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Mint
23-07-2025
- Business
- Mint
What happens if the Inflation Reduction Act goes away?
'IT'LL BE somewhere between a scalpel and a sledgehammer," was how Mike Johnson, speaker of the House, described the emerging Republican approach to the Inflation Reduction Act (IRA), Joe Biden's signature climate law. Pressure from companies and congressmen with clean-energy projects benefiting from its subsidies in their districts (most are found in Republican counties) suggested surgical precision would prevail. But relentless pressure to abolish the IRA from the president, who is a fan of drilling, baby, drilling and denounced the law as the 'Green New Scam", pointed instead to brute force. The president reinforced this by dropping in on a private party caucus on May 20th to strong-arm waverers and threaten dissenters with a MAGA primary challenge. 'They won't be Republicans much longer…they'd be knocked out so fast," he declared. The House has already approved a draft law that, when it comes to the IRA, looks more like a sledgehammer. Next the Senate will get to work on its proposal. The two versions will then be reconciled by committee. The White House wants the compromise deal ready by July 4th, though August seems more realistic (a collapse of the whole effort remains possible, too). All this sausage-making raises two questions for energy policy. Is the IRA dead? And if it is, will that end America's clean-energy boom and herald a sooty recarbonisation of the economy? At first glance the bill seems more scalpel-like. The House proposal phases out renewable subsidies between 2029 and 2032, in line with the IRA's original timeline. It includes seemingly innocuous rules on which institutions are eligible for tax credits and keeping China out of the energy supply chain. The original law aimed to make clean energy politically popular in America by subsidising domestic manufacturing of solar panels, wind turbines and other components. Voters might not prioritise reducing carbon emissions, the theory went, but they do like domestic manufacturing. There ought to be some overlap with the new orthodoxy on economics. Because the cost of tax credits depends on private investment plans, estimates of the bill's effect come in a range rather than a dollar amount. The American Action Forum, a conservative think-tank, reckons the bill would trim about 60% of the IRA's tax credits, saving $515bn by 2034. The Cato Institute, a libertarian think-tank which previously warned that the IRA's uncapped provisions could cost $4.7trn by 2050, has called the Republican effort too timid. That makes it sound as if it falls short of the president's aim to kill the IRA. Look closer, though, and the proposal brims with rules designed to stifle clean energy. 'It is a sledgehammer masquerading as a scalpel," says Abigail Ross Hopper, head of the Solar Energy Industries Association, a lobby group. Wood Mackenzie, an energy consultancy, argues that the details will undermine the business case for 'the vast majority of clean energy projects in the United States". Three provisions in particular stand out. First, the bill kills 'transferability". The IRA incentivised companies with a wide range of tax liabilities to invest in clean energy. The new bill eliminates this sweetener, even for technologies like nuclear power and carbon capture that are generally favoured by Republicans. Second, provisions regarding 'foreign entities of concern" (read: China) are written with calculated vagueness. While Biden-era rules narrowly restricted imports of Chinese battery cells, the new legislation is at once sweeping and impenetrable. Credits appear denied if 'any component, subcomponent, or applicable critical mineral" is 'extracted, processed, recycled, manufactured, or assembled" with forbidden foreign connections. Various such provisions guarantee years of regulatory confusion. Higher tariffs on Chinese-made components would come on top of that. The third change is the timing of payments. Currently, projects qualify for tax credits from when construction begins but earn them only when operational. The new proposal awards credits only after operations begin. Given the vagaries of permit-granting, it can take years to start generating power. That will make it harder for new projects to earn credits. Together, these provisions make the House proposal 'unworkable", says Rich Powell, head of the Clean Energy Buyers' Association (CEBA), a trade group representing large electricity users (which include America's big tech companies). Studies commissioned by CEBA predict that the repeal effort will lead to sharp increases in electricity prices, by roughly 10% in 2026 for industrial and commercial customers. Mr Powell warns that it 'will make it harder to stand-up US manufacturing in clean energy," which ought to bother a president obsessed with factory jobs. If the outlook for the IRA seems bleak, what does that mean for energy and carbon emissions in America? Analysis by the Rhodium Group, a research firm, suggests that, under the IRA, America was on track to slash its greenhouse gases by 40% from their 2005 level by 2035. With a de facto repeal it will slow down, but may still manage a reduction of nearly 30% below the same benchmark (see chart 1). Even taking account of oil-friendly provisions in the current budget bill, such as the end of credits for purchasing electric vehicles and a repeal of more stringent fuel-economy standards for petrol vehicles introduced by the Biden administration, America will continue to decarbonise. Clean energy supply will continue to grow, but at a slower pace than it would have with the IRA. The reason, explains Kevin Book of ClearView Energy Partners, a research firm, is that tax credits are only one factor. State-level regulations like 'renewable portfolio standards" play an important role. Not only will these not be abandoned with the IRA, they may be strengthened in Democratic states. Such a 'rollback rebound" took place in response to the first Trump administration's attempted assault on green energy. Price helps, too. The International Energy Agency, an official body, estimates that unsubsidised renewables already compete with, or beat, new fossil-fuel plants in many parts of America. Rhodium projects 342GW of renewable capacity will still be added by 2035, producing as much electricity (after accounting for intermittency) as roughly 100 nuclear plants. John Ketchum, the CEO of NextEra Energy, a big utility, recently offered investors this dose of what he called energy pragmatism. 