective April 12, and stated that since “American goods are no longer marketable in China under the current tariff rates, if the U.S. further raises tariffs on Chinese exports, China will disregard such measures.” This follows the Trump administration’s implementation of a 125% “reciprocal” duty on many Chinese imports imposed on top of an existing 20% levy on goods imported from China.
China’s decision to impose export restrictions for certain rare earth minerals and magnets has caused shipments to halt at many Chinese ports pending the establishment of a new regulatory system for the materials. This development could impact automotive supply chains and a range of other sectors.
President Trump on April 15 issued an executive order launching a Section 232 national security investigation into the United States’ reliance on imports of processed critical minerals and derivative products. The U.S. is significantly reliant on China for the processing of many types of rare earth metals.
The Trump administration began investigations into imports of certain semiconductors, and the assessment could result in new tariffs.
The European Commission on April 10 announced a 90-day postponement of its plan to implement counter-tariffs on $23 billion worth of U.S. goods, noting the EU preferred negotiations to escalating trade wars.
Six Senate Democrats, along with Sen. Rand Paul (R-KY), on April 8 announced a privileged resolution to force a floor vote over whether to revoke the emergency declaration used as a basis for President Trump’s tariffs. A vote could occur sometime after the Senate returns from a two-week break, according to an update in POLITICO.
U.S. Senators Chuck Grassley (R-IA) and Maria Cantwell (D-WA) on April 4 introduced legislation that would require the President to notify Congress of coming tariffs within 48 hours of such an imposition and congressional approval within 60 days.
U.S. House Rep. Don Bacon (R-NE) on April 7 introduced legislation that would restrict President Trump’s authority to unilaterally impose tariffs. The bipartisan bill has two Republican co-sponsors.

Automotive Key Developments

Automotive News provided overviews of which auto parts and vehicles could be the most susceptible to U.S. import tariffs or Canadian counter-tariffs.
The Wall Street Journal provided updated analysis on the estimated impact of new tariffs on the revenues of the top automakers.
S&P Global Mobility on April 14 downgraded its U.S. new light-vehicle sales forecasts by 700,000 units in 2025, 1.2 million units in 2026, and 930,000 units in 2027 due to their expectation that “persistent, high tariffs” are the “next phase of normal.” Prior to the downgrade, S&P projections published on March 27 indicated U.S. light-vehicle sales could fall to a range of 14.5 and 15 million units annually if tariffs are maintained.
Goldman Sachs lowered its projection for 2025 U.S. new vehicle sales to 15.4 million units, from a previous forecast of 16.25 million units. New vehicle sales in 2026 were revised by 1.1 million units to 15.25 million units.
Anderson Economic Group estimated a U.S. consumer impact of $30 billion would result from the Trump administration’s 25% automotive import tariffs if the duties are maintained for a full year.
New vehicle sales in Canada could decline by 25% in 2025, according to revised projections from the Canadian Automobile Dealers Association (CADA).
The Wall Street Journal referred to Michigan’s economy as “the first victim of Trump’s trade war,” as the state ranks fifth in the nation measured by the size of its imports and exports.
First-quarter 2025 U.S. new light-vehicle sales increased 4.4% year-over-year, and EV sales rose by an estimated 11.4% YOY, as consumers accelerated purchases ahead of the expectation for higher prices due to tariffs.
First-quarter 2025 U.S. vehicle sales were up 17% YOY for GM, 10% for Hyundai, 7% for Volkswagen, 5.7% for Nissan, 5% for Honda, and 1% for Toyota. Sales declined 12% for Stellantis and 1% for Ford.
U.S. House lawmakers introduced several Congressional Review Act resolutions that intend to repeal certain clean-vehicle waivers issued for California under the Biden administration. Senate Republicans are pursuing similar measures.
Governor Gavin Newsom and California Attorney General Rob Bonta announced they have filed a lawsuit to challenge President Trump’s authority to impose tariffs. The New Civil Liberties Alliance filed a separate suit that alleged the President illegally imposed certain tariffs on Chinese goods.

OEMs/Suppliers

Stellantis will temporarily lay off approximately 900 U.S. workers in Michigan and Indiana and idle certain plants in Canada and Mexico to evaluate the effects of the Trump administration’s automotive import tariffs.
Over 6,000 workers in Canada’s auto sector have received temporary layoff notices since President Trump’s tariffs on automobile imports took effect on April 3.
GM on April 3 announced plans to hire hundreds of temporary employees to support increased production of light-duty trucks at its Fort Wayne, Indiana, assembly plant.
Stellantis and Ford are offering employee discount pricing to U.S. consumers, and Hyundai has pledged to freeze its prices until June, amid expectations tariffs will raise prices for new vehicles.
Two European-headquartered suppliers will require upfront payment from their customers to cover the cost of import duties.
European automakers are exploring a range of responses to U.S. import tariffs such as pausing shipments of certain vehicles, shifting production, and raising prices.
BMW, Mercedes-Benz, and Volvo are among the automakers that have indicated they may consider increased production in the U.S. to mitigate the effects of import tariffs.
Nissan halted orders for sales of certain Mexican-built Infiniti SUVs in the U.S. market due to the Trump administration’s automotive import tariffs.
Continental is exploring a separation of its ContiTech industrial unit to focus on its more profitable tire business.
Infineon Technologies AG will acquire Marvell Technology’s automotive Ethernet business for $2.5 billion, in a deal that is expected to expand the German company’s automobile technology capabilities.
Toronto-based ABC Technologies Inc. completed its acquisition of U.K.-based TI Fluid Systems. Rebranded as TI Automotive, the combined entities will have a revenue of $5.4 billion and will be headquartered in Auburn Hills, Michigan.

