Clicking the undo button on clean air

The US turns away from clean power plan as India mulls its options

March 2017 was a critical month for the clean energy sector. In the US, President Donald Trump decided that the Clean Power Plan of the Obama era can be put to rest; UK Prime Minister Theresa May formally communicated to the European Union the country’s intention to exit from the 28-country grouping, even as demand for another vote on Scottish independence picked up steam, raising concerns about energy investments; and Tesla Motors’ Elon Musk offered to solve Australia’s power outage problems with cost-effective storage.

Clean Power Plan: It was aimed at curbing pollution from coal-fired power plants while increasing generation from lower-carbon generation sources.  On full implementation in 2030, carbon pollution from the power sector was to be 32 per cent below 2005 levels. Emission of sulphur dioxide from power plants was to be 90 per cent lower and of nitrogen oxides, 72 per cent lower. The pullback of the plan — Trump has sought an “immediate re-evaluation” — is expected to have limited impact on the renewable energy industry though, which is progressing on its own economic momentum and is being helped by action from companies.

Google, for instance, is set to be a 100 per cent renewable energy-powered company this year. In a blog post in December last year, Urs Holzle, senior vice-president, said that in 2017, “Google will reach 100% renewable energy for our global operations — including both our data centres and offices”. He also said the company’s ultimate goal is to enable access to clean energy for all. Almost 90 companies have made the pledge to be completely powered by renewable energy. The world’s largest brewer, Anheuser-Busch InBev, joined this RE100 pledge last week, with a target year of 2025.

In India, attempts to limit emissions from its thermal power plants are facing opposition, as there is a cost associated with compliance with these norms. Emissions from vehicles will be controlled, with the Supreme Court banning the sale of vehicles that do not comply with the latest Bharat Stage IV emission norms, from April 1, 2017.

Brexit: It moved to a more concrete phase, but there are questions over the fate of energy trade between the UK and the European Union (EU), and of future investments in clean energy, especially in offshore wind. The UK will “remain part of the European Union Internal Energy Market — in some capacity”, according to Bloomberg New Energy Finance. The UK imports as much as seven per cent of its electricity from the bloc, and is expanding interconnections with the EU. Meanwhile, Ireland, which will continue to be an EU member, accesses most of its energy supplies through Britain.

While the UK was signalling its exit from the EU, and probably from the European single market, too, India moved another step closer to its own single market, with Parliament’s lower house approving a nationwide goods and services tax to replace a bevy of federal and state taxes. The investor-friendly move could have some tax implications for the clean energy industry.

Energy storage: It was in the news in Australia with Tesla’s Musk offering, via a tweet, to fix South Australia’s energy crises with 100 megawatts of batteries installed in 100 days. The region has a high 41 per cent renewables penetration, and has been through some power outage incidents in the recent past. There has been a loud debate over whether there was any link between those outages and the state’s clean power policies.

Grid-scale storage is picking up pace. California got the world’s biggest system — 30 megawatts — earlier this year. The installation boasts 400,000 lithium-ion batteries. AES, which built that installation, is also building India’s first grid-scale storage system — 10 megawatts in size — in partnership with Mitsubishi.

The author is editor, Global Policy, for Bloomberg New Energy Finance; vgombar@bloomberg.net