'Renewables are here today. You can build a wind project in 12 months, a storage facility in 15, and a solar project in 18 months." Gas turbines, by contrast, require four years or more to build, obtain permits and connect to the grid. Last year, 90% of new power capacity in America came from carbon-free sources. Fresh data from the early days of Mr Trump's second term confirm that over half of all electricity in March came from non-fossil sources for the first month on record. These may be dark days for green energy on Capitol Hill. Slowing the rate of decarbonisation is bad news. But sunlit uplands do still beckon. Editor's note: This story was updated after the House passed Republicans' draft budget bill. Stay on top of American politics with The US in brief, our daily newsletter with fast analysis of the most important political news, and Checks and Balance, a weekly note from our Lexington columnist that examines the state of American democracy and the issues that matter to voters.
American Military News
20-07-2025
- Business
- American Military News
Videos: $92 billion in energy, technology investment unveiled by Trump admin
President Donald Trump touted $92 billion in technology and energy investments in Pennsylvania by 20 different companies during a speech at Carnegie Mellon University on Tuesday. The president claimed that the investments reflect the 'true golden age' of the United States. 'I think we have a true golden age for America. And we've been showing it, and it truly is the hottest country anywhere in the world,' Trump said during Tuesday's Pennsylvania Energy and Innovation Summit at Carnegie Mellon University. 'And you're going to see some real action here. So get ready.' .@POTUS: "We are building a future where American workers will forge the steel, produce the energy, build the factories… I think we have a true Golden Age for America… it truly is the HOTTEST country anywhere in the world." 🔥 — Trump War Room (@TrumpWarRoom) July 15, 2025 'This afternoon, 20 leading technology and energy companies are announcing more than $92 billion of investments in Pennsylvania,' Trump said. 'This is a really triumphant day for the people of the Commonwealth and for the United States of America. We're doing things that nobody ever thought possible.' 🚨@POTUS announced $92 BILLION of investments coming to Pennsylvania!💸 — The White House (@WhiteHouse) July 15, 2025 According to The Daily Caller, the $92 billion in technology and energy investments announced at Tuesday's summit include investments in Pennsylvania's natural gas plants, hydropower facilities, and artificial intelligence data centers. During Tuesday's Pennsylvania Energy and Innovation Summit, Trump explained that the energy and technology investment commitments by 20 different companies will ensure that 'the future is going to be designed, built and made right here in Pennsylvania and right here in Pittsburgh, and, I have to say, right here in the United States of America.' READ MORE: Video: 'American Drone Dominance' unleashed by Trump admin The president added that the investments discussed at Tuesday's summit include over $36 billion in new data center projects and over $56 billion in new energy infrastructure. Trump also noted that 'a lot more' investments would be 'announced in the coming weeks.' The White House confirmed that Tuesday's investments include a $25 billion investment by Google into infrastructure and data centers, a $25 billion investment by Blackstone into natural gas plants and data centers, and a $6 billion investment by CoreWeave into data center expansion. Trump also announced on Tuesday that Knighthead Capital Management is investing $15 billion to help 'resurrect' the Homer City Generating Station. The president said the former coal-fired power plant will become the 'largest natural gas-fired power plant ever to be built in North America.' .@POTUS: I promised I would save the Homer City Power Plant that Biden's Green New Scam forced to shut down — and I'm pleased to report that with a $15B dollar investment from Knighthead Capital Management, the Homer City site is being resurrected as the largest natural gas-fired… — Rapid Response 47 (@RapidResponse47) July 15, 2025
National Observer
18-07-2025
- Business
- National Observer
All wind and solar energy projects to be personally approved by US Interior Secretary