Market Trends and Regulatory

President Trump directed the Committee on Foreign Investment in the United States (CFIUS) to conduct a review of Nippon Steel’s proposed acquisition of U.S. Steel to determine if “further action” is appropriate. This follows an order prohibiting the acquisition issued by President Biden on January 3, 2025.
Retail sales of passenger cars in China rose 14.4% in March 2025 from a year earlier, according to analysis from the China Passenger Car Association.
U.S. Senator Elissa Slotkin (D-MI) introduced the Connected Vehicle National Security Review Act “to establish a national security review process for imports of internet-connected vehicles and components made by companies from China or other countries of concern.” Slotkin introduced a similar proposal as a member of the U.S. House in 2024, and she indicated the Senate bill would expand upon a Commerce Department final rule that prohibits the import and sale of connected vehicles and related components linked to the People’s Republic of China (PRC) and Russia.
A bipartisan “right to repair” bill was introduced in the U.S. Senate this month, and this follows similar legislation presented in the U.S. House in February 2025.
The cost of car repairs has increased by an estimated 27% in the last three years, and consumers could be impacted by higher repair costs if tariffs on auto parts are imposed in the coming weeks.

Autonomous Technologies and Vehicle Software

Autonomous trucking developer Kodiak Robotics plans to go public in a SPAC deal valuing the company at $2.5 billion.
Self-driving startup Nuro Inc. raised $107 million in a Series E funding round in a deal that is intended to help scale its autonomous driving technology and establish commercial partnerships.
Autonomous tech company Aurora Innovation intends to launch in Texas this month its first self-driving tractor-trailer without an operator.
China may prohibit the terms “smart driving” and “autonomous driving” in certain types of vehicle advertisements amid increased scrutiny in the nation over the safety of advanced driving assistance systems (ADAS), according to a report in Reuters.

Electric Vehicles and Low-Emissions Technology

To align production with demand, GM will temporarily lay off roughly 200 workers at its Factory Zero EV plant in Detroit, and the automaker will pause production of the BrightDrop electric van at its CAMI plant in Ontario.
Tesla stopped accepting orders in China for certain EV models imported from the U.S. following the imposition of China’s retaliatory 125% import tariff on American goods.
Atlas Public Policy estimated that over $7 billion in clean manufacturing projects in the U.S. were canceled in the first quarter of 2025, including over $2 billion for plants dedicated to EV supply chains.
The U.S. is projected to have at least 200,000 high-speed public chargers in place by 2030, down from previous expectations of 400,000, due to the Trump administration’s suspension of federal funding for the installation of charging stations.
Kia is developing an electric pickup truck for the North American market, with a goal of selling 90,000 units annually. The automaker hopes to sell 1.26 million EVs globally by 2030, down from a previous target of 1.6 million.
A Delaware bankruptcy judge approved the sale of Nikola’s Arizona factory and headquarters to Lucid Motors for $30 million.
The European Union is assessing options to replace recently imposed tariffs on Chinese-made EVs with minimum prices for the imported vehicles, according to an update from the European Commission.

Powering Africa’s Digital Future: The Challenge of Energy for Data Center Development

As the global economy increasingly digitizes, the infrastructure supporting this shift must evolve accordingly. In Africa, where the demand for digital services is surging — fueled by mobile penetration, fintech innovation, and a young, connected population — the case for expanding data center capacity is clear. However, the continent’s potential is hindered by underdeveloped energy infrastructure, presenting a significant bottleneck.
Why Data Centers Matter
Data centers form the backbone of digital transformation, underpinning cloud storage, AI applications, e-commerce platforms, and digital government services. According to the International Energy Agency (IEA), global electricity consumption by data centers is projected to exceed 800 TWh by 2026, up from 460 TWh in 2022. A significant portion of this demand comes from generative AI and machine learning applications, which consume up to 10 times more energy than traditional searches.
Africa, despite being one of the fastest-growing regions for digital adoption, accounts for less than 1% of the world’s data center capacity. The Africa Data Centres Association estimates that the continent requires at least 1,000 MW of new capacity across 700 facilities to meet demand. Yet, meeting this need will depend not only on digital infrastructure investments but also on solving a persistent and costly energy challenge.
The Energy Challenge: Costs, Capacity, and Volatility
Data center development will play a pivotal role in ensuring digital sovereignty and fostering a resilient, domestically-driven digital economy in Africa.
Sub-Saharan Africa exemplifies both the promise and the challenges of this transformation. While demand for digital services is accelerating, access to reliable energy remains a major obstacle. Many countries across the region grapple with limited energy access, high electricity costs, and outdated infrastructure characterized by frequent outages and heavy reliance on imported fuel sources.
This interplay of costs and reliability poses significant challenges for energy-intensive data centers. According to recent industry analysis, energy supply has emerged as the single most critical issue facing digital infrastructure investors. As demand for electricity rises—driven by AI, cloud computing, and the digitization of public services—grid expansion is struggling to keep pace. As a result, securing reliable, affordable power is now a top strategic priority for data center developers and investors alike.
Despite these challenges, several sub-Saharan countries—including Côte d’Ivoire, Gabon, and Senegal—are making significant progress. While legacy grid issues persist, these countries are actively investing in renewable energy projects that could create the enabling environment needed for sustainable data center growth.

