At pv magazine USA, we’ve been struggling with how to cover yesterday’s news that EPA Administrator and fossil fuel industry tool Scott Pruitt has decided to repeal the Clean Power Plan (CPP).
First off, we need to be clear that this is not a surprise. The Trump Administration has been very clear from the beginning that it planned to withdraw from the Paris Agreement and scuttle CPP, one way or another. The only thing that is news is that now there is a timeline for a proposed rule to accomplish what we all knew was going to happen.
But more importantly, some distinctions need to be made. There are several things that the Trump Administration and Congress are doing or may do which could have significant negative effects on our industry, such as the threat of severe trade action against imported solar and the FERC rule to subsidize coal and nuclear generation, to say nothing of tax reform, which could make the Investment Tax Credit (ITC) difficult to monetize by drying up sources of tax equity.
Or the threat to repeal the ITC, which Pruitt made yesterday. Or the threat by Congressional Republicans to repeal or gut the Public Utilities Regulatory Power Act (PURPA).
But CPP is not one of the things that is expected to have a big effect on our industry either way. In an interview a year ago with pv magazine, Bloomberg New Energy Finance Senior Analyst Nathan Serota stated that if CPP were stopped, there would be “almost no impact on the U.S. solar industry” to 2021.
The major problem here is that CPP is simply not an ambitious policy. That begins with the timeline. The first compliance period starts in 2022, a year too distant to have a meaningful near-term impact on renewable energy deployment or on the disastrous pace of Climate Change.
What CPP did was to send a long-term signal to utilities; however many decision-makers in the power sector have already seen the light and realize that new coal and nuclear – and much of the existing fleet of older plants – are not economically viable in the current environment of cheap natural gas and renewables. It is also clear that in many places solar and wind are now the least expensive forms of new generation per unit of energy delivered, even with out subsidies.
To borrow the words of Mr. Serota, CPP was not a trend-setting policy. It was a trend-following policy.
Climate and energy writers in the mainstream mainstream media will have a field day with the demise of CPP, but this is more of a purely ideological battle of those who believe in action on Climate Change (even unambitious action) vs. those who don’t.
We in the solar industry should not get caught up in the faulty premise that this is a meaningful fight. Particularly when we have plenty of other concerns that could have much greater tangible effects on our industry.