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US: energy in La La land

By Dave Elliott

It is hard to know what will happen in the energy and climate policy area in the USA under Donald Trump’s presidency. Before his election he had famously rubbished climate change as a fraud and was clearly pretty hostile to renewables – and all things green. In office he has set about cutting support for climate-related US policies and has announced withdrawal from the COP21 Paris climate agreement. He has also sought cuts in government support for renewables in the US. But although federal support is important, many programmes are run at the state level and states may resist his directives. Companies may do too – renewables are increasingly profitable investments, and an area of rapid growth: just the sort of thing you would imagine he would like.

With wind and solar costs falling to around 2-3 cents/kWh in some locations, this looks like a sector that should be supported not cut. It also employs around 500,000 people in the USA, with expansion clearly underway. Solar employment grew by 32% last year, and it now employs nearly three times more people in power generation in the USA than fossil energy and over five times more than nuclear. Wind power employment grew 25% last year, and with new projects also going offshore its prospects look good. Although Trump has objected to wind power in the past, given his much touted business orientation, it would be difficult for him to ignore these expanding commercial and employment opportunities.

The Trump administration’s first formal statement on energy was couched in general terms. But his first executive actions in this area were fairly direct, backing the pipelines and sitting on the EPA/federal agency bureaucracy. Many federal-level programmes seemed to grind to a halt or clam up, at least initially. More was expected to come. And it did, with a block on new regulations – each new one had to replace two old ones.

There then followed a specific executive order seeking to dismantle most of Obama’s energy, environment and climate initiatives, including the Clean Power plan, which restricts carbon emissions from power plants. That attack on green legislation and regulation had already been predicted. But the reality was, in anything, even tougher, with Trump projecting it as an end of the ‘War on Coal’. It will be fought via the courts, given that it was seen by most environmentalists as a huge step backwards in the fight against climate change and environmental pollution.

Trump’s other main initiative was to cut funding. In his first budget proposal he evidently only managed to identify cuts of £100m from the planned 2018 allocation. Apparently Obama had managed to stash much of the climate/energy funding in hard-to-cut programme areas. But Trump persevered with up to 70% cuts now being sought in Department of Energy renewable energy and energy efficiency funding.

However, that is unlikely to get agreed in full and, in any case, it will take time to have an impact on actual projects. Myron Ebell, a renowned climate-sceptic who led Trump’s EPA transition team, said he saw no reason why the rapid growth of technologies such as solar and wind should not continue on an upward trajectory, but ‘for those people whose companies are dependent on mandates and subsidies, I really think that part of the economy is going to shrink, and it could shrink very rapidly’.

When it came to specific federally-backed projects, there were conflicting reports e.g. improving grid transmission infrastructure is meant to be a high priority for Trump, but would that survive if it was seen as aiding wind and other renewables? Will it get that petty? As demand for green power grows, so too will the need for upgraded grids – so this issue won’t go away.

Certainly renewables are now a major element in the US energy mix, accounting for nearly 20% of total installed US generating capacity, according to FERC, with hydropower at 8.5%, wind 6.9%, solar 2%, biomass 1.4% and geothermal 0.3%. For comparison, nuclear is at 9% and coal 24.6%. It’s not clear exactly what Trump will do about nuclear, but he is very keen on coal, while gas dominates, at 43%.

As for renewables, although they are expanding fast, the load factors for some are lower than for coal, gas and nuclear. So, while there may be around 227 GW of large grid-linked renewables in place, that only generate under 16% of total US electricity, compared to 19.5% (as quoted for 2015 by the World Nuclear Association), from the 100GW or so of nuclear, and over 60% from fossil fuels. The FERC renewables figure above does ignore the many small rooftop PV and offgrid/distributed projects under 1MW, which will push the total up and, in total primary energy production terms, the EIA’s data show that renewables, including hydro, have long since actually overtaken nuclear.

Interestingly, an AWEA update/revision to the stats above says wind capacity, at over 82GW, has also overtaken that for hydro, which it puts at 80GW. Some environmentalists in the USA do see large hydro as problematic but until recently it was the largest US renewable and, if the aim is to challenge not just nuclear (which has already been achieved), but also all fossil fuels, then hydro, wind, PV and other new renewables will surely all be needed. And even with hydro included, there is still a long way to go to challenge the lead that fossil fuel has, with pro-coal Trump not exactly helping.

However, it is hard to see what Trump can do to rescue nuclear. It has stalled in the USA. Though he’s clearly keen to resuscitate it, even calling it ‘renewable’: ‘We will begin to revive and expand our nuclear energy sector, which I’m so happy about, which produces clean, renewable and emissions-free energy. A complete review of US nuclear energy policy will help us find new ways to revitalize this crucial energy resource.’ 

Meanwhile, it’s maybe worth noting that the renewables capacities now in place are actually ahead of the target for the 2020 stage in the expansion to 100% by 2050 non-nuclear scenario produced by Jacobson at Stanford in 2015. But there are other views – which Trump may buy into. For example, it’s true that the subsidy cost/MWh, for PV solar especially, has been high, although it’s now falling. Some also say that further rapid expansion on the scale necessary is not viable in system terms – too much storage and vast extra grid links would be needed. And, anyway, renewables can’t expand fast enough. So nuclear is needed. That’s clearly what the nuclear lobbyists say, calling for more support.

The debate continues, with environmental groups and renewables enthusiasts digging in where they can against what some see as a concerted attempt to undo the progress that has been made in recent years on climate and energy policy. One slogan captures the mood of the resistance well: ‘Make America think again’. And maybe it is having an impact in some cases. However, although it will take time to enact, the exit from the Paris accord is a serious step backwards, nationally and globally.

But anything seems possible in La La land! Maybe Trump will try to redeem himself with wild ideas like a 1000-mile PV clad solar wall between the US and Mexico.

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