By Alex Kimani
The shift from fossil fuels to renewables is in full swing, and that inexorable march will carry on in the coming years regardless of who sits at the Oval Office. That’s the verdict by energy and commodities navel-gazer S&P Global Platts, which says the transition to green energy will move ahead full steam irrespective of whether Trump or Biden carries the day come 3rd November.
That’s in large part due to renewable energy sources such as solar and wind becoming more cost competitive with traditional fuels, while more novel fuels such as hydrogen are also becoming cheaper and gaining traction. Over the past decade alone, solar generation costs have fallen nearly 90% and wind by nearly 70% thanks to massive advances in technology.
Renewables have also been proving to be remarkably resilient, being the only energy sector that has continued to grow despite the global pandemic.
Still, the U.S. energy sector could look radically different depending on the outcome of the elections.
Energy sector under Trump
S&P Global Platts notes that the energy transition has “clearly been moving forward on a regional basis,” despite lacking clear endorsement at the federal level under Trump. This trend is likely to continue even if Trump is reelected, but it would mean slower growth for green energy.
In fact, Trump has been openly hostile towards renewables, going as far as making baseless claims that wind turbines depress property values and cause cancer. His climate denialism and withdrawal of the US. from the Paris Climate Accord have been equally baffling, to say the least, with the country set to officially withdraw from the deal just one day after the 2020 presidential election due to a quirk of timing.
“I found it sickening, it was mendacious from start to finish. I was furious … because here we have this really important thing and here’s this joker who doesn’t understand anything he’s talking about. It was a fraud,” Todd Stern, US’s chief negotiator of the Paris Agreement in 2015, told The Guardian after Trump’s withdrawal speech.
Of course, the real reason why Trump is so much against renewables is because they are killing another energy sector he dearly loves: Coal. But in fact, it’s natural gas, not renewables, that has been doing the most damage to coal over the past decade as natural gas plants continue to replace coal plants.
However, renewable energy and batteries are likely to finish it off–especially if Biden takes over.
Biden’s $5 trillion renewables plan
“The federal government could make that transition happen more quickly if it had a unifying, coherent policy framework for the power sector.”
That’s according to Platts, which notes that the renewable energy sector will receive a major boost under Biden thanks to his ambitious $5 trillion clean energy plan. Biden has pitched a $5 trillion-plus climate proposal that he says would enable the U.S. to achieve net zero status by 2050.
Biden’s plan calls for $1.7 trillion in federal spending over the next decade, with the balance coming from private sector investments. He has proposed eliminating existing fossil fuel subsidies while also repealing Trump’s corporate tax bonanza to cover the taxpayer costs.
“Science tells us that how we act or fail to act in the next 12 years will determine the very livability of our planet. That’s why I’m calling for a clean energy revolution to confront this crisis and do what America does best–solve big problems with big ideas,” Biden has said in a statement.
According to Platts, coal’s current 21% share of the generation mix is likely to fall to just 5% by 2030, assuming a federal carbon price starts in 2026. In this scenario, wind and solar generation could increase from the current 11% of the generation mix to 30% in 2030.
Indeed, mothballing half of the country’s coal-burning electricity plants will open the doors for 122,000 megawatts of wind and solar while also cutting greenhouse gas emissions by some 600 million metric tons by 2025.
An aggressive push towards 100% clean energy could also save Americans as much as $321bn in energy costs, according to a new study.
The latest poll shows Biden holding a commanding lead nationally, including leading in nearly every swing state. He, however, has warned that Trump could still pull a fast one by delegitimizing the outcome of the elections because “… that’s how he plays.”
Oil demand will plateau in 2030
Platts did not update its oil outlook, but a recent report by another energy expert paints a bleak picture.
According to a report by the International Energy Agency (IEA), oil demand will plateau in 2030 and enter a phase of terminal decline, thus giving renewables the ascendancy.