Côte d’Ivoire: In June 2023, the country launched its largest solar power plant in Boundiali, delivering 37.5 MWp of capacity with an expansion target of 83 MWp by 2025. This project aligns with Côte d’Ivoire’s national goal to source 45% of its electricity from renewable energy by 2030.
Senegal: The Taiba N’Diaye Wind Farm, commissioned in 2021, is West Africa’s largest wind energy project, with a total capacity of 158 MW. It plays a central role in Senegal’s broader strategy to diversify its energy mix and reduce dependence on imported fossil fuels.
Gabon: Though less frequently spotlighted, Gabon is actively positioning itself as a renewable energy leader in Central Africa. In 2021, the government launched a hydropower development strategy to boost clean energy capacity. Notably, the Kinguélé Aval Hydroelectric Project, co-financed by the African Development Bank and IFC, will add 35 MW of capacity upon completion and help stabilize electricity supply in the Estuaire province, home to Libreville—the capital and potential hub for digital infrastructure. Gabon has also attracted investment in solar hybrid systems for rural electrification, aiming to reduce diesel reliance and support the decentralization of energy access. These initiatives create a more stable power framework suitable for future data center deployment.

Lessons from Leading Data Center Markets
Morocco is emerging as a pivotal player in North Africa’s data center market, driven by international energy investments and its strategic position connecting Europe, Africa, and the Middle East. Major global tech companies, including Oracle, Microsoft, Google, and Amazon Web Services (AWS), are drawn to Morocco’s rapidly expanding digital economy and its modern infrastructure. The country is fostering a favorable environment for data center growth through government-backed initiatives that enhance ICT infrastructure, making Morocco an attractive destination for both local and international data center operators.
The country’s stability and investments in renewable energy further position it as a sustainable choice for data center operations. With projects like those from Africa Data Centres, Gulf Data Hub, and N-ONE Datacenters, Morocco’s growing data center ecosystem is poised to meet the increasing demand for cloud computing and data storage across North Africa and beyond. By 2028, Morocco is expected to be a key hub for digital services, offering world-class data center facilities.
Looking to other pioneers in the continent, countries like Kenya and South Africa offer valuable lessons. Kenya, rich in geothermal resources, has attracted significant investments such as a $1 billion geothermal-powered data center from Microsoft and G42. This clean, non-intermittent energy solution provides a reliable power source for data centers. Similarly, South Africa is leading solar integration, with projects like the 12 MW solar farm being developed by Africa Data Centres and Distributed Power Africa, designed to power critical centers like Johannesburg and Cape Town. Such initiatives showcase the potential for public-private partnerships to address challenges of grid unreliability and position Africa as a growing leader in sustainable data center infrastructure.
These examples underscore the importance of strategic planning, infrastructure investment, and the integration of renewable energy sources in building resilient, sustainable data centers.
Policy and Legal Implications
From a legal perspective, developing a data center project requires meticulous contractual structuring. Long-term Power Purchase Agreements (PPAs) and Behind-the-Meter (BtM) agreements introduce project-specific risks — notably, the risk that delays in one part of the project (either the power plant or the data center) could lead to disruptions. Legal advisors must anticipate and address potential regulatory challenges, grid permitting complexities, and the need for future-proofing clauses to safeguard the project’s viability.
A comprehensive review of existing legislation, identification of key obstacles, and potential time-consuming issues (such as securing land) are crucial steps in ensuring the project’s success. Moreover, structuring energy supply projects to support data center operations is fundamental for ensuring the project’s bankability.
Conclusion: A Call to Action
Africa stands at a crossroads: with the right investments in both digital and energy infrastructure, the continent could leapfrog into a new era of economic autonomy and technological resilience. However, if energy bottlenecks are not addressed head-on, Africa risks falling behind just as the world accelerates into a data-driven future.
The roadmap is clear: invest in renewables, embrace innovative models like BtM PPAs, partner across sectors, and establish clear regulatory frameworks. Energy is no longer a background concern for digital infrastructure investors — it is the cornerstone. Data center growth and power sector development must now proceed hand-in-hand.
For Africa, this is not just a technical challenge — it is a strategic imperative.