In the weeks since the presidential electoral-vote victory of Donald Trump, uncertainty about next steps in federal leadership has dominated many sectors, including the clean-energy ecosystem. As Ron Pernick and I pointed out in our Open Letter to President-elect Trump last month, his infrastructure plan may very well align with many of the interests of the broader clean-energy sector. Trump's unexpected meeting with former Vice-President Al Gore, which Gore called "a sincere search for areas of common ground," sent a potentially interesting signal - but his series of fossil fuel-championing cabinet and agency nominees since then has been distressing.
And let's face it; despite leadership on climate action by President Obama in the past two years, U.S. states (and cities) have been in the lead for some time. Moving forward, the actions of state policymakers will remain central to the growth of clean energy.
Since 2010, Clean Edge has tracked and benchmarked clean-energy policy and deployment in all 50 states, highlighting leadership in states as diverse as California, New York, Hawaii, Iowa, and Texas. We often point out how state leadership bridges the red-blue political divide. For example, on the important metric of renewable power as a percentage of total generation (in 2015), six of the top 10 states are politically red, led by Iowa at 31.3%.
Beyond the presidential vote, two notable Election Day results show that the public tends to support energy choice for both commercial and residential ratepayers. Nevada voters, by an astounding 72-28% margin, approved the first step to amending the state constitution to allow energy choice for all of the state's utility customers in an open market. And voters in Florida rejected an amendment that would have preserved utilities' monopoly on distributed solar power and continued to block third-party competitors.
A dozen states now have RPSs that are aiming for 25% or more of their electricity to come from renewables. And California, the sixth largest economy in the world (with an RPS mandate of 50% by 2030), has already made overtures to the United Nations that the state will look to sign onto the Paris Climate Agreement if the U.S. pulls out.
More recently, the trend of major corporations buying clean energy to power their operations has skyrocketed. Corporate power purchase agreements (PPAs) for renewables nearly tripled to 3.24 gigawatts in the U.S. in 2015, outpacing renewables PPAs from utilities for the first time. The sentiment that corporations will continue their carbon reduction efforts was strong at Triple Pundit's Companies vs. Climate Change conference earlier this month in south Florida, which is arguably ground zero for climate change impacts in the continental U.S. because of rising sea levels. The occupant of the White House matters, but has less impact on this trend than many might think. "No one here decided to pursue clean energy because the government or Obama told them to," said Hans Royal, associate VP of strategic renewables at corporate energy procurement consultancy Renewable Choice Energy.
A rapidly increasing numbers of corporations (and other large energy buyers like universities) are committed to clean energy, and have made it known that they don't intend to have a presidential election result slow them down. More than 360 companies, including global giants like Allianz, DuPont, General Mills, Intel, Nike, and Unilever, signed a letter last month urging President-elect Trump to continue U.S. participation in the 2015 Paris Agreement on climate action.
And in another trend that bears watching, some corporations in regulated markets are also starting to flex their muscle by "exiting" from their utility to choose other energy providers - and placing a financial bet that it's worth hefty exit fees to do so. In October, Las Vegas-based MGM Resorts International paid NV Power $86.9 million to exit the utility and pursue its own electricity procurement and management, and Vegas rival Wynn Resorts did the same (paying $15.7 million). Caesars Entertainment joined the trend last week, applying to the Nevada Public Utilities Commission for an exit. In Washington State, Microsoft is reportedly in negotiations with utility Puget Sound Energy about becoming a "transmission only" customer. Microsoft has established an internal price on carbon and has been among the leaders in corporate PPAs for renewables.
Utilities, and the state commissioners and legislators who regulate them, need to heed these winds of change. With wind and solar power now competitive with fossil fuel-powered generation in many markets, the financial fundamentals underpinning the transition to a clean-energy economy are solid and will continue beyond the upcoming change in federal leadership. The shift is based on economics, not politics, and forward-looking states and corporations will reap the benefits. Tim Healy, CEO of energy management software provider EnerNOC, noted at the Companies vs. Climate Change conference that climate change ranks in the top five business concerns for global CEOs, according to Chief Executive magazine. "Corporate America," he said, "is not going to stand still or be deterred on its carbon reduction efforts."
For economic reasons alone, I agree with that - for both corporations and states. And let's not forget, the practice of states setting their own policy directions apart from the feds has been a strong Republican principle for many years. In the wake of a sea-change presidential election, the months and years ahead are rife with uncertainty on many fronts. But it's a safe bet that in the U.S., states and corporations will continue to lead the clean-energy revolution.