Daily on Energy: Pulling the emergency cord on solar

In interactions with reporters yesterday, the administration downplayed the relationship between Biden’s two-year tariff “bridge” and the Commerce’s investigation, which is looking into whether Chinese companies are circumventing tariffs on solar imports, but the two cannot be understood separately.

Power play: Biden’s emergency declaration, more so than the White House’s preview, more narrowly defined the action as a response to the recent summer reliability assessment published by the North American Electric Reliability Corporation, which warned that much of the country faces a higher risk of blackouts when demand peaks due to shortages of reserve electricity-generating capacity.

“Utilities and grid operators are increasingly relying on new solar installations to ensure that there are sufficient resources on the grid to maintain reliable service,” the declaration read, adding unavailability of solar cells and modules “jeopardizes those planned additions, which in turn threatens the availability of sufficient electricity generation capacity to serve expected customer demand.”

Press Secretary Karine Jean-Pierre also said the emergency was declared under the aegis of “the threat to the availability of sufficient electricity-generation capacity to meet expected customer demand.”

The declaration also noted that U.S. manufacturing of solar cells and modules at current capacity levels is unable either “to ensure solar capacity additions necessary to achieve our climate and clean energy goals” or to “help combat rising energy prices.”

Biden wants to fully decarbonize the power sector by 2035, and is betting a lot on an exponential increase of solar installations to get there.

Enter Commerce: The emergency declaration applies specifically and only to solar cell and module imports from Cambodia, Malaysia, Thailand, and Vietnam — the four countries targeted by Commerce’s antidumping/countervailing duties investigation.

Moreover, it was introduced after weeks worth of pressure, exerted by both congressional Democrats and solar developers, on the administration to give the solar industry certainty that tariffs would not be introduced.

Products from those four Asian countries account for around 80% of cell and module imports, meaning new tariffs would add additional costs to more than three-quarters of the industry’s supply.

Gauging reactions: For all that, anti-tariff players welcomed the decision.

“If you want a robust American presence in solar and U.S. solar manufacturers to be successful, and if you want the U.S. solar industry to be successful, tariffs do really nothing for that,” John Helveston, assistant professor in George Washington University’s school of engineering, told Jeremy. “It just shoots yourself in the foot.”

Helveston said the tariff bridge effectively “eliminated the source of that legal battle,” referring to Commerce’s probe.

Biden’s explanations for declaring an emergency were not enough for domestic manufacturing interests, despite Biden also invoking the Defense Production Act on theirs and the broader solar industry’s behalf yesterday.

They have steadfastly criticized the administration for effectively intervening in the Commerce Department’s investigation, which may find new tariffs on imports are warranted.

Nick Iacovella, senior vice president of public affairs for manufacturing interest group Coalition for a Prosperous America, said Biden’s actions “makes it pretty clear that everyone in the administration thinks that China’s circumventing [existing tariffs].”

“Or else they wouldn’t have needed to do it,” he said. “It’s pretty clear that they thought the case had merit.”

Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Jeremy Beaman (@jeremywbeaman) and Breanne Deppisch (@breanne_dep). Email [email protected] or [email protected] for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.

GAS PRICES UP 61 CENTS SINCE LAST MONTH: U.S. gas prices have spiked by a national average of 61 cents per gallon in the past month, according to AAA—adding even more pain for drivers at the start of the summer driving season, which is expected to drive prices even higher.

In a blog post yesterday, AAA attributed the record-high fuel costs to a volatile market and high demand, which continues to far outpace supply. Areas in the Midwest saw some of the largest one-week gains, with prices seeing an uptick by roughly 45 cents per gallon in Michigan, 41 cents per gallon in Indiana, and 39 cents per gallon in Wisconsin, according to yesterday’s AAA report. Ohio, Nebraska, Kentucky, Colorado, Minnesota, and Texas all saw one-week increases of more than 30 cents per gallon.

AAA spokesman Andrew Gross said demand is likely to continue to rise in the near future. “People are still fueling up, despite these high prices,” Gross said. “At some point, drivers may change their daily driving habits or lifestyle due to these high prices, but we are not there yet.” Read more from Breanne here.

LESS THAN HALF OF AMERICANS SUPPORT NUCLEAR POWER, SURVEY FINDS: Less than half of Americans support nuclear power as a means of generating electricity, a new Reuters/Ipsos poll found—underscoring the deep public divide on the subject, even as the Biden administration has embraced nuclear power as a means of ramping up clean energy production.

According to the survey, conducted last week, just 45% of Americans said they support nuclear power, while 33% said they opposed it. Among those who said they oppose nuclear power, a wide 69% majority cited the risk of nuclear meltdowns, and 64% said they were concerned about nuclear waste generated by the facilities.

The survey comes after the Biden administration launched a $6 billion effort in April aimed at saving distressed U.S. nuclear power plants at risk of closure, making the largest-ever federal investment to help revitalize the nation’s fleet of nuclear reactors.

