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Trump unlikely to fully end US clean energy policies

  • : Electricity, Emissions, Hydrogen
  • 24/11/04

Although former US president Donald Trump has promised to end climate policies enacted during the administration of President Joe Biden, the political complications of reversing course make a full change of direction unlikely should Trump return to the White House.

Trump has frequently criticized Inflation Reduction Act (IRA), promising to terminate the "Green New Scam" and rescind all unspent funds in the Biden administration's climate policy suite, if he is elected to a second term.

But fulfilling that pledge may be difficult for many reasons, not least of which is whether Republicans have control of both chambers of Congress after Tuesday's election, including the unlikely outcome of a 60-seat majority needed to bypass a Senate filibuster. Beyond the math, Republican districts are benefiting from IRA funding, with some lawmakers from Trump's party already opposing the turmoil that could arise from an about-face on tax policy.

"There's no way they're going to be able to replace and repeal the IRA, in large part because so many of the dollars are flowing to [Republican] states," said David Shepheard, a partner at consultant Baringa who specializes in energy and resources. "I think the pieces of the IRA that are most at risk are the [electric vehicle] tax credits, potentially some of the stimulative pieces around offshore wind."

The IRA established a host of federal incentives to support clean electricity growth and the associated domestic supply chain. Those include technology-agnostic production and investment tax credits for electricity generators based on their emissions intensities. But the law went well beyond the power sector and also established credits for hydrogen production, electric vehicles and the manufacture of components needed by clean electricity systems.

Project developers are counting on a policy trajectory that does not match Trump's rhetoric, which would allow some incentives to stay on the books.

Companies expect market forces, such as corporate demand, and state mandates to continue to drive growth for solar and onshore wind and energy storage, rather than national politics. But there is more trepidation around offshore wind, a less mature sector for which the federal government is effectively the landlord for project sites.

"There is no doubt that the trajectory of the US offshore wind industry will be impacted by the November election," Liz Burdock, chief executive of offshore wind industry group Oceantic Network, said. "Its outcome will influence how we maintain our momentum."

Uncertainty around the US presidential election has dampened private investment in the sector this year, according to Oceantic. At the same time, companies say the industry has come a long way since 2016, with a handful of projects now operating, while recent macroeconomic challenges are subsiding. Furthermore, demand for offshore wind would continue at the state level, and these factors could make the industry more resilient to headwinds.

Executive decisions

Trump still could use the executive branch to "stonewall" sectors helped by the IRA in the absence of a repeal, including by influence the timing or distribution of IRA funds, according to Shepheard. He could shift regulators' priorities to new oil and gas development, which, along with other actions, could make resources such as combined-cycle natural gas plants more attractive than renewables.

"The extent that renewables and other cleaner energy assets are competing with gas, that'll be the big change from a Trump administration," Shepheard said.

At the same time, funding for onshore wind and solar is "relatively safe", and tax credits for hydrogen and carbon capture are on comparably firm ground because of support from the oil and gas industry, Shepheard said.

Some companies have expressed cautious optimism that some elements of the IRA, such as the advanced manufacturing tax credit, will survive. The incentive is not only important for the solar supply chain but also offshore wind, as state-level solicitations often require developers to invest in local manufacturing.

Republican states in the US southeast have already benefited from new factories springing up on the back of the credits. For example, Enel chose Oklahoma for a new new module plant, First Solar located a factory in Alabama and Qcells has expanded production in Georgia.

Moreover, removing that carrot could leave the US solar industry reliant on Chinese companies, which could run afoul of Trump's protectionist trade instincts.

Trump's campaign did not respond to multiple requests to elaborate on his policy plans.


