FERC conditionally grants incentives for New York transmission line

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The Federal Energy Regulatory Commission (FERC) recently approved incentive rates for the New York Regional Interconnect (NYRI) on condition that the New York State Public Service Commission determines the 190-mile transmission line either ensures reliability or reduces congestion, and approves siting for the project.

"FERC recognizes the need for and promotes greater investment in energy infrastructure to strengthen and improve reliability of the transmission grid," FERC Chairman Joseph T. Kelliher said. "We will only approve incentive rate proposals that satisfy the requirements of the Federal Power Act and our regulations."

The action involves rates for the project. NYRI has not made any requests of FERC for federal siting approval. "That issue properly lies before the New York State Commission, and our approval today rests on the New York State Commission's approval of the proposed project," Kelliher said.

FERC's conditional rate approval includes a 275 basis point, or 2.75 percent, addition to the return on equity (ROE) that will be earned by the company. That incentive includes: 50 basis points for future participation in the New York Independent System Operator, Inc. (NYISO); 100 basis points for forming an independent transmission company (transco); and 125 basis points for a combined transmission and advanced technology incentive.

FERC did not set the base ROE, but said the 2.75 percent adder would be granted "subject to the ROE being within the zone of reasonable returns." This will be determined when NYRI makes a future rate filing under the section 205 of the Federal Power Act. The adders are intended to enable NYRI to attract investment necessary to develop the project.

NYRI is a privately owned corporation that plans to finance, construct and maintain the 190-mile high-voltage line to gain access to New York energy markets within NYISO. NYRI estimates that the cost of the project may reach $2.1 billion; it expects the line to be in service by 2012.

FERC transmission incentive Order No. 679 allows an applicant to seek incentive rates if it can demonstrate that the proposed facilities either ensure reliability or lower the cost of delivered power by reducing transmission congestion. Order No. 679 implements section 1241 of the Energy Policy Act of 2005. That law added a new section 219 to the Federal Power Act that directed FERC to establish incentive-based rate treatments for new transmission construction.

Under FERC policy, the proposed incentive rate must demonstrate a nexus between the incentive sought and investment being made. Evaluation of incentive rate proposals must be fact-specific and rely on the FERC regulations.

"Given that the project proposes to make use of several advanced technologies and given the significant financial risk and regulatory challenges facing the project, the Commission finds that it is just and reasonable to grant a 125 basis point ROE adder, subject to NYRI's ROE being within the zone of reasonable returns," FERC said with respect to the combined transmission and advanced technology incentive.

The project is not routine and meets the requirements to be eligible for incentives under Order No. 679, FERC said. The order notes the scope of the project in terms of "size, investment cost, regulatory involvement, the nature of the facilities, and the project's risks."

FERC dismissed as premature comments related to rate impacts and cost allocations. If the project is approved and NYRI makes a rate filing with FERC, then FERC will evaluate those rate issues.

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Crews have restored power to more than 32,000 Gulf Power customers

Gulf Power Hurricane Michael Response details rapid power restoration, grid rebuilding, and linemen support across the Florida Panhandle, Panama City, and coastal areas after catastrophic winds, rain, and storm surge damaged transmission lines and substations.

 

Key Points

Gulf Power's effort to restore electricity after Hurricane Michael, including grid rebuilding and storm recovery.

✅ 3,000+ crews deployed for restoration and rebuilding

✅ Transmission, distribution, and substations severely damaged

✅ Panhandle customers warned of multi-week outages

 

Less than 24 hours ago, Hurricane Micheal devastated the residents in the Florida Panhandle with its heavy winds, rainfall and storm surge, as reflected in impact numbers across the region.

Gulf Power crews worked quickly through the night to restore power to their customers.

Linemen crews were dispatched from numerous of cities all over the U. S., reflecting FPL's massive Irma response to help those impacted by Hurricane Michael.

According to Jeff Rogers, Gulf Power spokesperson; “This was an unprecedented storm, and our customers will see an unprecedented response from Gulf Power. The destruction we’ve seen so far to this community and our electrical system is devastating — we’re seeing damage across our system, including distribution lines, transmission lines and substations.”

