1 00:00:02,520 --> 00:00:09,720 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. I'm Caroline Hebkea, and 2 00:00:09,760 --> 00:00:13,000 Speaker 1: this is his Why, where we take one news story 3 00:00:13,200 --> 00:00:15,800 Speaker 1: and explain it in just a few minutes with our 4 00:00:15,880 --> 00:00:23,279 Speaker 1: experts here at Bloomberg. They're ugly, they don't work, they 5 00:00:23,480 --> 00:00:26,360 Speaker 1: kill your birds, they bid for the environment. So I'm 6 00:00:26,400 --> 00:00:29,760 Speaker 1: trying to have people learn about wind real fast. 7 00:00:30,080 --> 00:00:33,680 Speaker 2: Some countries are still trying, and they're destroying themselves. 8 00:00:34,159 --> 00:00:38,960 Speaker 1: President Trump is crystal clear about his dislike for wind farms. 9 00:00:39,200 --> 00:00:43,040 Speaker 1: He says they're too expensive and inefficient, that they spoil 10 00:00:43,120 --> 00:00:47,760 Speaker 1: the view, they cause cancer, and even drive whales crazy. 11 00:00:48,400 --> 00:00:53,479 Speaker 1: But now President Trump's attacks on renewable power are fundamentally 12 00:00:53,560 --> 00:00:58,680 Speaker 1: reshaping the US energy landscape, jeopardizing thousands of jobs and 13 00:00:58,760 --> 00:01:02,840 Speaker 1: billions of dollars in investment at home and abroad. His 14 00:01:02,960 --> 00:01:07,480 Speaker 1: administration is stepping up its efforts to reverse President Biden's 15 00:01:07,640 --> 00:01:12,880 Speaker 1: environmental agenda, revoking permits for wind farms and solar projects 16 00:01:13,080 --> 00:01:19,040 Speaker 1: and ending some all together. With me in the studio 17 00:01:19,360 --> 00:01:23,680 Speaker 1: is Rachel Morrison, who leads Bloomberg's Power, gas, and renewables 18 00:01:23,720 --> 00:01:28,680 Speaker 1: coverage in Europe. Why does Trump loathe renewables and what 19 00:01:28,760 --> 00:01:31,440 Speaker 1: he sometimes calls windmills. 20 00:01:31,640 --> 00:01:35,160 Speaker 2: In particular, it is, as you mentioned, for a variety 21 00:01:35,240 --> 00:01:38,600 Speaker 2: of reasons, from what we sort of thought at the beginning, 22 00:01:39,080 --> 00:01:42,440 Speaker 2: which was some of his friends who had homes off 23 00:01:42,480 --> 00:01:44,880 Speaker 2: the coast of New England didn't like the look of 24 00:01:44,920 --> 00:01:48,400 Speaker 2: the turbines spoiling their view. And Trump also has a 25 00:01:48,400 --> 00:01:51,640 Speaker 2: golf course in Scotland and he doesn't like to look 26 00:01:51,680 --> 00:01:53,840 Speaker 2: out at wind farms when he's playing golf there. So 27 00:01:53,880 --> 00:01:56,040 Speaker 2: there's that part of it. And then we've heard all 28 00:01:56,120 --> 00:02:00,040 Speaker 2: kinds of reasons from him, from cancer to impact it 29 00:02:00,120 --> 00:02:03,360 Speaker 2: has on whales. None of those things have any scientific proof. 30 00:02:03,840 --> 00:02:07,160 Speaker 2: But what we are seeing is for whatever reason he 31 00:02:07,280 --> 00:02:11,200 Speaker 2: dislikes wind farms, it is showing up in real policy 32 00:02:11,720 --> 00:02:14,640 Speaker 2: and stopping things being built. 33 00:02:15,080 --> 00:02:19,080 Speaker 1: How is the US administration ramping up? Then it's anti 34 00:02:19,240 --> 00:02:21,000 Speaker 1: renewables agenda. 35 00:02:21,960 --> 00:02:25,200 Speaker 2: In many ways, we're seeing it in how policies are made. 36 00:02:25,320 --> 00:02:30,120 Speaker 2: At the beginning of this administration, Trump's second he said 37 00:02:30,160 --> 00:02:33,480 Speaker 2: that they wouldn't be taking into account climate change and 38 00:02:33,600 --> 00:02:37,280 Speaker 2: the cost of climate change into any policies. And what 39 00:02:37,280 --> 00:02:42,200 Speaker 2: we're seeing is him revoking or his minister's revoking permits. 40 00:02:42,520 --> 00:02:46,560 Speaker 2: So sometimes those are for projects that haven't been started 41 00:02:46,600 --> 00:02:49,560 Speaker 2: and are still in development, and that's very disruptive and 42 00:02:49,720 --> 00:02:52,680 Speaker 2: bad for investment. But we have seen examples, and this 43 00:02:52,840 --> 00:02:55,560 Speaker 2: is more serious, where our wind farm is already being 44 00:02:55,600 --> 00:02:58,679 Speaker 2: built and one that's almost eighty percent finished that has 45 00:02:58,720 --> 00:03:02,480 Speaker 2: had a stop work issued to it. So it ranges, 46 00:03:02,560 --> 00:03:06,440 Speaker 2: but it's really taking away the permission to build these 47 00:03:06,760 --> 00:03:09,000 Speaker 2: projects that he has been focusing on. 48 00:03:09,400 --> 00:03:13,040 Speaker 1: How much is this then about denying climate change? 