Solar trade woes cast a pall over Biden’s climate goals
President Joe Biden’s climate goals are conflicting with his aim to bolster American manufacturing of solar panels — an industry the U.S. largely lost to China when he was vice president and one that can’t be rebuilt quickly.
The White House is counting on solar to play a vital role in Biden’s goal to rapidly eliminate carbon emissions from electricity production. The Energy Department says solar could provide up to 40 percent of the nation’s electricity by 2035, up from only 4 percent in 2021.
But the American companies that install and bring solar projects online are warning that a trio of tariff petitions filed by U.S. panel makers, under consideration by the Commerce Department, could derail those plans, forcing developers to abandon or renegotiate pricing on a huge chunk of their projects.
The trade dilemma presents Biden with the difficult choice of either making good on his promises to prop up domestic manufacturing, including good-paying jobs making solar panels, or his other campaign pledge to go full speed ahead on moving the United States' energy away from fossil fuels.
Even the mere prospect of new trade restrictions has prompted solar installers, who are already facing supply issues and higher labor costs, to pull back on some projects. At the same time, Biden wants to avoid being seen to be weak on China — another centerpiece of his campaign pitch and early policy agenda.
The conflict pits parts of the solar industry against each other. American solar panel manufacturers are petitioning to expand existing tariffs on Chinese products to those coming from Malaysia, Thailand and Vietnam. Backers of the tariffs and trade restrictions say they would allow panel makers in the U.S. to expand production. Added duties would also accomplish another of Biden’s goals: punishing China over the use of forced labor.
But the Solar Energy Industries Association, which represents developers that install panels and build solar projects, says imposing tariffs on those three nations would hit more than three-fourths of imports and about half of the total solar panel supply in the U.S. “That would have a pretty devastating impact on the solar industry,” said Abby Hopper, CEO of the trade group.
The trade association says if the new duties on panels from the Southeast Asian nations are approved, it could slash the rollout of solar in the U.S. by nearly a third over the next two years. The move would also slash jobs for solar project developments by 45,000 from where they would otherwise be in 2023.
Duties on the three additional countries would be “absolute industry killers,” warned Ben Catt, CEO of Pine Gate Renewables, a North Carolina-based solar project developer. “If you were to put those tariffs on any of the projects we are doing right now, I just think the pricing structure gets thrown out the window.”
Commerce must decide by Thursday whether it will dismiss the Southeast Asian solar petitions or open an investigation that could result in tariffs. If Commerce finds that importers are avoiding tariffs on solar panels by simply rerouting their goods through the Southeast Asian nations, by law it must impose duties.
That’s what the petitioners say is happening. They also argue that Biden’s lofty climate aspirations are “outside the scope of the case,” said Tim Brightbill, an international trade partner at Wiley Rein LLP, who is representing the petitioners. He also dismissed the dire employment and solar deployment figures predictions presented by the developers.
"This administration’s goals of climate action are wholly consistent with the goals of building the solar supply chain and returning it to the United States," said Brightbill, noting that solar deployment continued to grow in the U.S. after the Obama administration imposed import tariffs in 2012.
Commerce and the administration have wiggle room to cushion the impact of any tariffs. When panels or components are shipped from China to the Southeast Asian nations, they typically undergo some sort of assembly or modification. U.S. solar panel makers complain that work is too minor to allow them to avoid the tariffs on Chinese panels, but Commerce staff could reject that argument for some or all of the companies named in the petitions. The administration could also apply lower tariff rates than those currently in effect for Chinese imports.
Solar developers say they have had discussions with Biden administration climate officials about the potential for tariffs and trade restrictions to slow solar growth stateside. The White House did not make anyone available to comment despite repeated requests.
China tariffs, trade restrictions add anxiety
Other trade issues before the administration could also hamper solar build-out. Commerce is weighing whether to extend separate Trump-era tariffs on Chinese solar for another four years, and the Department of Homeland Security is considering whether to increase trade restrictions on Chinese panel components, like it did this summer.
https://www.politico.com/news/2021/09/28/biden-solar-manufacturing-climate-dilemma-514428
*********************************************It Looks Like America's Energy Future Is Still Going to Be a Gas
The battle over President Joe Biden’s sweeping clean energy plan isn’t over, but there already appears to be a winner – natural gas.
The fossil fuel will likely remain a mainstay of America’s electrical grid for some time, according to energy experts and lawmakers. That’s a big disappointment to liberal Democrats and environmentalists. In protests in cities and campuses nationwide, one of them fronted by Senate Majority Leader Chuck Schumer, they made natural gas the new climate villain, replacing coal, the dirtier fossil fuel that’s fading in the states.
Climate activists had pinned their hopes on the administration’s proposal to remake the energy industry at breakneck speed. It gives financial incentives to utilities to ramp up the deployment of clean energy sources such as wind and solar and would slow if not stop the expansion of gas-fired power plants.