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24/12/13

Argentina’s renewables to get boost in 2025

Argentina’s renewables to get boost in 2025

New York, 13 December (Argus) — Argentina's renewables sector is looking at a rosier outlook in 2025 supported by new legislation and improved economic conditions. The country's renewable energy legislation, which was enacted in 2015 and expires at the end of 2025, stipulates a target of 20pc participation of renewables — excluding hydropower plants greater than 50MW — by the end of 2025. The country has not met annual targets, but there is growing confidence that it could come close to the goal by the end of next year. Renewable sources covered 15pc of the demand in October, according to the latest report from the energy secretariat, up from 13.5pc in July. The country added 373MW in new renewable generating capacity in the first three quarters of this year. The trade organization of wind energy CEA, estimates that 700MW in new solar and wind capacity will be added in 2025. A replacement renewable law focused primarily on investment, which the ruling Libertad Avanza party plans to submit in early 2025, and economic deregulation underway has the sector confident that financing for projects will soon be readily available, ushering in a boost in private investment for renewables. Ignacio Criado, a partner at the Tanoira Cassagne law firm who focuses on renewable energy, said he expects the country to be close to the 20pc renewable target by the end of 2025 and that there will be sustained growth in coming years. "More players are interested in the construction of renewable energy plants, with solar power in the north and wind in the south," said Criado. He said that the country's increasing economic stability and a government program providing incentives for large-scale investments, known as the RIGI, are fostering interest among investors. Argentina's economy, while still in tough shape, has improved in the year since president Javier Milei took office. While annualized inflation is still in triple digits, the monthly rate fell from 25.5pc in December 2023 to 2.4pc in November, according to the statistics agency. It was 112pc in the 12 months through November. The economy shrank by 3.4pc in the first half of the year and will contract by around 3pc the full year, but is expected to grow by 5pc in 2025, according to the IMF. During a 10 December address marking his first year in office, Milei said tax reform and elimination of exchange rate and customs controls would be forthcoming, adding to investment flows. RIGI boost The administration has already received requests under the RIGI mechanism for $11.8bn in investment, primarily in energy projects, Milei said. Among the projects in line for the RIGI is the state-owned YPF Luz's 305MW El Quemado solar plant, the first stage of which should be ready by 2026. In early December, the state's energy wholesaler, Cammesa, awarded a contract for eight new renewable projects with a combined capacity of 561MW. It received 31 proposals for a total of 1,639MW. Of the projects, 345MW were awarded to Genneia, the country's largest renewable company with more than 1GW in installed capacity, and 88MW to Australia's Fortescue for its Cerro Policia wind farm in the southern Rio Negro province. The energy will be used for its planned low-carbon hydrogen project. These projects should start coming on line from the end of 2025 in throughout 2026. As of October, Argentina had 6.56GW in installed renewable capacity, including 4.12GW in wind, up by 11.2pc from a year ago, 1.63GW in solar, up by 19.6pc, and 82MW in biogas, up by 5.4pc. It also had 524MW in small hydroelectric plants and 201MW in biomass, with no new capacity from a year earlier. Large-scale hydroelectric plants totalled 9.63GW, while thermal electric plants totalled 25.28GW and nuclear plants 1.75GW. By Lucien Chauvin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Norway's 500MW cables at risk if price link proved


24/12/13
24/12/13

Norway's 500MW cables at risk if price link proved

London, 13 December (Argus) — Norway will not replace the two oldest transmission cables between it and Denmark, with a combined capacity of 500MW, if the national transmission system operator (TSO) confirms they "harm the national power system", energy minister Terje Aasland told Argus . If the Skagerak 1 and 2 cables are found to contribute to "high prices", as seen this week, and additionally "reinforced negative price contagion", the minister explained, the government will not renew the cables. The minister's comments come as the ruling Labour party's programme committee — of which the minister is not a member — agreed to block extending or replacing the ageing cables as they approach the end of their operational lifetime. There has yet been no formal application to renew the Norwegian-Danish Skagerak 1 and 2 links, which the minister said means "there is nothing to say yes or no to" at the moment. Norwegian TSO Statnett is currently investigating the possible renewal and, alternatively, the effects of not renewing the link, the minister confirmed. Skagerak 1 and 2, commissioned in 1976 and 1977, respectively, are part of a trio of cables, including the 500MW Skagerak 3 interconnector connected in 1993, linking Norway's NO2 with Denmark's DK1 bidding area. By Daniel Craig Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Canada sets 2035 emissions reduction goal


24/12/13
24/12/13

Canada sets 2035 emissions reduction goal

London, 13 December (Argus) — Canada has set a new 2035 climate goal, aiming to reduce its greenhouse gas emissions by 45-50pc by 2035, from a 2005 baseline. This builds on its 2030 target of a 40-45pc emissions reduction, again from 2005 levels. Canada's emissions had been in 2015 projected to rise by 9pc by 2030, from 2005 levels, "but we are now successfully bending the curve", the Canadian environment and climate change ministry said. The newly-announced target is in line with a pledge Canada made at the UN Cop 29 climate summit last month. Countries that are party to the Paris climate accord must submit new national climate plans by 10 February 2025, to cover a timeframe up to 2035. Canada, the EU, Mexico, Norway and Switzerland committed at Cop 29 to set out new plans with "steep emissions cuts" that are consistent with the global 1.5°C temperature increase limit sought by the Paris Agreement. The plans are known as nationally determined contributions (NDCs). Canada's NDC is being considered by the cabinet, and the country plans to submit it by the deadline, Canadian climate change ambassador Catherine Stewart told Cop 29 delegates on 21 November. Tackling climate change is "both an environmental imperative and an economic opportunity", she added. The target was informed "by the best available science, Indigenous Knowledge, international climate change commitments, consultations with provinces and territories and expert advice", the ministry said. Canada will also "seek feedback on how to help companies take advantage of the economic opportunities that come with building a clean economy" in the near term, it added. Although the plan is not yet available, the ministry said that it will examine the role of carbon removal technologies for the energy transition. "Canadians are increasingly experiencing record-breaking extreme weather," the ministry noted. The country experienced record wildfires in 2023. Carbon emissions from wildfires this year were second only to the "unprecedented" levels in 2023, EU earth-monitoring service Copernicus found this month. Canada has a legally binding target of net zero emissions by 2050. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