Gulf Power told Channel 3 said they dealt with issues like trees and heavy debris blocking roads from strong winds, and communications down can slow down the rebuilding and restoration process, but Gulf Power said they are prepared for this type of storm devastation.

According to Gulf Power, Hurricane Micheal caused so much damage to Panama City's electrical grid that crews not only had repair the lines, they had to rebuild the electrical system, a scenario similar to a complete rebuild seen after Hurricane Laura in Louisiana.

Gulf Power officials say, "Less than 24 hours after the storm, more than 3,000 storm personnel from around the country arrived in the Panama City area Thursday to begin the restoration and rebuilding process. So far, more than 4,000 customers have been restored on Panama City Beach. Power has been restored to all customers in Escambia, Santa Rosa and Okaloosa counties, and it’s expected that customers in Walton County will be restored tonight. But customers in the hardest hit areas should prepare to be without power for weeks, not days in some areas. Initial evaluations by Gulf Power indicate widespread, heavy damage to the electrical system in the Panama City area."

According to Gulf Power, crews have restored power to more than 32,000 Gulf Power customers in the wake of Hurricane Michael, but the work is just beginning for power restoration in the Panama City area.

Rogers said, “We’re heartbroken for our customers and our teammates who live in and near the Panama City area,” said Rogers. “This is the type of storm that changes lives — so aside from restoring power to our customers quickly and safely, our focus in the coming days and weeks will also be to help restore hope to these communities and help give them a sense of normalcy as soon as possible.”

 

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Why Is Central Asia Suffering From Severe Electricity Shortages?

Central Asia power shortages strain grids across Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan, and Turkmenistan, driven by drought-hit hydropower, aging coal and gas plants, rising demand, cryptomining loads, and winter peak consumption risks.

 

Key Points

Regionwide blackouts from drought, aging plants and grids, rising demand, and winter peaks stressing Central Asia.

✅ Drought slashes hydropower in Kyrgyzstan, Tajikistan, Uzbekistan

✅ Aging coal and gas TPPs and weak grids cause frequent outages

✅ Cryptomining loads and winter heating spike demand and stress supply

 

Central Asians from western Kazakhstan to southern Tajikistan are suffering from power and energy shortages that have caused hardship and emergency situations affecting the lives of millions of people.

On October 14, several units at three power plants in northeastern Kazakhstan were shut down in an emergency that resulted in a loss of more than 1,000 megawatts (MW) of electricity.

It serves as an example of the kind of power failures that plague the region 30 years after the Central Asian countries gained independence and despite hundreds of millions of dollars being invested in energy infrastructure and power grids, and echo risks seen in other advanced markets such as Japan's near-blackouts during recent cold snaps.

Some of the reasons for these problems are clear, but with all the money these countries have allocated to their energy sectors and financial help they have received from international financial institutions, it is curious the situation is already so desperate with winter officially still weeks away.


The Current Problems
Three power plants were affected in the October 14 shutdowns of units: Ekibastuz-1, Ekibastuz-2, and the Aksu power plant.

Ekibastuz-1 is the largest power plant in Kazakhstan, capable of generating some 4,000 MW, roughly 13 percent of Kazakhstan’s total power output.

The Kazakhstan Electricity Grid Operating Company (KEGOC) explained the problems resulted partially from malfunctions and repair work, but also from overuse of the system that the government would later say was due to cryptominers, a large number of whom have moved to Kazakhstan recently from China after Beijing banned the mining needed by Bitcoin and other cryptocurrencies, amid its own China's power cuts across several provinces in 2021.

But between November 8 and 9, rolling blackouts were reported in the East Kazakhstan, North Kazakhstan, and Kyzylorda provinces, as well as the area around Almaty, Kazakhstan’s biggest city, and Shymkent, its third largest city.

People in Uzbekistan say they, too, are facing blackouts that the Energy Ministry described as “short-term outages,” even as authorities have looked to export electricity to Afghanistan to support regional demand, though it has been clear for several weeks that the country will have problems with natural gas supplies this winter.


Power lines in Uzbekistan
Kyrgyz President Sadyr Japarov continues to say there won't be any power rationing in Kyrgyzstan this winter, but at the end of September the National Energy Holding Company ordered “restrictions on the lighting of secondary streets, advertisements, and facades of shops, cafes, and other nonresidential customers.”