But Sen. Joe Manchin, who controls climate policy as chair of the Energy and Natural Resources Committee, said in early September that he would block Biden’s ambitious plan and seek a middle ground. The West Virginian’s insistence that any climate policy must leave plenty of room for natural gas was criticized by Rep. Alexandria Ocasio-Cortez, among other progressives, as a favor to the fossil fuel industry, which has a large footprint in his home state.
As Manchin tells it, hitting the brakes on natural gas is a risk he’s not willing to take. Although such a move would reduce carbon emissions – a goal the senator shares – it makes the nation’s aging and feeble grid more vulnerable to dangerous blackouts as wind and solar energy play a larger role. They don’t supply power when the wind stops blowing and the sun is down. So natural gas plants, which have contributed to the closing of hundreds of coal burners, need to anchor the grid until viable clean substitutes come of age.
“The United States leads the world in emissions reductions and that’s largely because of the increased utilization of natural gas,” says Anne Bradbury, CEO of the gas and oil trade group American Exploration & Production Council. “It seems extremely shortsighted to be demonizing the use of natural gas.”
The prospect that the fossil fuel will have more staying power than opponents had hoped is an early signpost of America’s energy future
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Clean Electricity Performance Program A Corporatist Takeover
Part 1 of this story introduced the proposed Clean Energy Performance Program or CEPP. The central idea is for the Federal Government (that is, taxpayers) to pay electric power suppliers billions of dollars as a reward for adding ever increasing amounts of mostly renewable juice to what they sell. The rewards kick in whenever a supplier sells 4% more green juice than they did the year before. If they do not make the 4% threshold they are penalized accordingly.
The problem is that this creates a powerful drive for suppliers to add as much green power as they can, as fast as they can. The potential for destabilizing the grid, or the industry, is great.
Clean Energy Performance Program
I have now done a bit of research and come up with some interesting numbers, including a very big missing number. These are summarized below.
Budget Unlimited?
The draft CEPP bill begins by appropriating the necessary funding. Except it doesn’t in a very important way. The first paragraph funds the administrative side of the program, which runs until Sept 30, 2031 and is administered by the Energy Department. This number is very big, which indicates how complex the program is. There are over 3,000 electric power suppliers, each of which is either rewarded or penalized ever year. Here is the CEPP text:
“(a) APPROPRIATION.— (1) ADMINISTRATION.—In addition to amounts otherwise available, there is appropriated to the Secretary of Energy for fiscal year 2022, out of any money in the Treasury not otherwise appropriated, $250,000,000, to remain available until September 30, 2031 (except that no funds shall be disbursed after September 30, 2031), for the administrative expenses of carrying out section 224 of the Federal Power Act (as added by this section).”
The sum of $250 million is a heck of a lot of admin money, even spread over 9 years. It might fund something like 500 people, in effect making a new CEPP Agency.
But then it gets really interesting. Reports on the CEPP have consistently said it was a 150 billion dollar program, so that is what I too said in Part 1. But the actual text says the funding is unlimited. I am not making this up. Here is the text (emphasis added):
“(2) GRANTS.—In addition to amounts otherwise available, there is appropriated to the Secretary of Energy for each of fiscal years 2023 through 2031, out of any money in the Treasury not otherwise appropriated, such sums as are necessary to issue grants under section 224 of the Federal Power Act (as added by this section) (except that no funds shall be disbursed after September 30, 2031).“
The amount “such sums as are necessary” is whatever they need! Perhaps this is just a place holder. The CEPP is going to be just a small part of the mammoth $3.5 trillion reconciliation bill so maybe we are waiting for that. Or maybe this just says the appropriate appropriation will happen each year, whatever that means. Or something?
Big Numbers — Wind & Solar in Progress
As I pointed out in Part 1, people seem to think this is a mandate for suppliers to add just 4% to their green juice supply every year. In reality the reward of $150 per MWh if you meet that standard should drive suppliers to add as much as they can. So I took a look to see what is in the offing by way of new green generating capacity. It is a great deal more than 4% per year. Here are some basic round numbers from the American Public Power Association:
Present generating capacity:
Wind 120,000 MW
Solar 52,000 MW
New capacity already under construction and percentage increase:
Wind 22,000 MW (18%)
Solar 18,000 MW (35%)
Assuming the capacity factors of the new iron are the same as the existing stuff, these are the percentage increases in supply that are under construction. Even if it takes a couple of years to bring it all online this is way over 4%.
Beyond that we have the new capacity that has its permits but is not yet under construction. CEPP could bring it on fast.
Permitted capacity not yet under construction and percentage increase over present:
Wind: 8,000 MW (7%)
Solar: 19,000 MW (37%)
Also well over 4% and when you add them together it is 25% for wind and a whopping 72% for solar.
Major Complexities
Clearly, the suppliers might have no problem increasing their green juice supply to way over 4%. However it is not nearly that simple.
In fact, the 4% threshold is not based just on wind and solar. It is based on all the generating technologies with no CO2 emissions, which basically means nuclear, hydro, wind and solar. And, since we are not about to build a bunch of new nukes and big dams, it is up to wind and solar to cover the required increase from all these sources.
