Dive Brief:
- The Trump administration’s energy policy, and the fate of the Inflation Reduction Act as Congress proceeds with budget negotiations, were frequent topics during the Wednesday sessions of the American Council on Renewable Energy’s annual policy forum.
- During his opening keynote speech, ACORE CEO and President Ray Long affirmed the group’s desire to work with President Trump on issues of energy affordability, security and reliability, and did not overtly disagree with the president — a frequent critic of the clean energy industry and the IRA.
- Panelists in later sessions discussed the likely fate of the IRA as Congress weighs potential cuts to the legislation. On Tuesday, the House passed a budget bill that included $4.5 trillion in tax cuts, which would require Congress to find “up to $2 trillion in offsets,” said moderator Robin Millican, head of strategic initiatives and integration at Breakthrough Energy.
Dive Insight:
Long said he’s often asked what Trump actions he disagrees with and what his response is to the president’s attacks on wind energy. He said his answer is, “President Trump is right to focus on reducing energy costs for consumers. We are focused on the same goal. Reducing energy costs is the number one priority for all energy consumers. And as many of you know, wind and solar produce the cheapest power right now.”
Long said that ACORE supports an “all of the above” approach and cautions “that removing any one technology puts the United States at a competitive disadvantage to other countries.”
Panelist Andrew Wheeler, a partner at law firm Holland & Hart who served as EPA administrator during Trump’s first term, said that the administration he served in was focused on an all of the above generation mix. “There's nothing on the policy side that the Trump administration did in the first term that disadvantaged renewable energy,” he said, but added that he expects this administration to focus on increasing natural gas production.
Rep. Sean Casten, D-Ill., said during a keynote interview that he believes this administration will attempt to competitively disadvantage clean energy.
“They've got a lot of people who they are tied to, who have seen a steady erosion of market share over the last decade,” Casten said, referring to the declining demand for coal and flat demand for oil. “The only fossil fuel that's growing is natural gas, but it's growing at much slower than the rate of GDP, which it used to lock in on, and that's all because of the success that [the renewable energy industry has] had.”
Panelist Travis Cone, a partner at Republican lobbying and public affairs firm CGCN, said he has learned “never to bet against the Midwestern folks who care a lot about the wind [production tax credit] and the [investment tax credit],” but acknowledged that there is a “new political dynamic.”
“Are you going to get in front of Donald Trump?” he said. “Donald Trump hates windmills, viscerally. Hates them, I don't understand it. He hates them. He dislikes solar, he hates windmills. So if you're Chuck Grassley, the traditional champion of that kind of credit, are you going to roll with the new political paradigm? Are you going to fight on that parochial credit? I think they'll get run over.”
Cone said that if he were advocating for a revision of any IRA tax credit in an attempt to preserve it, he would “play up the need for battery storage and how that can be reliable, or that you're the lowest cost source of generation for a project, and frankly, the market should pick in that space.”
Alice Lin, the former deputy assistant secretary for legislative affairs at the U.S. Department of the Treasury, noted that there are other variables at play as well.
“I think a lot of people were surprised by the president’s pick for Department of Labor Secretary,” she said, noting that nominee Lori Chavez-DeRemer is a “strong labor pick. To the conversation on prevailing wage, some of those dynamics may be interesting to follow with building trades, and the other trades that have some investment in the IRA, and look to see how they're going to be engaging.”
Casten said that Democrats took care to ensure the IRA — which passed without any Republican support — was “politically durable” by crafting it to consist of “almost entirely carrots and no sticks” as well as directing the legislation’s benefits toward energy transition communities, to avoid a “massive wealth transfer from people who make expensive energy to people who make clean energy, which is also roughly a wealth transfer from red America to blue America.”
“I think that you have a strong constituency in all those Republican districts to preserve those jobs that were created,” Casten said.
Rep. Kathy Castor, D-Fla., said in her keynote interview that she also thinks it’s “very important” for the U.S. clean energy industry to emphasize to lawmakers the investments it’s made in Republican districts, as well as the competition the industry faces from China.
“China wants to eat our lunch, they want to own it,” Castor said. “They'll be happy if our [electric vehicle] manufacturers go out of business. They'll be more than fine if we double down on fossil fuels and don’t keep up diversification, because they want to own and control everything. They already do have such a stranglehold on critical minerals. So now is the time on the tax credits.”