WASHINGTON (AP) — All solar and wind energy projects on federal lands and waters must be personally approved by Interior Secretary Doug Burgum under a new order that authorizes him to conduct 'elevated review' of activities ranging from leases to rights of way, construction and operational plans, grants and biological opinions. The enhanced oversight on clean-energy projects is aimed at 'ending preferential treatment for unreliable, subsidy-dependent wind and solar energy," the Interior Department said in a statement Thursday. The order "will ensure all evaluations are thorough and deliberative" on potential projects on millions of acres of federal lands and offshore areas, the department said. Clean-energy advocates said the action could hamstring projects that need to be underway quickly to qualify for federal tax credits that are set to expire under the tax-cut and spending bill that President Donald Trump signed into law on July 4. The law phases out credits for wind, solar and other renewable energy while enhancing federal support for fossil fuels such as coal, oil and natural gas. 'At a time when energy demand is skyrocketing, adding more layers of bureaucracy and red tape for energy projects at the Interior Department is exactly the wrong approach,'' said Stephanie Bosh, senior vice president of the Solar Energy Industries Association. 'There's no question this directive is going to make it harder to maintain our global (artificial intelligence) leadership and achieve energy independence here at home.'' In the legislation, Trump and GOP lawmakers moved to dismantle the 2022 climate law passed by Democrats under President Joe Biden. And on July 7, Trump signed an executive order that further restricts subsidies for what he called 'expensive and unreliable energy policies from the Green New Scam.' That order was part of a deal the Republican president made with conservative House Republicans who were unhappy that the tax-cut bill did not immediately end all subsidies for clean energy. A group of Republican senators, including Alaska Sen. Lisa Murkowski and Utah Sen. John Curtis, had pushed to delay phaseout of some of the credits to allow currently planned projects to continue. Trump has long expressed disdain for wind power, describing it at a Cabinet meeting last week as an expensive form of energy that 'smart' countries do not use. Even with the changes approved by the Senate, the new law will likely crush growth in the wind and solar industry and lead to a spike in Americans' utility bills, Democrats and environmental groups say. The law jeopardizes hundreds of renewable energy projects intended to boost the nation's electric grid as demand is set to rise amid sharp growth from data centers, artificial intelligence and other uses, they said. "This isn't oversight. It's obstruction that will needlessly harm the fastest growing sources of electric power,'' said Jason Grumet, CEO of the American Clean Power Association, an industry group. He called the move 'particularly confounding' as lawmakers in both parties seek to streamline permitting for all sources of American energy. 'Level the playing field' The Interior Department said Thursday that Burgum's order will 'level the playing field for dispatchable, cost-effective and secure energy sources,' such as coal and natural gas 'after years of assault under the previous administration.″ 'American energy dominance is driven by U.S.-based production of reliable baseload energy, not regulatory favoritism towards unreliable energy projects that are solely dependent on taxpayer subsidies and foreign-sourced equipment,' said Adam Suess, the acting assistant secretary for lands and minerals management. While Democrats complain the tax law will make it harder to get renewable energy to the electric grid, Republicans say it supports production of traditional energy sources such as oil, gas and coal, as well as nuclear power, increasing reliability. In the Senate compromise, wind and solar projects that begin construction within a year of the law's enactment are allowed to get a full tax credit without a deadline for when the projects are 'placed in service,″ or plugged into the grid. Wind and solar projects that begin later must be placed in service by the end of 2027 to get a credit. The law retains incentives for technologies such as advanced nuclear, geothermal and hydropower through 2032. About 10% of new solar power capacity under development is on federal lands, said Sylvia Leyva Martínez, a principal analyst at the Wood Mackenzie research firm. Those projects could be delayed or canceled if Burgum does not issue permits for them, she said. Related projects such as transmission lines could be affected, too, she said. While only about 1% of the combined capacity of pending wind projects is on federal lands, delays could affect nearby infrastructure that supports renewable projects, said Wood Mackenzie analyst Diego Espinosa.
The Hill
17-07-2025
- Business
- The Hill
Trump increases scrutiny of solar and wind
In a press release Thursday, the department said all 'decisions and actions concerning wind and solar energy facilities will undergo elevated review by the Office of the Secretary.' This includes decisions to lease new land or water for wind and solar, approving projects on that land or water and on other activities like grants and assessments of endangered species impacts. Critics say the move is likely to slow down the process of approving renewable energy projects on public lands and represents a further attack on the sector by the Trump administration. Laura Daniel-Davis, who was the department's acting No. 2 during the Biden administration, told The Hill that 'the bottleneck of having to have everything flow up through the secretary's office is going to delay' renewable projects. Daniel-Davis said that in her experience, most energy projects — renewable and fossil fuel alike — did not go through the secretary's office, and especially not at each and every waypoint outlined by the department. 'Today's actions further deliver on President Trump's promise to tackle the Green New Scam and protect the American taxpayers' dollars,' acting Assistant Secretary for Lands and Minerals Management Adam Suess said in a statement.