Many parts of Tajikistan are already experiencing intermittent supplies of electricity.

Even in Turkmenistan, a country with the fourth-largest reserves of natural gas in the world, there were reports of problems with electricity and heating in the capital, Ashgabat.


What Is Going On?
The causes of some of these problems are easy to see.

The population of the region has grown significantly, with the population of Central Asia when the Soviet Union collapsed in late 1991 being some 50 million and today about 75 million.

Kyrgyzstan and Tajikistan are mountainous countries that have long been touted for their hydropower potential and some 90 percent of Kyrgyzstan’s domestically produced electricity and 98 percent of Tajikistan’s come from hydropower.

But a severe drought that struck Central Asia this year has resulted in less hydropower and, in general, less energy for the region, similar to constraints seen in Europe's reduced hydro and nuclear output this year.

Tajik authorities have not reported how low the water in the country’s key reservoirs is, but Kyrgyzstan has reported the water level in the reservoir at its Toktogul hydropower plant (HPP) is 11.8 billion cubic meters (bcm), the lowest level in years and far less than the 14.7 bcm of water it had in November 2020.

The Toktogul HPP, with an installed capacity of 1,200 MW, provides some 40 percent of the country's domestically produced electricity, but operating the HPP this winter to generate desperately needed energy brings the risk of leaving water levels at the reservoir critically low next spring and summer when the water is also needed for agricultural purposes.

This year’s drought is something Kyrgyzstan and Tajikistan will have to take into consideration as they plan how to provide power for their growing populations in the future. Hydropower is a desirable option but may be less reliable with the onset of climate change, prompting interest in alternatives such as Ukraine's wind power to diversify generation.

Uzbekistan is also feeling the effects of this year’s drought, and, like the South Caucasus where Georgia's electricity imports have increased, supply shortfalls are testing grids.

According to the International Energy Agency, HPPs account for some 12 percent of Uzbekistan’s generating capacity.

Uzbekistan’s Energy Ministry attributed low water levels at HPPs that have caused a 23 percent decrease in hydropower generation this year.


A reservoir in Kyrgyzstan
Kazakhstan and Uzbekistan are the most populous Central Asian countries, and both depend on thermal power plants (TPP) for generating most of their electricity.

Most of the TPPs in Kazakhstan are coal-fired, while most of the TPPs in Uzbekistan are gas-fired.

Kazakhstan has 68 power plants, 80 percent of which are coal-fired TPPs, and most are in the northern part of the country where the largest deposits of coal are located. Kazakhstan has the world's 10th largest reserves of coal.

About 88 percent of Uzbekistan’s electricity comes from TTPs, most of which use natural gas.

Uzbekistan’s proven reserves are some 800 billion cubic meters, but gas production in Uzbekistan has been decreasing.

In December 2020, Uzbek President Shavkat Mirziyoev ordered a halt to the country’s gas exports and instructed that gas to be redirected for domestic use. Mirziyoev has already given similar instructions for this coming winter.


How Did It Come To This?
The biggest problem with the energy infrastructure in Central Asia is that it is generally very old. Nearly all of its power plants date back to the Soviet era -- and some well back into the Soviet period.

The use of power plants and transmission lines that some describe as “obsolete” and a few call “decrepit” has unfortunately been a necessity in Central Asia, even as regional players pursue new interconnections like Iran's plan to transmit electricity to Europe as a power hub.

Reporting on Kazakhstan in September 2016, the Asian Development Bank (ADB) said, “70 percent of the power generation infrastructure is in need of rehabilitation.”

The Ekibastuz-1 TPP is relatively new by the power-plant standards of Central Asia. The first unit of the eight units of the TPP was commissioned in 1980.

The first unit at the AKSU TPP was commissioned in 1968, and the first unit of the gas- and fuel-fired TPP in southern Kazakhstan’s Zhambyl Province was commissioned in 1967.

 

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UK National Grid Commissions 2GW Substation

UK 2-GW Substation strengthens National Grid power transmission in Kent, enabling offshore wind integration, voltage regulation, and grid modernization to meet rising electricity demand and support the UK energy transition with resilient, reliable infrastructure.

