WHAT IS AT STAKE FOR CLEAN ENERGY, PER WOOD MACKENZIE: Another Trump administration would put $1 trillion in clean energy funding at risk, according to a new report from data analytics firm Wood Mackenzie.
The report outlines how a Trump presidency could mean an immediate halt to the decarbonization efforts launched by President Joe Biden, with possible cuts to incentives for electric vehicles, green hydrogen, and carbon capture and storage technologies. However, unabated fossil generation is likely to grow, pushing net-zero goals out of reach.
What stuck out to us: The report outlines that a full repeal of the Inflation Reduction Act is unlikely, despite Donald Trump’s promises to repeal the law’s energy tax credits. Nor are changes to the production and investment tax credits expected, since they have bipartisan support.
Some provisions, though, could be changed to benefit fossil fuels. For example, the production tax credit for clean hydrogen – otherwise known as 45V – could favor blue hydrogen, which is produced from natural gas and paired with CCS, over green hydrogen, which is generated by renewables.
What could be rolled back: The Environmental Protection Agency’s methane regulations, power plant emissions standards, and transportation emission targets, along with government spending and fuel economy standards. There could also be cuts in the Department of Energy’s Loan Program Office, the EPA’s Greenhouse Gas Reduction Fund, the DOE’s Grid Resilience and Innovation Program.
The alternatives: This could create a pathway for natural gas and new nuclear capacity to meet power demand.
The conclusion: Decarbonization efforts are likely to fall to the states under a Trump White House.
In its base case forecast, the group projects that the U.S. will reach peak fossil fuel demand in 2030, and electricity demand will double by 2050. However, a delayed scenario will see demand peak at least 10 years later. Read the report here.
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A NEW MILESTONE ON SOLAR: The U.S. has officially exceeded five million solar installations, according to a report from the Solar Energy Industries Association and Wood Mackenzie.
According to the report, over half of total solar installations have come online since the beginning of 2020, and more than quarter have come online since the IRA became law nearly two years ago. The milestone comes eight years after the U.S. reached one million solar installations in 2016, which took 40 years to achieve following the first grid installation in 1973.
“Solar is scaling by the millions because it consistently delivers on its promise to lower electricity costs, boost community resilience, and create economic opportunities,” said SEIA president and CEO Abigail Ross Hopper. “Solar is quickly becoming the dominant source of electricity on the grid, allowing communities to breathe cleaner air and lead healthier lives.”
Looking forward: The report predicts that solar installations will double to 10 million by 2030, and triple to 15 million by 2034.
The details: Residential solar is leading the pack in comparison to other sectors, accounting for 97% of all solar installations. California is the state with the most solar installations, but recent policy decisions have harmed the rooftop solar market, the report states. Illinois and Florida are also rapidly growing in solar installations.
BIDEN TIGHTENS TARIFF NET ON CHINESE SOLAR: The Biden administration took additional steps this morning to protect domestic solar manufacturers from Chinese competition.
First, it announced that it would impose Section 201 tariffs on bifacial solar panels, which had been given an exemption from special duties for the past two years. The White House said imports had surged in the past few years, and now accounted for the majority of solar imports.
Second, the White House said that it would proceed with the scheduled expiration of a 24-month pause on tariffs on solar cell and module imports from Cambodia, Thailand, Vietnam, and Malaysia. The four countries had been slated to be hit with tariffs on the grounds that they were being used as pass-throughs for products from China.
White House officials also said they would be taking additional measures to ensure domestic producers were not vulnerable to unfair trade practices by China. Read more from Breanne here.
NERC WARNS OF SUPPLY SHORTFALLS OVER THE SUMMER: The North American Electric Reliability Corporation issued a warning yesterday that several regions are in danger of blackouts this summer in case of extreme heat.
NERC, which is responsible for overseeing and establishing grid reliability standards for system operators across the country, said in its summer reliability assessment that the situation has improved since last summer and the whole country has adequate supplies for normal weather, but that broad swathes of the country face “electricity supply shortfalls during periods of more extreme summer conditions.”
