As reported by Utility Dive, Biden administration victory could nearly double the annual rate of renewable solar deployment in the US, according to a new report from S&P Global Ratings, but the presidential candidate’s pragmatic approach to the nation’s ongoing energy transition could result in a more gradual implementation to minimize financial impacts to clients.
American utilities have begun, largely of their own free will, an energy transition, with the utility industry “halving its dependence on coal generation and increasing its dependence on natural gas generation.” reads the S&P report. “The industry’s strong capex is focused on renewable energy, battery technology and natural gas generation. We expect that regardless of the US administration, utilities will continue on this path.”
J.R. Tolbert, managing director of the national business group Advanced Energy Economy, has similar views to the S&P report.
“Under the Trump administration, we expect to see continued growth in advanced energy as these technologies now compete in price and performance with natural gas and even better with coal and oil,” he said. “This, despite Trump’s attempts to resurrect coal, has been a failure in the face of technology and market forces. Embracing clean energy technology and moving away from fossil fuels is simply a better long-term economic solution. than fossil fuels. “
However, the results of the presidential elections could serve to allow different results for specific energy resources. Biden, according to S&P, would likely encourage greater adoption of solar power in particular, thanks in part to his administration’s goal of installing 500 million solar panels by 2025. S&P analysts estimate that if this goal is achieved, it could result in the installation of about 30 GW of solar energy per year over the next half decade. The current record for annual solar deployment in the US, the report notes, is 15 GW in a single year.
“It is clear that this target would represent a game changer for solar power,” said Aneesh Prabhu, senior director at S&P Global Ratings.
Combined with a Democratic sweep of Congress, S&P predicts that a Biden victory would boost residential solar and storage companies in particular. Biden’s policies could also increase the cost of fossil fuel production while decreasing demand, a dynamic that, coupled with the effects of the pandemic, could result “in a flood of stranded assets,” according to the report.
Trump, on the other hand, is likely to implement additional subsidies and tax cuts for the oil and gas industry “under the auspices of encouraging domestic production and promoting energy independence.”
The Advanced Energy Economy also hopes that a Trump administration could try to thwart state climate commitments and rules related to competitive wholesale markets, Tolbert said.
“Under a Trump administration that continues to throw obstacles in the face of a global growth sector, we may lose our competitiveness,” Tolbert said.
A Biden presidency would likely also accelerate offshore wind development, while a Trump administration could slow offshore wind deployment by allowing lengthy impact analysis studies to delay projects and eliminate tax credits, Prabhu said.
In states that have not adopted climate-related policies, a rapid shift toward such renewable energy goals could result in increased electricity bills for consumers, according to S&P. However, the report anticipates that “the utility industry will get some exceptions from a possible Biden administration,” resulting in a more gradual but more affordable transition.
Prabhu noted that Biden differs from some of his Democratic counterparts in his support for nuclear power and his willingness to allow fracking to continue as a matter of practicality.
“As long as you don’t have to replace existing resources,” Prabhu said, “it can usher in change over time.”
And the Advanced Energy Economy analysis, Tolbert said, suggests that this approach could result in economic gains nationwide, ranging from a four-fold return on investment in Florida to a fourteen-fold impact in Arizona, USA.
“In short,” said Tolbert, “Advanced energy technologies are now competing on cost and performance. The next president can choose to hinder this exponential growth and reduce America’s competitiveness, or accelerate it and benefit from millions of new jobs. “