Whither energy? What a Trump administration will mean for renewables, fossil fuels

A month after a stunning U.S. presidential election, the sky has yet to fall for renewable energy, and confidence is increasing for the coal, oil and gas sectors.

The victory of Donald Trump — the Republican presidential nominee who has tweeted that he believes global warming is a hoax created by China and lost a two-year legal battle last summer to cancel an offshore wind project near a golf course he owns in Scotland — sent green-energy stocks reeling the day after the polls closed, while share prices for many coal, oil and gas firms soared.

Shares of Vestas Wind Systems — the Denmark-based company that manufactures wind turbines, blades and nacelles at plants in Windsor, Brighton and Pueblo that employ about 4,000 Coloradans — dropped about 10 percent on Nov. 9, while First Solar, the nation’s largest maker of solar panels, took a 6.5 percent hit by midmorning and SunPower stock fell about 18 percent. Meanwhile, Peabody Energy, the nation’s largest coal company, saw its shares jump more than 50 percent despite its ongoing bankruptcy proceedings.

SPONSORED CONTENT

Empowering communities

Rocky Mountain Health Plans (RMHP), part of the UnitedHealthcare family, has pledged its commitment to uplift these communities through substantial investments in organizations addressing the distinct needs of our communities.

But as the dust settled, renewable-energy proponents took a brighter view.

Morten Dyrholm, Vestas’ senior vice president for marketing, communications and public affairs, said the planned phase-out of the federal wind-production tax credit wouldn’t be altered under Trump. The current tax credit already has been approved, he said in an interview with industry newsletter Recharge, “and it’s not something that a president, whoever’s elected, can reverse. We’re on a stable track at least until 2020. After that, let’s see what happens.

“I think if you look at the underlying fundamentals, the cost of wind in the U.S. is extremely competitive,” Dyrholm said.

“Polls show that almost 80 percent of Trump supporters want more wind farms built in the United States,” Vestas said in a statement after the election. “What’s more, wind energy’s natural competitiveness against other power generation sources will help ensure its solid future. Wind energy supports nearly 88,000 jobs in the United States, including 21,000 in domestic manufacturing.”

That’s enough to persuade even conservatives such as U.S. Sen. Charles Grassley, R-Iowa, who pledged in a late August interview with Yahoo! News to protect the wind tax credit.

“If he wants to do away with it, he’ll have to get a bill through Congress,” Grassley said, “and he’ll do it over my dead body.”

According to the American Wind Energy Association, more than 80 percent of all wind farms are in Republican congressional districts. Noting Trump’s victory-speech pledge that “we’re going to rebuild our infrastructure, which will become, by the way, second to none, and we will put millions of our people to work as we rebuild it,” AWEA called wind power “some of the best infrastructure America has ever built, and we are on track to doubling it from today’s levels by 2020.”

According to an estimate by Bloomberg Intelligence, about 41.3 percent of Vestas’ 2015 revenue last year came from the Americas. “The U.S. is not the only market in the world,” noted Vestas chairman Bert Nordberg, “but it’s important for us.”

Long-term commitments and contracts for projects abroad also are bolstering the solar-power industry, whose 30 percent investment tax credit phases out by 2023.

The Boulder-based subsidiary of Germany’s juwi group began work this year on 90 megawatts of solar photovoltaics in Colorado. It signed a 25-year power purchase agreement with Tri-State Generation and Transmission for a 37.8-megawatt, 300-acre solar farm in Las Animas County, concluded a deal to sell its 36.3-megawatt Larimer Solar Energy Center to PSEG Solar Source, and finalized another long-term pact with the Sedalia-based Intermountain Rural Electric Association for its 15.9-megawatt Victory Solar farm.

An employee of Louisville-based RGS Energy who asked not to be named noted that solar installers should continue to do well in “whatever states are friendly toward solar and accept net metering.

“The states that are installing are still on track and on pace. We really haven’t slowed down,” he said. “Colorado’s doing fine.”

“The federal tax credit got extended, and nobody can do anything about that. That will help.”

Colorado voters in 2004 passed the nation’s first renewable-energy standard, requiring providers of electricity to obtain a minimum percentage of their power from renewable-energy sources. State Senate Bill 252, passed in 2013, requires energy cooperatives to generate 20 percent of their electricity from renewables.

A presidential election can’t change that, noted Frank Prager, vice president for policy and federal affairs at Xcel Energy.

“Regardless of the outcome of the election, Xcel Energy will continue pursuing energy and environmental strategies that appeal to policymakers across the political spectrum because we are focused on renewable and other infrastructure projects that will reduce carbon dioxide emissions without increasing prices or sacrificing reliability,” Prager said in a prepared statement. “We look forward to working with the new administration, policymakers at all levels of government and other stakeholders to develop and implement energy policies that benefit our customers, our business and our communities.”

The quest for cost savings also shouldn’t be a partisan issue,” added Howard Geller, executive director of the Boulder-based Southwest Energy Efficiency Project (SWEEP).

“I think the outlook continues to remain strong for improved energy efficiency because, first and foremost, it’s cost effective to improve it in homes and businesses,” Geller said. “Technology such as LED lamps, better insulation, more efficient appliances and smart thermostats save energy and provide utility bill savings that far exceed the cost of the measures. So these technologies are apolitical. They work whether it’s a Republican or Democratic president.

“The initiatives to educate consumers and, in some cases, provide financial incentives are primarily funded by state and local governments and utility companies. Those are growing in magnitude, and we expect they will continue to grow.”

Even though federal support for efficiency goals may decline under a Trump administration that is more hostile to federal standards, Geller said, “I expect fed funding for research and development of new energy-efficiency technologies, low-income home weatherization and state energy programs will continue, given the bipartisan support for these initiatives.

“No one knows yet what sort of budget levels there will be for Department of Energy programs, but I know there’s broad support — red states and blue states.”

However, the carbon emissions policy contained in the Obama administration’s proposed Clean Power Plan is likely to be a target of the new administration, especially given Trump’s Oct. 31 pledge to “cancel all wasteful climate-change spending.” The plan announced last year by the federal Environmental Protection Agency would require the U.S. power sector to cut carbon dioxide emissions by 32 percent in 2030 from 2005 levels.

Blasting the Interior Department’s cancellation in November of 25 of 65 leases in western Colorado, David Ludlam, executive director of the West Slope Colorado Oil and Gas Association, told UPI the election result “broadens the range of possible responses our industry may have in relation to this unprecedented breach of contract.”

Dan Haley, president and CEO of the Colorado Oil & Gas Association, expressed optimism about a Trump administration’s approach to fossil fuels, a critical issue for Weld County, which produces about 90 percent of the state’s oil and about more than one-third of its gas.

“We’re very optimistic the new administration will be more supportive of our industry than the outgoing one,” Haley said. “We’re hopeful this is an opportunity to produce more of own energy and utilize more clean-burning natural gas in an effort to reduce emissions. 

“Also, our friends and allies desperately want to buy our natural gas, and I think we’ll see an increase in energy exports under the Trump administration.  For states like Colorado, that hopefully means that one day soon we’ll be sending more of the energy produced here to meet the growing demand for energy in Asia through important projects such as Jordan Cove.”

While his focus is on fossil fuels, Trump did indicate that some energy-policy decisions would remain in state hands. That has brought some hope to the renewable-energy sector.

Despite the initial post-election anxiety, said Blake Jones, founder of Boulder-based Namaste Solar, in an interview with Colorado Public Radio, “over time I think as the dust settled, as we thought about things, as we read different perspectives … for solar and renewables, I’m quite optimistic.”