 

Key Points

National Grid facility in Kent that steps voltage, regulates power, and connects offshore wind to strengthen UK grid.

✅ Adds 2 GW capacity to meet rising electricity demand

✅ Integrates offshore wind farms into transmission network

✅ Improves reliability, voltage control, and grid resilience

 

The United Kingdom has strengthened its national power grid with the commissioning of a major new 2-gigawatt capacity substation in Kent. This massive project, a key part of the National Grid's ongoing efforts to modernize and expand power transmission infrastructure, including plans to fast-track grid connections across critical projects, will play a critical role in supporting the UK's energy transition and growing electricity demands.


What is a Substation?

Substations are vital components of electricity grids. They serve as connection points, transforming high voltage electricity from power plants to lower voltages suitable for homes and businesses. They also help to regulate voltage levels, and, where appropriate, interface with expanding HVDC technology initiatives, ensuring stable electricity delivery.  Modern substations often act as hubs, supporting the integration of renewable power sources with the main electricity network.


Why This Substation Is Important

The new 2-gigawatt capacity substation is significant for several reasons:

  • Expanding Capacity: It adds significant capacity to the UK's grid, enabling the transmission of large amounts of electricity to where it's needed. This capacity boost is crucial for supporting growing electricity demand as the UK shifts its energy mix towards renewable sources.
  • Integrating Renewables: The substation will aid in integrating substantial amounts of offshore wind power, as projects like the Scotland-England subsea link illustrate, helping the UK achieve its ambitious clean energy goals. Offshore wind farms are a booming source of renewable energy in the UK, and ensuring reliable connections to the grid is essential in maximizing their potential.
  • Future-Proofing the Grid: The newly commissioned substation helps bolster the reliability and resilience of the UK's power transmission network, where reducing losses with superconducting cables could further enhance efficiency. It will play a key role in securing electricity supplies as older power plants are decommissioned and renewable energy sources become more dominant.


A Landmark Project

The commissioning of this substation is a major achievement for the National Grid, amid an independent operator transition underway in the sector, and UK energy infrastructure upgrades. The sheer scale of the project required extensive planning and collaboration with various stakeholders, underscoring the complexity of upgrading the nation's power grid to meet future needs.


The Path Towards a Cleaner Grid

The new substation is not an isolated project. It is part of a broader, multi-year effort by the National Grid to modernize and expand the country's power grid.  This entails building new transmission lines and urban conduits such as London's newest electricity tunnel now in service, investing in storage technologies, and adapting infrastructure to accommodate the shift towards distributed energy generation, where power is generated closer to the point of use.


Beyond Substations

While projects like the new 2-gigawatt substation are crucial, ensuring a successful energy transition requires more than just infrastructure upgrades. Continued support for renewable energy development, highlighted by recent offshore wind power milestones that demonstrate grid-readiness, investment in emerging energy storage solutions, and smart grid technology that leverages data for effective grid management are all important components of building a cleaner and more resilient energy future for the UK.

 

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US nuclear innovation act becomes law

NEIMA advances NRC regulatory modernization, creating a licensing framework for advanced reactors, improving uranium permitting, capping reactor fees, and mandating DOE planning for excess uranium, boosting transparency, accountability, and innovation across the US nuclear sector.

 

Key Points

NEIMA is a US law modernizing NRC rules and enabling advanced reactor licensing while reforming fees.

✅ Modernizes NRC licensing for advanced reactors

✅ Caps annual reactor fees and boosts transparency

✅ Streamlines uranium permitting; directs DOE plans

 

Bipartisan legislation modernising US nuclear regulation and supporting the establishment of a licensing framework for next-generation advanced reactors has been signed by US President Donald Trump, whose order boosting U.S. uranium and nuclear energy underscored the administration's focus on the sector.

The Nuclear Energy Innovation and Modernisation Act (NEIMA) became law on 14 January.

As well as directing the Nuclear Regulatory Commission (NRC) to modify the licensing process for commercial advanced nuclear reactor facilities, the bill establishes new transparency and accountability measures to the regulator's budget and fee programmes, and caps fees for existing reactors. It also directs the NRC to look at ways of improving the efficiency of uranium licensing, including investigating the safety and feasibility of extending uranium recovery licences from ten to 20 years' duration, and directs the Department of Energy, which oversees nuclear cleanup and related projects, to issue at least every ten years a long-term plan detailing the management of its excess uranium inventories.

