With just 91 days to go until Election Day in the US, the two presidential nominees are sharpening their focus on economic policy in a bid to sway voters in battleground states. Advocating clean energy as an economic catalyst and job creator at the Democratic National Convention on 28 July, Hillary Clinton took a starkly different approach to Republican nominee, Donald Trump. In contrast, Trump has called climate change a ‘hoax’ and favours boosting domestic coal production.
In an economic policy speech given yesterday, Trump spoke of “President Obama’s job-killing energy restrictions”, in reference to the Environmental Protection Agency’s move to shut down or reconfigure existing coal-fired power plants in Michigan.
As the Republican campaign rallies in battleground states this week, it would do well to endorse US renewable fuel mandates, according to Republican Rick Santorum, a former rival for the presidential nomination. In Corn Belt states like Iowa, Trump could bolster his credibility with Republican voters by championing the 11-year-old US programme that requires renewable fuels, including corn-based ethanol, to be blended into gasoline. Farmers in the corn-rich Midwest are fighting to preserve the mandate, due for governmental review in 2022.
Trump backs the Renewable Fuel Standard, and has said that annual quotas should be increased. Clinton also supports the programme but is pushing for higher-ethanol blends of gasoline and developing alternative advanced biofuels that are not produced from food crops.
A strong proponent of the renewable energy transition, Clinton would like to see a seven-fold increase in solar capacity by 2020. Her proposals include offering incentives to states that exceed carbon reduction requirements and awarding communities that make it easier to install solar panels. If elected, Clinton is also expected to defend the energy and environmental efforts taken by the Obama administration, including defending the Clean Power Plan in court and seeing through a comprehensive study of coal-leasing rules on public lands.
In other policy news, China’s government is hoping the UK will come to a decision as soon as possible on the proposed Hinkley Point C nuclear plant in Southwest England. Chinese ambassador Liu Xiaoming said that cancellation of the GBP 18bn ($24bn) project could affect trade relations between the UK and its largest trading partner outside the EU, in an opinion piece published today in the Financial Times. Following construction approval by project developer Electricite de France at a board meeting last month, the British government said it needs more time to review Hinkley, delaying the final decision until September.
If Hinkley were to be cancelled, the capital expense for the required additional gas capacity to plug the shortfall would be GBP 4.6bn – some 15% of the cost of the support incentive for Hinkley, according to Victoria Cuming, head of European policy at BNEF, in this note.
As the 2016 Olympic Games unroll in Rio de Janeiro this week, athletes may struggle to break world records as they compete in Brazil’s rising temperatures brought about by climate change, according to a report by Observatorio do Clima, a Brazilian civil society group. Brazil has warmed one degree Celsius in the past 54 years – surpassing the global average temperature rise – and four of its cities broke new heat records in 2015, the report said.
In other Brazilian news, Actis announced plans to invest at least BRL 1.4bn ($436m) to buy and expand solar and wind projects in the South American nation. The UK-based private equity firm last month acquired Brazilian company Atlantic Energias Renovaveis, in the wake of several other clean-power deals struck in recent months, as Brazil’s weak economy makes deal-making easier.
Brazil will auction wind and solar power in December, where the lowest-bidding energy developers will sign 20-30 year power contracts with electricity distributors. Renewable energy developers have applied to sell as much as 35GW of capacity from 1,260 projects in the competitive bidding process – two thirds of which are wind farms.
Brazil’s desire to transition its energy mix away from potentially environmental and socially damaging large hydroelectric plants, was evidenced last week when its Environment Ministry denied a licence for the 8GW Sao Luiz do Tapajos Dam – conceived as the largest hydroelectric plant to be built in the Brazilian Amazon. Grounds for denial were that it would harm the environment and indigenous populations.
The contribution from existing renewables in the US and the pipeline build will account for the majority of renewable energy generation in the 2020s, even if the Clean Power Plan (CPP) target build were to be enforced, according to Bloomberg New Energy Finance using EPA data.
Under business-as-usual (BAU) where the CPP is not implemented, EPA modelling suggests total renewable generation would reach 797TWh by 2030. Whereas if all states comply with the CPP mass-based emission targets, renewable generation would reach 833TWh in 2030 – a less than 5% increase in total renewable generation expected under BAU.