Political parties in the US, UK and Europe are starting to ready themselves for major elections in 2024, and stories from the last two weeks show that the climate and support for renewable energy could feature heavily.
It’s a bit early to make predictions for next year. We usually do that in the run-up to Christmas, not Easter. But we can’t ignore the ‘culture war’ brewing for renewables.
For those of you who don’t know, a ‘culture war’ is a row between opposing groups – typically conservative and liberal political parties – with different philosophies. A good recent example would be about wearing face masks during the Covid pandemic.
In recent weeks, we’ve seen enough to know that a fierce debate about renewable energy will be a feature of political discourse in the western world for the next year. The US goes to the polls in November 2024 to elect a new president; the UK is set for a general election before January 2025, most likely next autumn; and countries in the European Union are poised to elect a next EU parliament in June 2024. We expect the direction and costs of energy policy to be major topics in each election.
This is an opportunity and threat for those in the wind industry. The opportunity is to make the case for cheap renewables to the public, but the threat is any debate becomes muddied with spurious anti-renewables arguments. Companies should be ready because it is unviable for the wind industry to simply refuse to engage.
Last week, the US Department of the Interior announced its plan to lease three oil and gas exploration sites in the Gulf of Mexico between 2024 and 2029. This is the lowest number of sites offered in a leasing round since the start of the programme in 1980, and is far below the 47 planned by the previous Trump administration.
The Biden administration said these leases would enable the US Bureau of Ocean Energy Management to extend its offshore wind leasing activities through to 2030. The Inflation Reduction Act (IRA) dictates that future offshore wind leasing is linked to the leasing of new oil and gas drilling sites. But neither side is happy.
Environmentalists argued that even three leases goes against the administration’s ‘green’ policies and show it is ignoring climate change. Some of them even argued the administration could have satisfied the IRA by leasing just one site. Meanwhile, Republicans and oil groups said the drastic cut undermines US energy policy.
This gives a flavour of what the US energy debate will be like until the end of 2024. Republicans say they will repeal IRA tax breaks for renewables if their candidate, most likely former president Donald Trump, wins the presidency. His former vice president Mike Pence said Biden has “declared a war on energy”, even while US fossil fuel production is booming and Republican states benefit from renewables.
By contrast, Democrats have hinted that even bigger climate support could follow if their candidate, most likely President Biden, wins again. But there will also be a loud minority of Democrats who argue that Biden hasn’t been green enough. We shouldn’t underestimate the potential damage to Democrats from ‘friendly’ fire.
Renewable energy companies must be aware that they will be in the spotlight, and should take any opportunities to inform politicians and win around the public.
This ‘culture war’ won’t be a solely US affair. In the last month, UK Prime Minister Rishi Sunak has reversed or watered down crucial net zero policies, by delaying a ban on the sale of new petrol and diesel cars from 2030 to 2035; and relaxing the planned 2035 date for phasing out new gas boilers. It is clear that Sunak wants to win over the climate change sceptics in his Conservative Party, and suggest that measures to achieve net zero emissions will mean extra expense for consumers.
Incidentally, Trump has backed Sunak’s strategy, calling it “smart” and arguing that those who warn about climate change are taking part in a “great green hoax”.
We are also yet to see progress on Sunak’s much-talked-about move last month to end an effective ban on new onshore wind farms in England. Sunak’s plan must be backed up with planning reforms that will be controversial to many in his party.
Meanwhile, the climate and renewables will likely feature heavily in the EU election in 2024 too, and may lead to changes to the framework for the EU Green Deal. It is tough to predict how this will play out in the EU, but we are seeing conservative parties on the rise in much of the west. Typically, that means more scepticism.
We think there are two principles to follow right now.
First, we shouldn’t be alarmist. Conservative parties in power tend to do less harm to renewables than the sector may fear. They operate in a democratic system with many pro-renewables voices, and tend to favour policies that unlock investment. Wind and solar kept growing remarkably during Trump’s term from 2016 to 2020.
Second, we should be visible. Social media continues to polarise political debate, but we still believe there is a role for companies that can speak positively about how renewables are cost-effective, reliable and positive for the climate. This is a good time to be trying to convince politicians and the public of our value.
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