The Hill
17-07-2025
- Business
- The Hill
Interior Secretary Burgum must personally approve all wind and solar projects, a new order says
WASHINGTON (AP) — All solar and wind energy projects on federal lands and waters must be personally approved by Interior Secretary Doug Burgum under a new order that authorizes him to conduct 'elevated review' of activities ranging from leases to rights of way, construction and operational plans, grants and biological opinions. The enhanced oversight on clean-energy projects is aimed at 'ending preferential treatment for unreliable, subsidy-dependent wind and solar energy,' the Interior Department said in a statement Thursday. The order 'will ensure all evaluations are thorough and deliberative' on potential projects on millions of acres of federal lands and offshore areas, the department said. Clean-energy advocates said the action could hamstring projects that need to be underway quickly to qualify for federal tax credits that are set to expire under the tax-cut and spending bill that President Donald Trump signed into law on July 4. The law phases out credits for wind, solar and other renewable energy while enhancing federal support for fossil fuels such as coal, oil and natural gas. 'At a time when energy demand is skyrocketing, adding more layers of bureaucracy and red tape for energy projects at the Interior Department is exactly the wrong approach,' said Stephanie Bosh, senior vice president of the Solar Energy Industries Association. 'There's no question this directive is going to make it harder to maintain our global (artificial intelligence) leadership and achieve energy independence here at home.' In the legislation, Trump and GOP lawmakers moved to dismantle the 2022 climate law passed by Democrats under President Joe Biden. And on July 7, Trump signed an executive order that further restricts subsidies what for he called 'expensive and unreliable energy policies from the Green New Scam.' That order was part of a deal the Republican president made with conservative House Republicans who were unhappy that the tax-cut bill did not immediately end all subsidies for clean energy. A group of Republican senators, including Alaska Sen. Lisa Murkowski and Utah Sen. John Curtis, had pushed to delay phaseout of some of the credits to allow currently planned projects to continue. Trump has long expressed disdain for wind power, describing it at a Cabinet meeting last week as an expensive form of energy that 'smart' countries do not use. Even with the changes approved by the Senate, the new law will likely crush growth in the wind and solar industry and lead to a spike in Americans' utility bills, Democrats and environmental groups say. The law jeopardizes hundreds of renewable energy projects intended to boost the nation's electric grid as demand is set to rise amid sharp growth from data centers, artificial intelligence and other uses, they said. 'This isn't oversight. It's obstruction that will needlessly harm the fastest growing sources of electric power,' said Jason Grumet, CEO of the American Clean Power Association, an industry group. He called the move 'particularly confounding' as lawmakers in both parties seek to streamline permitting for all sources of American energy. 'Level the playing field' The Interior Department said Thursday that Burgum's order will 'level the playing field for dispatchable, cost-effective and secure energy sources,' such as coal and natural gas 'after years of assault under the previous administration.″ 'American energy dominance is driven by U.S.-based production of reliable baseload energy, not regulatory favoritism towards unreliable energy projects that are solely dependent on taxpayer subsidies and foreign-sourced equipment,' said Adam Suess, the acting assistant secretary for lands and minerals management. While Democrats complain the tax law will make it harder to get renewable energy to the electric grid, Republicans say it supports production of traditional energy sources such as oil, gas and coal, as well as nuclear power, increasing reliability. In the Senate compromise, wind and solar projects that begin construction within a year of the law's enactment are allowed to get a full tax credit without a deadline for when the projects are 'placed in service,″ or plugged into the grid. Wind and solar projects that begin later must be placed in service by the end of 2027 to get a credit. The law retains incentives for technologies such as advanced nuclear, geothermal and hydropower through 2032. About 10% of new solar power capacity under development is on federal lands, said Sylvia Leyva Martínez, a principal analyst at the Wood Mackenzie research firm. Those projects could be delayed or canceled if Burgum does not issue permits for them, she said. Related projects such as transmission lines could be affected, too, she said. While only about 1% of the combined capacity of pending wind projects are on federal lands, delays could affect nearby infrastructure that supports renewable projects, said Wood Mackenzie analyst Diego Espinosa.