U.S. SOLAR INDUSTRY SEES WORST QUARTER SINCE 2020: The U.S. solar industry saw its lowest quarter of installations since the start of the COVID-19 pandemic, according to a new U.S. Solar Market Insight report from the Solar Energy Industries Association (SEIA) and Wood Mackenzie.

The report, published earlier today, said the U.S. solar market installed just 3.9 gigawatts of solar capacity in the first quarter of 2022—representing a 24% drop from the same period last year and the weakest earnings for solar in the past two years, which the report said was due to price increases and supply chain constraints, as well as trade policy disruptions in the second half of 2021.

Utility-scale solar saw the sharpest decline in Q1, with installation dropping to its lowest point since 2019, the report found. Meanwhile, the commercial market also saw a 28% decrease from the previous quarter.

In addition to price increases and supply chain woes, the report also took aim at the anti-circumvention investigation initiated by the Commerce Department, which it said further exacerbated supply chain challenges and “wrought havoc” on the industry as a whole.

In a press release announcing the report, SEIA president and CEO Abigail Ross Hopper praised Biden’s decision to use his emergency powers to boost U.S. solar production: “The solar industry is facing multiple challenges that are slowing America’s clean energy progress, but this week’s action from the Biden administration provides a jolt of certainty businesses need to keep projects moving and create jobs,” she said. “By acting decisively, this administration is breathing new life into the clean energy sector, while positioning the U.S. to be a global solar manufacturing leader.” Read the full report here.

CLIMATE GROUPS LAUNCH $100 MILLION VOTER MOBILIZATION EFFORT: Six climate advocacy groups have mobilized to launch a $100 million, first-of-its-kind effort aimed at turning out new voters ahead of this year’s midterm elections.

As CNN reports, the Climate Votes Project marks the first time climate groups have joined hands to help fund a midterm election effort. Their push will involve ad campaigns and in-person field efforts to help mobilize voters in battleground states, such as Arizona, Nevada, Pennsylvania, and Georgia.

Groups included are the Climate Power Action PAC, Climate Reality Action Fund, EDF Action Votes, League of Conservation Voters Victory Fund, NRDC Action Votes, and NextGen PAC. The push also comes as Democrats brace for a trying midterm election, which is projected to cost them their House and Senate majorities.

MEANWHILE, IN BONN: Climate negotiators from around the world gathered in Bonn, Germany, for the first day of a 10-day climate summit. At the talks, diplomats are hoping to take stock of their progress in delivering on goals set under the 2015 Paris climate accord, and on agenda-setting ahead of this fall’s UN climate talks in Egypt.

One of the main priorities for envoys in Bonn is to reach consensus on a financial aid package to provide funding for poor countries struggling to cope with the impacts of climate change.

Speaking at the outset of yesterday’s meeting, UN climate chief Patricia Espinosa urged delegates to prioritize the passage of what she described as a “balanced package.” “We must move these negotiations along more quickly,” she said. “The world expects it.”

Delegates from the group of 46 Least Developed Countries, meanwhile, demanded that major polluters such as China and the U.S. move to curb their emissions and pay for the damage they have already caused through decades of greenhouse gas emissions:

“Countries with much greater responsibility and capabilities than ours must close the funding gap so that when the impacts of climate change hit — when houses and hospitals are washed away, when crops are destroyed, when islands sink and when whole communities are displaced — the costs don’t land on the already vulnerable households,” said the group’s leader and Senegal delegate, Madeleine Diouf Sarr.

BREAKING DOWN A BUSY WEEK OF ENERGY NEWS: On this week’s “Plugged In” podcast, Breanne joined former FERC chairman and host Neil Chatterjee to discuss a flurry of recent energy news, including the EU’s new Russian oil embargo, what impact the new restrictions might have on the global oil market, and the Biden administration’s push for OPEC+ nations to increase its crude production amid Russia’s ongoing war in Ukraine.

The two also discussed California’s new summer water restrictions, severe and worsening drought conditions in many parts of the U.S., and the threat that these extreme weather conditions could pose to the power grid this summer. Listen to the full episode here.

NATURAL GAS FUTURES TRADING TRIPLE: Natural gas prices continue to rise as summer approaches, with prompt month futures trading well into $9 per MMBtu this morning. Nymex futures opened at $9.36, three-fold higher than a year ago.

Analysts have pointed to a mix of factors, including lower storage levels, higher residential and commercial demand, and higher demand for feedgas to support liquefied natural gas exports.

Speaking of LNG: U.S. LNG exports were 18% higher during the first third of this year compared to 2021’s average, according to the Energy Information Administration.

Put another way, during the first four months of the year, the U.S. exported 74% of its LNG to Europe, as compared with 2021’s annual average of 34%.

The Rundown

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Calendar

WEDNESDAY | JUNE 8

10:00 a.m. 406 Dirksen The Senate Environment and Public Works Committee will consider the nominations of Annie Caputo and Bradley R. Crowell to be members of the Nuclear Regulatory Commission.

10:00 a.m. 2318 Rayburn The House Science, Space, and Technology Committee will hold a hearing on detecting and quantifying methane emissions from the oil and gas sector.