A Watershed Moment for Renewables?

Despite the Trump administration’s hostility towards renewable energy, momentum is increasingly on its side.

Last week, the Federal Energy Regulatory Commission unanimously rejected a plan from Energy Secretary Rick Perry to subsidize struggling coal and nuclear plants, giving them a competitive advantage over other sources of energy.

DOE’s proposal argued that recent natural disasters and extreme weather events exposed threats to the nation’s electric grid that need to be addressed by allowing coal and nuclear plants to “[recover] fully allocated costs and thereby continue to provide the energy security on which our nation relies.” In essence, Perry’s department argued that ensuring the reliability of the electrical grid demands letting coal and nuclear plants charge more for power, helping them stay on line.

Putting aside for a moment the irony that dependence on coal and other fossil fuels increases greenhouse gases, which in turn makes extreme weather events more extreme, the plan was viewed by many energy experts as a blatant effort to give the struggling coal industry a leg up over natural gas and renewables. As the Washington Post noted:

The plan, however, was widely seen as an effort to alter the balance of competitive electricity markets that federal regulators have been cultivating since the late 1980s. Critics said it would have largely helped a handful of coal and nuclear companies, including the utility FirstEnergy and coal-mining firm Murray Energy, while raising rates for consumers.

Surprisingly, that view was apparently shared by the FERC – including four members appointed by President Trump – which rejected the proposal, opting instead to maintain competition in energy markets.

It’s no secret that President Trump wants to help coal country; during the 2016 campaign he promised to bring coal jobs back. The fact that DOE’s plan to achieve this was so roundly rejected by the FERC shows how hard it will be for Trump to keep that promise. If Perry’s proposal was Plan A, Plan B must not be any more realistic. The fact is, if coal cannot remain competitive in electricity markets without artificial government subsidies, its path forward is bleak.

Meanwhile, the cost of renewables continues to decline. The Natural Resources Defense Council reports that the costs of wind and solar projects in the western U.S. are so low that that

. . . it is cheaper to build a new wind or solar project than to operate most existing coal plants in the West. It’s also significantly cheaper than the cost of a new gas plant, often considered the most significant competitor of coal, and renewables provide long-term price stability that gas plants don’t.

At the same time, elected officials increasingly are seeing the policy and political benefits of talking up renewables. This month, New York Governor (and possible 2020 Democratic Presidential contender) Andrew Cuomo announced his “2018 Clean Energy Jobs and Climate Agenda,”  which seeks to end the use of coal in the state’s power plants by 2020 while expanding renewable energy through wind and solar investments and “clean energy” workforce development.

In other words, while President Trump is feverishly working to save jobs in the coal industry, New York is looking to create jobs in renewables. It’s as if in the early 1800s the federal government tried to prop up canal building while the railroads were taking over.

None of this is to suggest that it’s smooth sailing for renewables: White House budget proposals continue to go after clean energy programs, and EPA Administrator Scott Pruitt is continuing his crusade to undermine climate regulations. And around the world, far too much carbon is being spewed into the atmosphere. But the tide is turning.

Opponents of federal investments in clean energy have always argued that policymakers should let the market work. Hopefully they won’t abandon that principle when the fossil fuel industry comes knocking.