Energy industry in 5 years
Renewable energy is not only a great way to ensure that the planet is safer and future generations live in a healthier, greener world, it is also the more affordable power source for us. Given the many advantages that are associated with it, there should really be no question about its future in the country. It would seem perfectly reasonable and rational to expect full government backing for renewable energy, more initiatives to encourage people to switch to the alternative method, more subsidies to make it a cheaper alternative. However, right before the Presidential elections came to a conclusion, there was a lot of turmoil in the renewable energy sector arising from the doubts about the future of these projects.
The prime reason was the rather determined stance of the Presidential candidate Donald Trump against renewable energy projects. On many occasions, Mr. Trump made his feelings clear that he did not feel these added much value. In his speeches, he made some comments categorically against renewable energy and its sustainability prospects. Some of his criticisms were that solar power was prohibitively expensive, that wind power was very bad for the environment because it affected wildlife adversely and that renewable energy itself ‘was not working so good’. The candidate’s speeches made renewable energy industry players and those supporting this form of energy quite jittery and when Trump was elected president, the fears only escalated. The main reason for the fears is that the Presidents had promised to eliminate federal initiatives in place on climate change. President Obama’s emissions reduction initiative for the power sector and the Clean Power Plan were top of his list for elimination, as per his campaign speeches.
Industry players are cautiously optimistic now
However, industry players seem to be cautiously optimistic right now. The reason being that President Trump has not yet announced any policies contrary to the alternative energy initiatives in place now, nor has he indicated that he will move through on his promise to do away with the above mentioned programs. Political experts point out that he did not actually say that he would completely cut out the programs although he did make his dissent felt.
There is another aspect to be viewed as well. Trump has made no bones about his Made in America policy or his full commitment to ensuring that Americans get jobs before everyone else. This could turn out to be a shot in the arm for alternative energy producers in the nation as they promote their industry as a means for more Americans to get employed while the nation’s industries receive a fillip too, thanks to more encouragement from the government pushing renewable energy products faster and more easily in the marketplace. Whether the President will see it this way remains to be seen but there is little doubt that he will back anything that enhances homegrown job opportunities or the internal economy of the nation.
In fact, many conservatives who did not come out in support of climate change initiatives have been vocal in their support of allowing any industry to flourish that can add more well-paying jobs in the country. Now all that needs to be done is to position renewable energy industry as one of those industries.
Policies expected to sustain in the short term
Stock in companies involved in alternative energy see- sawed during the presidential elections campaigns and dipped after the elections but the point is that they have not dramatically fallen any further. One of the reasons could be that the tax incentives given to green energy projects was brought into force with bi-partisan backing. Getting rid of them will not be an easy task at all because many of the legislators are firmly in support of these initiatives and will continue to back them. Also the policies in place right now will continue to run their term and this means the industry need not unduly worry about dramatic changes in the regime taking with immediate effect. The question is whether new pro- renewable energy policies will be introduced by this presidents and the answer, seems to be ‘not likely’. Still, this may only impact the long term prospects for the industry and not its current situation.
President Trump has backtracked on his earlier promise to quit a greenhouse gas emission worldwide pact. So that is being viewed as a positive for now though whether he will continue to enter into more such agreements remains a big question that seems to veer around to the ‘unlikely’ answer.
The renewable energy sector is responsible for a good number of jobs in the U.S. and any bid by the president to curtail activity here will go against his commitment to improve employment scenario in the U.S. This would be one reason why nothing major may change in this sector. Also, the fact that the renewable portfolio standards are managed by state mandates. According to these, the electricity suppliers have to supply an increasing amount of power from green sources. They are also required to back 2/3rd of the total renewable energy installations in states so the activity here is likely to keep continuing irrespective of the views of the current White House incumbent, at least for now.
Numbers and facts
Estimated numbers given out by Yuan Sheng Yu, Lux Research energy analyst are not heartening for the renewable energy sector. In his report, he says that if President Trump continues in the Oval Office for two consecutive terms, the energy generation from green sources can be expected to stagnate. The actual numbers he estimates are a 2.3% growth until 2024, a dramatically low figure indeed. To give a good idea of what it means, compare it with the solar power generation growth during 2015, which exhibited a 28% growth.
The numbers are, frankly, somewhat scary but given the facts that we have discussed already, it may be safe to think that renewable energy players need not fear drastic changes in the short term but what will happen over the long term continues to remain a question mark.