As with solar projects, wind farm developers often bank on a set of federal tax credits that Congress extended in late 2015. It’s possible these incentives could come under scrutiny as part of a Trump tax overhaul. He’s been critical of the wind power industry’s subsidies. But like solar developers, wind farm developers will continue to benefit from the state’s steadily increasing requirements for renewable energy purchases. The state has a law on the books that allows for up to 1,600 megawatts in long-term contracts with future offshore wind farms — that’s roughly enough power for more than 600,000 homes. Those wind farms would be built in federal waters, and three developers — including one with ties to investment bank Goldman Sachs, and another owned by private equity giant Blackstone Group — already have secured lease rights. It’s possible that the Trump administration could slow the progress of any projects because they come under federal jurisdiction. But that would also irritate the Wall Street types that have invested in these projects.
Restore coal mining to its previous prominence. Abandon the Clean Power Plan. Uncork the Keystone XL and Dakota Access pipeline projects.
President Trump promises to bring big changes to how and where we get our energy, driven in part by his fossil fuel fandom and a self-professed skepticism about man-made climate change.
But figuring out the long-term impact on New England’s energy industries is complicated, especially with Trump’s team still being assembled. He has picked leaders for several key agencies. Most notably, former Exxon Mobil chief executive Rex Tillerson is now secretary of state, and former Texas governor Rick Perry has been chosen to run the Department of Energy. But the Federal Energy Regulatory Commission, down to two of five members as of last Friday, lacks a quorum. That means it can’t make major decisions until Trump appoints at least one new commissioner.
Regardless of what happens in Washington, Massachusetts and nearby states will be able to keep advancing several significant energy policies unimpeded. The region already has aggressive greenhouse gas controls that will be in place even after the Clean Power Plan – an Obama administration creation aimed at curbing power plant emissions – goes away as expected under Trump’s Environmental Protection Agency. Also, Massachusetts’ plans to tap into huge amounts of hydropower in Canada and offshore wind power south of Martha’s Vineyard are moving ahead.
But even with those programs in place, there’s plenty of uncertainty about the impact the change in administration will have on the energy sector here.
Research and startups
Experts say the greatest local impact could be felt among the Boston area’s universities and early-stage clean-tech firms. The millions of dollars that the federal government spends annually on research grants could be a prime Trump target. At particular risk is the ARPA-E grant program, which funds high-tech energy research and is administered by the Department of Energy. Massachusetts has been the second largest recipient of ARPA-E funds after California, with more than $150 million flowing to the state since the program’s inception in 2009.
Trump is fond of coal. New England power generators, not so much. Only about 1 percent of the regions’s electricity still comes from coal. Brayton Point, Massachusetts’ last coal-fired power plant, is closing in June. Trump’s election isn’t going to change that. Connecticut’s final coal plant is scheduled to be converted to natural gas, and Eversource is selling two coal-run plants in New Hampshire that face an uncertain future. Environmental rules have played a role in coal’s demise, but the competition from cheap natural gas is the primary reason it’s no longer in demand here.
A proliferation of natural gas power plants in New England helped keep a damper on energy prices, but the plants also created a new set of issues. Most notably, the region’s constrained pipeline system is creeping closer to its cold-weather capacity. That’s why pipeline operator Spectra Energy teamed up with utilities Eversource and National Grid for a massive – and controversial – expansion project known as Access Northeast. The Federal Energy Regulatory Commission has shown a willingness to approve large pipeline projects in the face of local opposition; witness last month’s approval of another Spectra project that included a much-maligned Weymouth compressor facility that will help regulate the flow of gas in the area. Jim Grasso, a government relations consultant who works with energy-industry clients, says Access Northeast is more likely to materialize under a Trump presidency than it would have been if Hillary Clinton had won the election.
But the biggest hurdle Access Northeast faces isn’t getting permits – it’s the project’s $3 billion-plus price tag. And it’s not clear if Trump can help with financing. Efforts to pass on the costs to electricity ratepayers last year met resistance from the state Supreme Judicial Court, which ruled against the idea, and later from regulators in other New England states.
State officials are moving ahead with a bidding process for “clean energy” contracts aimed at prompting at least one major new power line to be built that will bring Canadian hydropower into southern New England.
Eversource spokeswoman Caroline Pretyman says the Department of Energy is weighing its request for a permit for the company’s Northern Pass project in New Hampshire that would allow the power line to cross the border into Canada. The federal agency will make a recommendation, she said, but ultimately, the decision would be Trump’s. (New Hampshire officials also will have a say.) Energy experts predict Trump would be predisposed to approve such a project, despite the fact the power would come from a foreign source. A similar transmission line, one that would connect Canadian hydropower to the New York City area, was included on a recent list of infrastructure priorities reportedly circulated by the Trump transition team.
Congress in late 2015 extended the life of a federal tax credit program that many solar developers use to finance projects, but it’s scheduled to be phased out over the next several years.
Some clean-energy experts fear the tax credit could get jettisoned amid the wholesale restructuring of the government’s tax codes envisioned under Trump’s leadership and the Republican-controlled Congress. Others say they would be surprised if Congress revisited energy tax credits so soon after extending them.
Meanwhile, state officials control two other types of incentives for solar developers, and those are likely to be slowly pared. At the same time, however, the state’s legal requirements for utilities to purchase certain amounts of renewable power will continue to grow each year, regardless of who is in the White House.
As with solar projects, wind farm developers often bank on a set of federal tax credits that Congress extended in late 2015. It’s possible these incentives could come under scrutiny as part of a Trump tax overhaul. He’s been critical of the wind power industry’s subsidies. But like solar developers, wind farm developers will continue to benefit from the state’s steadily increasing requirements for renewable energy purchases. The state has a law on the books that allows for up to 1,600 megawatts in long-term contracts with future offshore wind farms – that’s roughly enough power for more than 600,000 homes.
Those wind farms would be built in federal waters, and three developers – including one with ties to investment bank Goldman Sachs, and another owned by private equity giant Blackstone Group – already have secured lease rights. It’s possible that the Trump administration could slow the progress of any projects because they come under federal jurisdiction. But that would also irritate the Wall Street types that have invested in these projects.
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