EPA defends 'good neighbor' efficacy


24/12/11
24/12/11

EPA defends 'good neighbor' efficacy

Houston, 11 December (Argus) — The US Environmental Protection Agency (EPA) responded to concerns raised by the US Supreme Court in June by defending the efficacy of the "good neighbor" plan in reducing NOx emissions regardless of the number of participating states. The high court's concerns were over the issue of severability — that is, how effective the good neighbor plan would be in lowering ozone season NOx emissions if only some of the original 23 states participated. In other words, it is the question of whether the emissions limits placed on states as part of the Cross-State Air Pollution Rule (CSAPR) cap-and-trade program under the plan would have changed based on the number of participating states. In a notice published in the Federal Register on Tuesday, EPA rejected the idea that the effectiveness of the good neighbor plan — and as a result, the NOx emissions limits imposed on each state — would wane if the number of participating states changed. Instead, the agency said that its plan is "by design severable by state" because the NOx emissions limits are imposed on individual sources rather than the states themselves. Each participating state's emissions obligations depend on the number of obligated power plants, their emissions and the types of emissions reduction measures they already have in place. As a result, pausing the imposition of tighter NOx limits under the good neighbor plan in certain states does not affect the NOx limits imposed in other participating states, EPA said. In a similar vein, EPA addressed concerns that the larger version of the CSAPR Group 3 seasonal NOx allowance trading program established under the good neighbor plan would become more illiquid if it covered fewer states than planned, which could lead to a smaller supply of allowances and higher prices. Calling those concerns "unjustified", the agency said that states can withdraw their sources from a trading program by submitting their own ozone reduction plans. EPA also cited previous instances from past cross-state ozone programs where the number of participating states has changed, noting that there has been no evidence of allowance shortages. EPA also responded to concerns that it used an inconsistent methodology to determine emissions obligations for each source — including the emissions reduction strategies that could be used and their associated costs. The agency said it used a methodology that was "nearly identical to prior good neighbor rules" and considered NOx reduction technologies that have been in place "for decades throughout the US." The severability issue was raised by the Supreme Court in June, when it paused implementation of the good neighbor plan nationwide. The court majority said that EPA did not provide a sufficient explanation in response to public comments from states that highlighted those concerns — especially because, until the court issued its stay, only 10 states were participating in the good neighbor plan because of lower court stays. But in September, the US Court of Appeals for the DC Circuit allowed EPA to respond to the issue of severability, while it paused related litigation. EPA finalized the "good neighbor" plan last year to help downwind states meet the 2015 federal ozone standards. It imposed more rigorous CSAPR ozone season NOx emissions limits on more than 20 states and called for new NOx limits for industrial sources. Illiquidity has been persistent in the CSAPR market, depressing activity and keeping prices steady for almost a year because of uncertainty surrounding the numerous legal challenges against the plan. The ozone season runs from May-September each year. With plan halted for the time being, EPA has returned to less-stringent seasonal NOx budgets and reshuffled the remaining participating states into the Group 2 and new "expanded" Group 2 markets, leaving the Group 3 market empty. By Ida Balakrishna Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop 29 grids, storage pledge signatories released


24/12/11
24/12/11

Cop 29 grids, storage pledge signatories released

London, 11 December (Argus) — The final list of signatories for pledges on expanding energy storage and grid capacity taken at the UN Cop 29 climate summit, was released today, almost four weeks after the commitment was first finalised, with 58 countries out of almost 200 Cop parties taking part. Signatories commit to a collective goal of increasing electricity storage capacity to 1500GW by 2030, a sixfold increase from 2022. Another pledge is to add or refurbish 25mn km of grid infrastructure by 2030, and recognise the need for an additional 65mn km by 2040. Lack of firm, clean power generators to back up intermittent renewables is a major barrier to increasing renewable penetration, while distributed resources require large investments in power grids to transport electricity to consumers. The list of 58 signatory countries includes the so-called troika of Cop host countries the UAE, Azerbaijan and Brazil. The US and all other G7 member states are present, with the exception of France. Also absent among major economies are China and Russia, while Saudi Arabia spoke in support of the pledges during Cop but does not appear on the list of signatories. In comparison, almost 120 countries had signed a pledge to triple global renewable capacity double global energy efficiency by 2030 during the Cop 28 summit in Dubai last year. The grids and storage pledges were one of the centrepiece announcements made by the Azeri host, following on from the calls made in Dubai on renewable capacity and energy efficiency, but also on transitioning away from fossil fuels in energy systems. But divergences on mitigation — actions to cut greenhouse gas emissions — during the summit this year, meant that the completed pledge, as well as any other specific mentions of fuels and energy transition technologies, were not included in final outcome texts. By Rhys Talbot Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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