Maria Korsnick, president and CEO of the US Nuclear Energy Institute, described NEIMA as a "significant, positive step" toward the reform of the NRC's fee collection process. "This legislation establishes a more equitable and transparent funding structure which will benefit all operating reactors and future licensees," she said. "The bill also reaffirms Congress’s support for nuclear innovation by working to establish an efficient and stable regulatory structure that is prepared to license the advanced reactors of the future."

Marilyn Kray, president-elect of the American Nuclear Society, said the passage of the legislation was a "big win" for the nation and its nuclear community. "By reforming outdated laws, NRC will now be able to invest more freely in advanced nuclear R&D and licensing activities. This in turn will accelerate deployment of cutting-edge American nuclear systems and better prepare the next generation of nuclear engineers and technologists," she said.

The bill was introduced in 2017 by Senator John Barrasso of Wyoming. It was approved by Congress on 21 December by 361 votes to 10, having been passed by the Senate the previous day, even as later Biden's climate law developments produced mixed results.

NEIMA is one of several bipartisan bills that support advanced nuclear innovation considered by the 115th US Congress, which ended on 2 January. These are: the Nuclear Energy Innovation Capabilities Act (NEICA); the Nuclear Energy Leadership Act; the Nuclear Utilisation of Keynote Energy Act; the Advanced Nuclear Fuel Availability Act, a focus sharpened by the U.S. ban on Russian uranium in the fuel market; and legislation to expedite so-called part 810 approvals, which are needed for the export of technology, equipment and components. NEICA, which supports the deployment of advanced reactors and also directs the DOE to develop a reactor-based fast neutron source for the testing of advanced reactor fuels and materials, was signed into law in October.

 

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Is Hydrogen The Future For Power Companies?

Hydrogen Energy Transition accelerates green hydrogen, electrolyzers, renewables, and fuel cells, as the EU and US scale decarbonization, NextEra tests hydrogen-to-power, and DOE funds pilots to replace natural gas and cut CO2.

 

Key Points

A shift to deploy green hydrogen tech to decarbonize power, industry, and transport across EU and US energy systems.

✅ EU targets 40 GW electrolyzers plus 40 GW imports by 2030

✅ DOE funds pilots; NextEra trials hydrogen-to-power at Okeechobee

✅ Aims to replace natural gas, enable fuel cells, cut CO2

 

Last month, the European Union set out a comprehensive hydrogen strategy as part of its goal to achieve carbon neutrality for all its industries by 2050. The EU has an ambitious target to build out at least 40 gigawatts of electrolyzers within its borders by 2030 and also support the development of another 40 gigawatts of green hydrogen in nearby countries that can export to the region by the same date. The announcement came as little surprise, given that Europe is regarded as being far ahead of the United States in the shift to renewable energy, even as it looks to catch up on fuel cells with Asian leaders today.

But the hydrogen bug has finally arrived stateside: The U.S. Department of Energy has unveiled the H2@Scale initiative whereby a handful of companies including Cummins Inc. (NYSE: CMI), Caterpillar Inc.(NYSE: CAT), 3M Company (NYSE: MMM), Plug Power Inc.(NASDAQ: PLUG) and EV startup Nikola Corp.(NASDAQ: NKLA), even as the industry faces threats to the EV boom that investors are watching, will receive $64 million in government funding for hydrogen research projects.

Hot on the heels of the DoE initiative: American electric utility and renewable energy giant, NextEra Energy Inc.(NYSE: NEE), has unveiled an equally ambitious plan to start replacing its natural gas-powered plants with hydrogen.

During its latest earnings call, NextEra’s CFO Rebecca Kujawa said the company is “…particularly excited about the long-term potential of hydrogen” and discussed plans to start a pilot hydrogen project at one of its generating stations at Okeechobee Clean Energy Center owned by its subsidiary, Florida Power & Light (FPL). NextEra reported Q2 revenue of $4.2B (-15.5% Y/Y), which fell short of Wall Street’s consensus by $1.12B while GAAP EPS of $2.59 (+1.1% Y/Y) beat estimates by $0.09. The company attributed the big revenue slump to the effects of Covid-19.