“Demand is growing in many areas at a rapid pace with the adoption of electric vehicles and construction of new data centers, straining some parts of the system,” said Mark Olson, NERC’s manager of Reliability Assessments.
New England: Because of the retirement of two natural-gas-fired generators at Mystic Generating Station this month, New England will have less capacity this summer and ISO New England may need to resort to extraordinary measures in case of a heat wave.
The Midwest: NERC said that the Midcontinent Independent System Operator would face challenges meeting demand if wind and solar output falter.
The Southwest: Ongoing severe drought means that WECC-SW, which includes Arizona, New Mexico and parts of California and Texas, might have to import energy during extreme heat – but that doing so might be difficult if it’s a heatwave that affects the broader region.
Texas: The strong growth in both energy demand and solar power in Texas has created the risk of shortages during heat waves in the evenings as solar generation begins to ramp down.
California: NERC said that California’s situation has been improved to some extent by strong growth in solar and battery resources, as well as the winter precipitation that boosted the snowpack and will allow more hydropower capacity to balance out wind and solar. Still, California is at risk in a heat wave if solar generation doesn’t come through, especially if it is limited in importing electricity because of a heatwave that affects the entire Southwest.
Jim Matheson, the head of the National Rural Electric Cooperative Association, said in a commentary on the report that it “highlights the importance of always-available energy as our nation works to keep the lights on” and that reliability would be further imperiled by the Environmental Protection Agency’s new power plant rules.
MICROSOFT EMISSIONS SOAR AS IT PURSUES ARTIFICIAL INTELLIGENCE: Microsoft pledged in 2020 to go carbon-negative by 2030, but its emissions have soared 30% since then, as it uses tremendous amounts of energy for its pursuit of artificial intelligence technology.
The tech company said in its annual sustainability report yesterday that the increase was driven primarily by the construction of data centers, which require vast amounts of power.
“Our challenges are in part unique to our position as a leading cloud supplier that is expanding its datacenters,” Microsoft said in the report. It said that the world needs greener concrete, fuels, and computer chips.
Still, Microsoft noted progress it has made toward its goals. While overall emissions have risen because of the materials and power needed to build out data centers, its Scope 1 and 2 emissions – that is, those generated by its activities and its direct use of fuels and electricity – have fallen. It said that in 2023, it increased its contracted portfolio of renewable energy to over 19.8 gigawatts and contracted more than five million metric tons of carbon removal. We noted some of those carbon removal deals in the newsletter this month.
CHEVRON EXITS NORTH SEA AFTER 55 YEARS: Chevron told Reuters that it is preparing to sell its remaining assets in the North Sea, after drilling off the coast of the United Kingdom for more than half a century.
Chevron had said it would sell off assets around the world as it prepared for its $53 billion acquisition of Hess. An outside analyst suggested to the Financial Times that the sale could be related to the prospect of new taxes under the U.K.’s Labour Party, which looks set to come into power in general elections this year, but Chevron said that taxation was not a motivating factor.
Deepwater drilling was pioneered in the North Sea in the 1970s, but U.K. oil and gas production has declined from 4.5 million barrels of oil equivalent per day in the late 1990s to around 1.2 million in 2023, according to Reuters.
ICYMI – DESANTIS SIGNS BILL REMOVING REFERENCES TO ‘CLIMATE CHANGE’: Florida Gov. Ron DeSantis signed legislation yesterday that removes references to “climate change” in state law, prevents localities from imposing energy restrictions, and bans offshore wind.
The Republican tweeted: “We’re restoring sanity in our approach to energy and rejecting the agenda of the radical green zealots.”
Sierra Club Florida Clean Energy Organizing Manager Brooke Alexander-Goss criticized DeSantis for the law, saying in a press release that it “jeopardizes the health and safety of all Floridians, further proving that his top priority is to appease large corporations and fossil fuel companies.”
RUNDOWN
The Washington Post Months after Maui fires, residents report troubling health problems
Bloomberg Big Tech’s Hunger for Data Centers Drives Green Push at Holcim
Financial Times Green hydrogen group Thyssenkrupp Nucera hit by drop in orders