From the editor: Trump, fantasy and energy

In an attempt to unpack U.S. President Donald Trump’s statements on energy in the State of the Union Address yesterday, there is little to go on. The two sentences he uttered on the topic are in line with the narrative arc of his time as the 45th President of the United States, in that they show little if any contact with reality.

However, they serve as a convenient milestone to mark a great accomplishment of the solar and wind industries: that we survived the first year of the Trump Administration and have emerged from no less than three major policy battles in relatively good shape.

But first, let us examine Trump’s brief and stunningly inaccurate statement.

We have ended the war on American Energy — and we have ended the war on clean coal. We are now an exporter of energy to the world.

The first problem here is that there was never a war on American energy under the Obama Administration. Quite the opposite. Obama’s “All of the above” energy policy actively promoted every form of energy extraction and electricity generation, with the exception of coal. This was particularly true under Energy Secretary Ernest Moniz.

It could also be argued that there was not a war on coal – merely the accelerated retirement of coal plants due to effective regulation of mercury emissions by the EPA, as well as slow and weak moves to regulate CO2 from the power sector. In the end coal is dying, more from increased competition from cheap natural gas than anything.

And no, Virginia, there never has been such a thing as clean coal.

By contrast, natural gas never had it so good, nor did oil. The fracking boom is mostly responsible for this, but petroleum exports also increased after President Obama signed legislation ending the crude oil export ban. The Energy Department’s embrace of liquefied natural gas export infrastructure has also supported expanded gas exports.

Despite this, the United States is still not a net exporter of energy – although the nation moved sharply in this direction under the Obama Administration.

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By contrast, there has been a war during the Trump Administration – a war against regulation, against informed energy policy, and against science – particularly climate science. Fortunately for all of us, in many cases either the power of the solar and wind industries and/or the strength of U.S. institutions have largely prevailed against the worst threats to renewable energy.

The most notable policy move under Trump’s Department of Energy was an attempt to ram through an open-ended bailout for coal and nuclear power plants under the absurd and intellectually indefensible argument that 90-day supplies of fuel are somehow necessary for grid reliability.

pv magazine reported extensively on the Grid Resiliency Pricing Rule, as it represented a significant threat to the function of wholesale power markets and indirectly to wind and solar. However, in the end the rule died under a decision by Trump’s own appointees not to make profound changes that were in no way supported by evidence and would have violated federal law.

A more direct threat emerged in the tax reform process. And while the Base Erosion Anti-Abuse Tax is still expected to harm tax equity finance, an 11th hour compromise exempted most of the Investment Tax Credit (ITC) and Production Tax Credit (PTC) from this rule.

The third and greatest threat has been solar tariffs under the Section 201 process, which in the end came out at a level much lower than the worst-case scenario. And while GTM Research, IHS Markit and SEIA are warning of relative market decline and lost jobs, it is important to note that in all cases these losses are against each organization’s baseline forecast.

There will no doubt be market impacts from the imposition of 30% tariffs. However, pv magazine’s own assessments indicate that the additional ~$.10 per watt cost of imported modules will set back system prices by about one year. In a world where pv system prices decline every year, this is simply not the end of the U.S. solar market.

It is important to note that neither the Trump Administration nor anything but a small minority of Congressional Republicans have in any way been friendly to renewable energy. But between the incompetence of the Department of Energy under Secretary Perry, the rising political power of wind and solar, and in some cases sheer luck, we have made it through this first year relatively unscathed.

President Trump will continue to ply his base with fantasies of clean coal and his administration’s effectiveness, in his own war against reality. The important thing for the solar industry is that we have suffered only relatively minor setbacks in our historic job of transforming America’s energy system.