One of Joe Biden’s first actions as president was to sign a wave of executive orders on Inauguration Day to undo the legacy of former President Donald Trump, who ignores climate change – a step that ushers in a new era for the booming industry for renewable energy.
President Biden decided last week to rejoin Paris’s rural climate agreement, which was aimed at reducing the world’s carbon footprint over the next few decades and revoking the permit to build the controversial Keystone XL oil pipeline. He also signed an order reversing the reversal of vehicle emissions standards and re-establishing a working group on the social costs of greenhouse gases. Previously, he drew up a $ 2 trillion plan to put the country on an “irreversible path” to net carbon emissions by 2050.
“An exclamation point is coming from the planet itself,” Biden said in his inaugural address last week. A cry that can no longer be desperate or clear. ‘
Biden’s rapid action on climate change is reflected in the oil industry. The U.S. Petroleum Institute, a lobbying group in the industry, said it was supportive of rejoining the Paris Agreement, but called Biden’s order to recall the Keystone pipeline a slap in the face to thousands of union workers. . ‘
“The retraction of the Keystone XL pipeline is an important step backwards for the progress of the environment and for our economic recovery,” the group said in a press release. “This wrong move will hamper America’s economic recovery, undermine North American energy security and hamper relations with one of America’s biggest allies.”
Some European oil companies have already begun the shift to renewable energy. Royal Dutch Shell told investors in April that by 2050 it intends to achieve net emissions in its operations and invest in hydrogen fuel, a carbon-free fuel that burns with oxygen that can power aircraft and cars. Over the past year, BP has led under oil to renewable energy under the leadership of its new CEO, Bernard Looney. In September, the company launched an initiative that would reduce oil exploration and increase its capacity for renewable energy twentyfold.
“Our new strategy is going to turn BP into a whole different company, not overnight, given our size and scope, but fast because the world needs to change,” Looney told investors. “And importantly, we want to be part of the change.”
While some of those left behind in the U.S. oil industry are at risk of losing ground in this new era, there is a whole new winner. According to Steve Fleishman, a senior analyst at Wolfe Research, Wall Street dollars have flowed into green energy supplies since Biden promised to win the White House. Since the summer, an index of solar stocks called the Invesco Solar ETF has raised the price by about 150 percent, compared to about 18 percent for the S&P 500.
“Clean energy supplies have been performing better for a long time, but it has just reached a whole new level,” Fleishman said. “It was only subordinated again after the Democrats won the Senate.”
Investors bet the Biden government will accelerate the renewable energy industry, from green power to electric vehicles to wind-powered batteries to commercial buildings without emissions. The industry has already grown in part due to a number of state and local tax credits that encourage investment in green energy. The credits have paid off: The price of renewable energy has dropped dramatically over the past four years, which according to Michael Weinstein, research analyst at Credit Suisse Securities, was cheaper than coal or gas.
Under Biden’s climate policy, demand for clean energy could potentially double in the next 15 years, Weinstein told investors last week. According to Mark Haefele, an analyst at UBS, the clean energy industry is on track to see annual earnings growth of 5 to 10 percent over the next two decades, which will require a $ 58 billion investment by 2040.
“As governments and businesses place more emphasis on climate issues, we think sustainable strategies will benefit in a post-pandemic world,” Haefele told investors on Thursday.
Some of the country’s largest clean energy companies have already grown in Washington, DC, through organizations such as the Renewable Energy Buyers Alliance, which represents Amazon, Google, Facebook, General Motors and 300 other companies.
“Our policy priorities are on the demand side to unlock the market,” said Miranda Ballentine, CEO of Renewable Energy Buyers Alliance and former Director of Global Renewable Energy Sustainability at Walmart. “These are iconic American brands that put their name on policy priorities, which is pretty unusual because they are not energy companies.”
But new lobby groups have sprung up around the Capitol. The Zero Emission Transportation Association, launched in November, plans to push Congress to fund the construction of new charging stations for electric cars and provide tax credits to consumers and businesses to buy emission-free vehicles. In September, the American Clean Power Association under Heather Zichal, a former Obama administration climate adviser, began advocating for solar and wind companies.
Among the group’s members are Google, which operates two wind farms in North Dakota; and NextEra, a lesser-known renewable energy company whose market valuation is closer to that of oil giant ExxonMobil. Apart from the lobby group, Florida-based NextEra has spent billions of dollars building its empire on the renewable energy industry across the country. The company has sued public service commissions over laws encouraging suppliers to use local electricity companies in Texas and the loss of a utility contract to a competitor in Massachusetts.
According to David Reuter, a spokesman for NextEra, he declined to comment on the lawsuit.
Just like in other sectors, small businesses in the renewable energy industry have been hammered out by the coronavirus, which puts larger companies in a better position from future federal tax credits that may accompany the new administration.
“These transactions are not negotiation steps, and they usually involve a lot of legal costs that smaller developers and investors can put more effort into making the transaction worthwhile,” said Adam Wilson, an analyst at S&P Global Market Intelligence. said.
‘I do not want to make it sound as if smaller players can not take advantage of these transactions at all – that is certainly not true. But the setup, as it is, does benefit bigger players, “said Wilson.
Biden has not yet specified how its administration will structure the tax credits to boost the emerging market for wind and solar projects.