These big four technologies together produce about 40% of our power, while wind and solar only produce about 12%. So, wind and solar together will have to increase by something like 13% a year in order to meet the 4% increase. Even that looks easy given the new capacity in the pipeline, but maybe not.
There are a couple of nasty wrinkles, that I will just mention in passing. First, any supplier that presently provides a high percentage of nuclear or hydro generation is going to have a very high 4% threshold. Note, too, that the 4% compounds annually. Getting enough wind and solar could be a big challenge.
Second, will co-ops and municipal systems get hammered? There are roughly 2,000 rural electric co-op suppliers and about 1,000 municipal suppliers. Many are small and most buy a lot of their juice from the big local investor owned utility or IOU as they are called. That IOU is also a supplier under the Clean Electricity Performance Program, with its own retail customers.
Why should the IOU sell green juice wholesale to the co-ops and municipals when it can get the luscious $150/MWh reward by selling that juice to its own customers? There is an enormous conflict of interest here. The IOUs could force the co-ops and municipals into deep noncompliance with CEPP.
There are a lot of other nasty wrinkles to this seemingly simple program. Throwing untold billions of free dollars at the electric power industry is a very dangerous game. There will be big winners and big losers.
https://naturalgasnow.org/clean-electricity-performance-program-a-corporatist-takeover/
*********************************************Australia: Extraordinary moment prominent conservative columnist slams boss Rupert Murdoch for publishing '16 pages of propaganda' about climate change
News Corp columnist Andrew Bolt has used his Sky News show to slam his employer for its U-turn on global warming, calling it 'propaganda' and 'rubbish' and saying it will delight Scott Morrison.
The controversial commentator's intervention was prompted by the Murdoch Australian tabloids' new campaign backing action to do more to tackle climate change.
'Millions of Australian readers would have got a shock this morning when they picked up their Murdoch newspapers around the country,' an angry Bolt told his TV audience after the company's metropolitan dailies published lengthy newspaper wraparounds.
'Sixteen pages of News Corp's global warming propaganda, telling them why Australia should cut its emissions now to net-zero, telling them it will be good for us. And that is a shock,' he said.
Rupert Murdoch's Australian branch launched its new environmental project Mission Zero this week, saying it aims to 'inform Australians about the key environmental and climate issues of our time' in support of achieving net-zero carbon emissions by 2050.
The campaign is backed by business leaders and environmental campaigners but has come as a shock to many Australians - not least some of the company's in-house climate change sceptics.
Bolt said the Murdoch papers' seeming change of heart on the need to do something to curb global warming is hypocritical given how they had previously relentlessly attacked the Labor Party and former prime minister Malcolm Turnbull for their stances on the issue.
He said Prime Minister Scott Morrison will 'actually be delighted because he can now have the Malcolm Turnbull-type policy that he wants - net-zero emissions - and take it to the next big global warming conference in Glasgow in November, knowing that he has the backing of the Murdoch media.'
Bolt - who seemed floored by News Corp's move - added that people 'should worry' when big business, big media and big government' all seem to agree with action on the climate.
He said the tabloids' coverage urged readers to 'forget all that stuff we used to say' and that they were now expected to prepare for government action on the issue.
Bolt said he discussed the issue with his News Corp editors and was assured the company still believes in debate. 'I am still free to say exactly what I think and that is the only reason I'm still here,' he said, adding that 'It's rubbish. I don't buy it.'
Not everyone was buying News Corp's supposed change of mind, though, with former prime minister Kevin Rudd tweeting 'Murdoch is today predicting an investment bonanza for agriculture under a decarbonised economy.
'I wonder what's changed since they joined with the Liberal (Party) to criticise climate action under Labor as a "lunchbox tax",' he wrote, going on to repeat his call for a Royal Commission into the power and influence of the Murdoch newspapers.
When News Corp initially flagged its intent to embrace action on climate change last month, Bolt said he had lost the battle over global warming.
'My whole company's against me. I know that against these huge players, all the big political parties, my own employer, all the media and big media outlets, what am I? Just someone on the sidelines. Someone just howling on the sidelines, but telling you the truth,' Bolt said.
Mr Turnbull said last year that News Corp's 'campaign on climate denial' had done 'enormous damage to the world' and had left a 'shocking legacy' of inaction.
Michael Miller, the executive chairman of News Corp Australasia, said commentators such as Bolt would not be 'muzzled' on the issue of global warming.
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My other blogs. Main ones below
http://dissectleft.blogspot.com (DISSECTING LEFTISM )
http://edwatch.blogspot.com (EDUCATION WATCH)
http://pcwatch.blogspot.com (POLITICAL CORRECTNESS WATCH)
http://australian-politics.blogspot.com (AUSTRALIAN POLITICS)
http://snorphty.blogspot.com/ (TONGUE-TIED)
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Jim Hansen and his twin
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