What does a Trump presidency mean for the global energy market? The reality is that we simply don’t know. Nevertheless, it doesn’t look good. And on any conventional assessment, it is a disaster on many levels – particularly for the efforts to address climate change and for the clean energy industry in the US.
Trump is convinced that climate change is a hoax, most likely propagated by the Chinese. He has mocked the idea of a carbon price, vowed to pull the US out of the Paris climate deal and pull down clean energy policies, and promised to “save” the coal industry and allow a free-for-all for oil and gas drillers.
But as experts such as Alden Meyer, from the Union of Concerned Scientists, point out, Trump can’t change physics. Climate change is still happening. It was hard enough to deal with that with a supportive US on board. Without it, the rest of the world will need to redouble its efforts.
The energy transition to cheaper and cleaner energy is happening, regardless. Trump can slow down the pace in the US, but it will accelerate elsewhere, leaving the US at a significant disadvantage; although it should be noted that US renewable investments are driven to a large extent by state-based targets.
HSBC has noted that Trump’s policies put at risk the decarbonisation and clean energy uptake seen during President Obama’s time in office, with potential to slow both the US energy system transition and domestic measures to mitigate climate change.
But at the same time Trump has no control over the solar market, which is heading towards 2c/kWh, and he has no influence over battery storage, which is heading to below 400/kWh and to its major inflexion point.
This is a crucial point. Wind and solar and their enabling technologies are getting cheaper with or without the Americans, and the fossil industry will be disrupted.
So the incumbent energy oligarchs have no reason for complacency or satisfaction from this result. Brexit and Trump show the appetite for disruption, and falling technology costs deliver the means for it on an unprecedented scale in the energy industry – the sector which has wielded enormous political and economic power in the last few decades.
Image Via: Gage Skidmore via Flickr Commons
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