Renewable energy and hydrogen stocks have lately become hot property as EV adoption hits an inflection point worldwide, with NEE up 16% in the year-to-date; PLUG +144%, Bloom Energy Corp. (NYSE: BE) +62.8% while Ballard Power Systems (NASDAQ: BLDP) has gained 98.2% over the timeframe.

NextEra’s usual modus operandi involves conducting small experiments with new technologies to establish their cost-effectiveness, a pragmatic approach informed by how electricity changed in 2021 across the grid, before going big if the trials are successful.

CFO Kujawa told analysts:
“Based on our ongoing analysis of the long-term potential of low-cost renewables, we remain confident as ever that wind, solar, and battery storage will be hugely disruptive to the country’s existing generation fleet, while reducing cost for customers and helping to achieve future CO2 emissions reductions. However, to achieve an emissions-free future, we believe that other technologies will be necessary, and we are particularly excited about the long-term potential of hydrogen.”

NextEra plans to test the electricity-to-hydrogen-to-electricity model at its natural gas-powered Okeechobee Clean Energy Center that came online in 2019. Okeechobee is already regarded as one of the cleanest thermal energy facilities anywhere on the globe. However, replacing natural gas with zero emissions hydrogen would be a significant step in helping the company achieve its goal to become 100% emissions-free by 2050.

Kujawa said the company plans to continue evaluating other potential hydrogen opportunities to accelerate the decarbonization of transportation fuel, amid the debate over the future of vehicles between electricity and hydrogen, and industrial feedstock and also support future demand for low-cost renewables.

Another critical milestone: NextEra finished the quarter with a renewables backlog of approximately 14,400 megawatts, its largest in its 20-year development history. To put that backlog into context, NextEra revealed that it is larger than the operating wind and solar portfolios of all but two companies in the world.

Hydrogen Bubble?
That said, not everybody is buying the hydrogen hype.

Barron’s Bill Apton says Wall Street has discovered hydrogen this year and that hydrogen stocks are a bubble, even as hybrid vehicles gain momentum in the U.S. market according to recent reports. Apton says the huge runup by Plug Power, Ballard Energy, and Bloom Energy has left them trading at more than 50x future cash flow, making it hard for them to grow into their steep valuations. He notes that smaller hydrogen companies are up against big players and deep-pocketed manufacturers, including government-backed rivals in China and the likes of Cummins.

According to Apton, it could take a decade or more before environmentally-friendly hydrogen can become competitive with natural gas on a cost-basis, while new ideas like flow battery cars also vie for attention, making hydrogen stocks better long-term picks than the cult stocks they have become.

 

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The Collapse of Electric Airplane Startup Eviation

Eviation Collapse underscores electric aviation headwinds, from Alice aircraft battery limits to FAA/EASA certification hurdles, funding shortfalls, and leadership instability, reshaping sustainability roadmaps for regional airliners and future zero-emission flight.

 

Key Points

Eviation Collapse is the 2025 shutdown of Eviation Aircraft, revealing battery, certification, and funding hurdles.

✅ Battery energy density limits curtailed Alice's range

✅ FAA/EASA certification timelines delayed commercialization

✅ Funding gaps and leadership churn undermined execution

 

The electric aviation industry was poised to revolutionize the skies through an aviation revolution with startups like Eviation Aircraft leading the charge to bring environmentally friendly, cost-efficient electric airplanes into commercial use. However, in a shocking turn of events, Eviation has faced an abrupt collapse, signaling challenges that may impact the future of electric flight.

Eviation’s Vision and Early Promise

Founded in 2015, Eviation was an ambitious electric airplane startup with the goal of changing the way the world thinks about aviation. The company’s flagship product, the Alice aircraft, was designed to be an all-electric regional airliner capable of carrying up to 9 passengers. With a focus on sustainability, reduced operating costs, and a quieter flight experience, Alice attracted attention as one of the most promising electric aircraft in development.

Eviation’s aircraft was aimed at replacing small, inefficient, and environmentally damaging regional aircraft, reducing emissions in the aviation industry. The startup’s vision was bold: to create an airplane that could offer all the benefits of electric power – lower operating costs, less noise, and a smaller environmental footprint. Their goal was not only to attract major airlines but also to pave the way for a more sustainable future in aviation.

