United States

United States

Biden promises ‘strong action’ as Democrat senator torpedoes renewable energy plan

President Joe Biden has promised “strong executive action” to combat climate change after a Democrat senator effectively mothballed the extension of crucial production tax credits (PTCs) to support the renewable industry.

President Biden is welcomed by Saudi Arabian Crown Prince Mohammed bin Salman (Pic credit: Royal Court of Saudi Arabia/Getty Images)
President Biden is welcomed by Saudi Arabian Crown Prince Mohammed bin Salman (Pic credit: Royal Court of Saudi Arabia/Getty Images)

Talks fell apart in the US Senate last Thursday (14 July) after Senator Joe Manchin of coal-rich West Virginia torpedoed climate plans that would have supported the wind industry.

The White House has since called for executive action - which was announced during Biden’s visit to Saudi Arabia to drum up oil trade.

“Action on climate change and clean energy remains more urgent than ever,” said Biden.

Biden: ‘I will not back down’

He added: “So let me be clear: if the Senate will not move to tackle the climate crisis and strengthen our domestic clean energy industry, I will take strong executive action to meet this moment.

“My actions will create jobs, improve our energy security, bolster domestic manufacturing and supply chains, protect us from oil and gas price hikes in the future, and address climate change. I will not back down: the opportunity to create jobs and build a clean energy future is too important to relent.”

PTCs for wind and other renewables – the sector’s main support scheme which pays power producers for their electricity output – was originally to have been extended by 10 years because it is about to expire.

The $1.75-trillion ‘build back better’ bill, when introduced to the Senate, had also included an advanced manufacturing tax credit, which would have covered major wind components such as nacelles.

The direct pay provision of the PTC, in which wind and other renewables companies could have received a direct payment rather than a credit against tax owed, had already been axed last month, according to media reports.

‘Legislation required’

But Biden may now have few options. “Without legislation, it’s hard to see the US turning the kind of corner that Biden’s talked about,” said Ethan Zindler, an analyst with BloombergNEF (BNEF).

Biden has called for cutting greenhouse gas emissions by half by 2030 and decarbonising the power sector by 2035.

Zindler said that any executive action from Biden could be challenged in the courts by the fossil fuel lobby, and that Biden’s executive action could prove ineffective after the Supreme Court reined the administration and federal body the Environmental Protection Agency in a recent ruling.

Regarding Biden’s potential for executive action, Zindler said: “I think it’s a canard…. The talk of executive action is being perpetrated to keep people’s chins up, but the reality is, we need legislation.”

According to BNEF, the annual roll-out of renewables would have to double from the currently projected 35GW through 2030 – a projection that assumes no new pro-renewables policy – to at least 70GW to meet Biden’s goals.

According to current opinion polls, the Democrats may gain up to two seats in the Senate, but may also lose the House of Representatives - where they currently have a majority.

‘Modern-day villain’

Fury erupted after news broke of Manchin’s stance. “Senator Joe Manchin is a modern-day villain, who drives a Maserati, lives on a yacht courtesy of the coal industry, and is willing to see the world burn as long as it benefits his near-term investment portfolio,” fumed prominent climatologist and Penn State University professor Michael Mann.

In the 2021-22 election cycle, Manchin has been the top recipient of donations from the fossil fuel industry amongst members of the Senate, according to political donations research group Open Secrets.

The vote of Manchin, a conservative and once-obscure Democrat, has become pivotal in the evenly divided Senate in order for Democrats to advance a package that includes climate provisions.

Republicans - many of whom, clean energy lobbyists stress, are pro-renewables - did not cross the aisle to back the Democrats’ climate agenda.

“It’s infuriating and nothing short of tragic that Senator Manchin is walking away, again, from taking essential action on climate and clean energy,″ said Senator Tina Smith, a Democrat from Minnesota. “The world is literally burning up while he joins every single Republican to stop strong action to cut emissions and speed the transition to clean energy.″

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