Green Energy Faces New Political Reality

Green-energy companies are freaking out, trying to figure out how to navigate the Republican sweep of the White House and Congress.

After being a favorite punching bag of Presidentelect Donald Trump’s campaign, they are contacting incoming cabinet appointees, hunting for friendly members of the transition team and calling on Republican members of Congress, according to executives. Some say they raced to order equipment or move dirt on projects before the new year to grandfatherin lucrative tax credits.

Stakes are high. Significant reductions to tax credits, and Trump’s promised tariffs on imports, could reduce investment in new renewables plants by $350 billion during the next decade, said Chris Seiple, vice chairman of power and renewables at Wood Mackenzie.

Defense mode

In Washington, D.C., the industry has gone into defense mode. Executives traveled to the capital to meet with Republican members of Congress in December, say people familiar with the matter. Advisers have suggested the industry tweak its talking points. Instead of touting projects as “clean and affordable,” renewables firms are highlighting their projects’ ability to “meet energy needs.”

Some executives say they are pinning their hopes on North Dakota Gov. Doug Burgum, Trump’s choice for Interior Department secretary who also would chair a planned National Energy Council.

North Dakota is a coal and oil state, but under Burgum it has welcomed wind energy, which provided 36% of its power generation in 2023. The executives are cautiously optimistic that Burgum’s businessfriendly background will translate to a pragmatic approach at Interior, which oversees public lands and minerals, including energy development such as solar farms and offshore wind projects.

Above all, many in the industry hope that the country’s growing need for more electricity—to power things such as AI data centers—will carry the day.

“It’s all about demand right now,” said Jim Murphy, president and co-founder of Invenergy, a developer of renewables, transmission and natural-gas power. “If you look at the forecasts, we’re going to need everything as fast as we can get it.”

Solar, wind and battery storage have been on a tear in recent years, with investment boosted by tax credits in the Inflation Reduction Act, President Biden’s signature climate law.

About $75 billion in new projects connected to the grid between September 2022 and March, according to the American Clean Power Association.

Trump has called the IRA a scam and wants it repealed. His victory has plunged the renewable-power industry into a period of policy uncertainty . Few expect a wholesale repeal, but parts of the IRA are likely to be scrapped.

AI factor

One helpful trend for the industry is that after roughly two decades of little to no growth in power demand because of efficiency gains, electricity-usage forecasts have skyrocketed in many states because of the spread of AI, EVs, manufacturing and broader electrification efforts. Utilities compare it with the introduction of air conditioning.

That trend has allowed companies to take a page out of the playbook of the oil-andgas industry, which spent the past four years under the Biden administration using terms such as “addition, not subtraction” to talk about energy sources.

Sheldon Kimber, chief executive of clean-energy developer Intersect Power, said a key message to members of Congress is to preserve the “durability of the IRA and the tax credits in a world where demand is off the charts,” and not to make any changes retroactive. Intersect has a $20 billion plan to build renewables and batteries at new data centers with Alphabet’s Google and private-equity firm TPG.

Some green executives hope Tesla CEO Elon Musk will play a mitigating role in Trump’s view on renewables. Tesla makes batteries for EVs and grid-scale storage projects, and sells home solar and storage. Likewise, Chris Wright,

Trump’s choice for energy secretary, touts fossil fuels as a way to end energy poverty but is viewed by renewables developers as a pro-business company founder. Wright’s Liberty Energy has invested in green-energy startups pursuing nuclear and geothermal projects.

Trump has said he wants to unleash more U.S. oil and gas production, but tax credits for wind and solar survived and were extended under the first Trump administration, said Akshat Kasliwal, head of renewable asset analytics at PA Consulting.

“At that time, we were not facing reliability issues to the extent we are now,” Kasliwal added.

Tax cuts passed in 2017 during Trump’s first term will expire at the end of this year, and Republican leaders say extending them is a must. They will look to cut trillions of dollars to offset deficits. Repealing clean-energy subsidies in part or whole repeatedly has been mentioned as a potential source of funding.