The company’s early success was driven by substantial investments and partnerships. It garnered attention from aviation giants and venture capitalists alike, drawing support for its innovative technology. In fact, in 2019, Eviation secured a deal with the Israeli airline, El Al, for several aircraft, a deal that seemed to promise a bright future for the company.

Challenges in the Electric Aviation Industry

Despite its early successes and strong backing, Eviation faced considerable challenges that eventually contributed to its downfall. The electric aviation sector, as promising as it seemed, has always been riddled with hurdles – from battery technology to regulatory approvals, and compounded by Europe’s EV slump that dampened clean-transport sentiment, the path to producing commercially viable electric airplanes has proven more difficult than initially anticipated.

The first major issue Eviation encountered was the slow development of battery technology. While electric car companies like Tesla were able to scale their operations quickly during the electric vehicle boom due to advancements in battery efficiency, aviation technology faced a more significant obstacle. The energy density required for a plane to fly long distances with sufficient payload was far greater than what existing battery technology could offer. This limitation severely impacted the range of the Alice aircraft, preventing it from meeting the expectations set by its creators.

Another challenge was the lengthy regulatory approval process for electric aircraft. Aviation is one of the most regulated industries in the world, and getting a new aircraft certified for flight takes time and rigorous testing. Although Eviation’s Alice was touted as an innovative leap in aviation technology, the company struggled to navigate the complex process of meeting the safety and operational standards required by aviation authorities, such as the FAA and EASA.

Financial Difficulties and Leadership Changes

As challenges mounted, Eviation’s financial situation became increasingly precarious. The company struggled to secure additional funding to continue its development and scale operations. Investors, once eager to back the promising startup, grew wary as timelines stretched and costs climbed, amid a U.S. EV market share dip in early 2024, tempering enthusiasm. With the electric aviation market still in its early stages, Eviation faced stiff competition from more established players, including large aircraft manufacturers like Boeing and Airbus, who also began to invest heavily in electric and hybrid-electric aircraft technologies.

Leadership instability also played a role in Eviation’s collapse. The company went through several executive changes over a short period, and management’s inability to solidify a clear vision for the future raised concerns among stakeholders. The lack of consistent leadership hindered the company’s ability to make decisions quickly and efficiently, further exacerbating its financial challenges.

The Sudden Collapse

In 2025, Eviation made the difficult decision to shut down its operations. The company announced the closure after failing to secure enough funding to continue its development and meet its ambitious production goals. The sudden collapse of Eviation sent shockwaves through the electric aviation sector, where many had placed their hopes on the startup’s innovative approach to electric flight.

The failure of Eviation has left many questioning the future of electric aviation. While the industry is still in its infancy, Eviation’s downfall serves as a cautionary tale about the challenges of bringing cutting-edge technology to the skies. The ambitious vision of a sustainable, electric future in aviation may still be achievable, but the path to success will require overcoming significant technological, regulatory, and financial obstacles.

What’s Next for Electric Aviation?

Despite Eviation’s collapse, the electric aviation sector is far from dead. Other companies, such as Joby Aviation, Vertical Aerospace, and Ampaire, are continuing to develop electric and hybrid-electric aircraft, building on milestones like Canada’s first commercial electric flight that signal ongoing demand for green alternatives to traditional aviation.

Moreover, major aircraft manufacturers are doubling down on their own electric aircraft projects. Boeing, for example, has launched several initiatives aimed at reducing carbon emissions in aviation, while Harbour Air’s point-to-point e-seaplane flight showcases near-term regional progress, and Airbus is testing a hybrid-electric airliner prototype. The collapse of Eviation may slow down progress, but it is unlikely to derail the broader movement toward electric flight entirely.

The lessons learned from Eviation’s failure will undoubtedly inform the future of the electric aviation sector. Innovation, perseverance, and a steady stream of investment will be critical for the success of future electric aircraft startups, as exemplified by Harbour Air’s research-driven electric aircraft efforts that highlight the value of sustained R&D. While the dream of electric planes may have suffered a setback, the long-term vision of cleaner, more sustainable aviation is still alive.

 

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