49 00:03:13,400 --> 00:03:18,080 Speaker 2: Trump himself sort of hasn't clearly denied climate change, although 50 00:03:18,200 --> 00:03:21,000 Speaker 2: it's true that it's not just wind he dislikes, it's 51 00:03:21,000 --> 00:03:23,720 Speaker 2: also solar. He sort of seems to be taking in 52 00:03:23,880 --> 00:03:27,400 Speaker 2: to account lots of different viewpoints. You know, with solar, 53 00:03:27,680 --> 00:03:30,360 Speaker 2: he doesn't like it because of farmers with wind, he 54 00:03:30,400 --> 00:03:33,639 Speaker 2: doesn't like the look of them. So some of it 55 00:03:33,680 --> 00:03:36,560 Speaker 2: is to do with his own personal view, but we 56 00:03:36,640 --> 00:03:40,000 Speaker 2: have seen across the administration a sort of attempt to 57 00:03:40,200 --> 00:03:42,880 Speaker 2: undo some of the climate policies that had been put 58 00:03:42,920 --> 00:03:45,640 Speaker 2: in place. So, you know, a lot of that comes 59 00:03:45,720 --> 00:03:48,240 Speaker 2: down to his views on drill, baby drill. You know 60 00:03:48,280 --> 00:03:52,280 Speaker 2: that often cited phrase that he would prefer America to 61 00:03:52,360 --> 00:03:55,920 Speaker 2: focus on oil and gas, which they have a lot of, 62 00:03:56,120 --> 00:03:59,200 Speaker 2: and the price is low rather than building renewables. 63 00:03:59,560 --> 00:04:02,840 Speaker 1: What's his the impact on the US economy then of 64 00:04:02,880 --> 00:04:07,480 Speaker 1: these decisions? How much does it weaken the US economy? Yeah, 65 00:04:07,480 --> 00:04:09,960 Speaker 1: it could have a really serious impact. And that's one 66 00:04:09,960 --> 00:04:13,080 Speaker 1: of the things I think we find most surprising when 67 00:04:13,120 --> 00:04:16,159 Speaker 1: talking about this story is that it's not just the 68 00:04:16,279 --> 00:04:19,640 Speaker 1: jobs and the companies that have set up US businesses 69 00:04:19,680 --> 00:04:23,960 Speaker 1: to develop these projects. It's also the investment climate. Because 70 00:04:24,000 --> 00:04:28,239 Speaker 1: if you have a government that is changing policy after 71 00:04:28,360 --> 00:04:31,440 Speaker 1: investment decisions have been made, that has a huge impact 72 00:04:31,520 --> 00:04:34,560 Speaker 1: for the cost of capital and the risk involved with 73 00:04:34,600 --> 00:04:38,799 Speaker 1: those projects. And we are hearing people talking about whether 74 00:04:38,839 --> 00:04:41,680 Speaker 1: that can be extended to non renewables projects too. Just 75 00:04:41,960 --> 00:04:45,520 Speaker 1: it's expensive to build in America because political risk is high, 76 00:04:45,560 --> 00:04:48,360 Speaker 1: and that is something that Donald Trump will not want 77 00:04:48,520 --> 00:04:51,719 Speaker 1: to see, but it is definitely a factor. What does 78 00:04:51,760 --> 00:04:55,240 Speaker 1: this mean for the global economy and the international businesses 79 00:04:55,760 --> 00:04:59,040 Speaker 1: like AUSTED and others who have made these decisions. 80 00:04:59,600 --> 00:05:03,120 Speaker 2: Yeah, particularly for the Europeans who have gone to the 81 00:05:03,240 --> 00:05:07,280 Speaker 2: US to try to expand their offshore wind businesses. So 82 00:05:07,320 --> 00:05:11,839 Speaker 2: we have ORSTED, we have rwe we have ibadrola. There's 83 00:05:11,839 --> 00:05:14,280 Speaker 2: a big impact because this was a way to grow 84 00:05:14,360 --> 00:05:18,480 Speaker 2: their businesses and they're now unable to do that. And 85 00:05:18,600 --> 00:05:22,320 Speaker 2: we have Equinor as well, who had a project that 86 00:05:22,560 --> 00:05:26,200 Speaker 2: was restarted after being stopped. But there's a cost to 87 00:05:26,279 --> 00:05:29,600 Speaker 2: it because all of these companies have got supply chains, 88 00:05:29,680 --> 00:05:31,840 Speaker 2: have got people lined up to do all the work, 89 00:05:32,000 --> 00:05:35,600 Speaker 2: so you know, they have to pay fines and things 90 00:05:35,640 --> 00:05:39,960 Speaker 2: if they don't complete on contracts. So it's not no 91 00:05:40,240 --> 00:05:43,000 Speaker 2: cost to even stop or delay a project. It has 92 00:05:43,000 --> 00:05:46,560 Speaker 2: a huge knock on effect. And these companies, you know, 93 00:05:46,560 --> 00:05:50,080 Speaker 2: when they're coming and reporting earnings, Astead has been hugely 94 00:05:50,160 --> 00:05:53,200 Speaker 2: hit by what's gone on in the US and they're 95 00:05:53,200 --> 00:05:55,640 Speaker 2: having to do an enormous cattle raise to try to 96 00:05:56,200 --> 00:06:00,760 Speaker 2: stabilize the business because they had gone big in US 97 00:06:00,800 --> 00:06:03,000 Speaker 2: offshore wind and a lot of those projects have either 98 00:06:03,000 --> 00:06:05,640 Speaker 2: been canceled or they still have two that have a 99 00:06:05,680 --> 00:06:06,800 Speaker 2: big question mark over them. 100 00:06:07,240 --> 00:06:10,320 Speaker 1: On the other side of this story, building wind power 101 00:06:10,480 --> 00:06:16,159 Speaker 1: does have some disadvantages. Have some investments in renewables been hotter. 102 00:06:16,839 --> 00:06:21,559 Speaker 2: Yes, we have heard that argument, especially from US Energy 103 00:06:21,560 --> 00:06:25,960 Speaker 2: Secretory Chris Right, that it's a government funded business, you know, 104 00:06:26,000 --> 00:06:31,000 Speaker 2: building wind farms, and yes, in throughout Europe, renewables do 105 00:06:31,360 --> 00:06:36,280 Speaker 2: receive government subsidies. But the cost of the technology has 106 00:06:36,320 --> 00:06:39,880 Speaker 2: come down hugely over time. And what sort of happened 107 00:06:40,160 --> 00:06:42,800 Speaker 2: is we've reached almost a bottom a floor for that 108 00:06:42,839 --> 00:06:45,440 Speaker 2: when it's come to offshore wind. So the cost has 109 00:06:45,440 --> 00:06:48,240 Speaker 2: come down enormously to the point where it is competitive. 110 00:06:48,320 --> 00:06:50,960 Speaker 2: And now those costs a rising slightly, and that's for 111 00:06:51,040 --> 00:06:54,880 Speaker 2: many reasons, supply chain costs, inflation, you know, just a 112 00:06:55,000 --> 00:06:59,360 Speaker 2: kind of it's more expensive to borrow money to build 113 00:06:59,360 --> 00:07:02,839 Speaker 2: these product so the cost is coming up slightly. But 114 00:07:03,800 --> 00:07:07,560 Speaker 2: you know, it's not that they're not profitable or they 115 00:07:07,600 --> 00:07:11,200 Speaker 2: only can survive with government support, but because they needed 116 00:07:11,240 --> 00:07:14,080 Speaker 2: to get up and running. In the US, the industry 117 00:07:14,120 --> 00:07:18,000 Speaker 2: is nonexistent. It does need some subsidy, but the idea 118 00:07:18,120 --> 00:07:20,000 Speaker 2: is that later on it will stand on its own 119 00:07:20,080 --> 00:07:21,200 Speaker 2: and give you free power. 120 00:07:21,640 --> 00:07:25,480 Speaker 1: Well, how much then does the Trump campaign end US 121 00:07:25,520 --> 00:07:30,280 Speaker 1: support for clean energy, in particular wind power? Could it 122 00:07:30,320 --> 00:07:31,520 Speaker 1: be reverse in future? 123 00:07:32,480 --> 00:07:35,280 Speaker 2: I think at the moment we have all kinds of 124 00:07:35,320 --> 00:07:38,760 Speaker 2: a sort of a range of expectations from people from 125 00:07:39,320 --> 00:07:44,480 Speaker 2: Trump could extend what he's doing to permits from just 126 00:07:44,600 --> 00:07:48,040 Speaker 2: offshore to onshore as well, and then possibly to solar. 127 00:07:48,160 --> 00:07:52,520 Speaker 2: So it could get worse in some people's mind, and 128 00:07:52,560 --> 00:07:54,760 Speaker 2: then on the other hand, people sort of think, well, 129 00:07:54,760 --> 00:07:57,400 Speaker 2: he could be done. I think most of the reporting 130 00:07:57,760 --> 00:07:59,920 Speaker 2: that we've done, and also the New York Times has done, 131 00:08:00,160 --> 00:08:03,920 Speaker 2: shows that there is a significant push within the administration 132 00:08:04,080 --> 00:08:09,760 Speaker 2: to stop these offhra wind projects being built. And I mean, 133 00:08:09,800 --> 00:08:12,920 Speaker 2: why would you come back if you think that policy 134 00:08:12,960 --> 00:08:15,760 Speaker 2: is going to change every four years. That's not what 135 00:08:15,840 --> 00:08:19,280 Speaker 2: investors like as a stable environment to invest in. So 136 00:08:19,720 --> 00:08:22,720 Speaker 2: I think it could be permanently damaging if it gets 137 00:08:22,720 --> 00:08:25,800 Speaker 2: to the point where projects are permanently halted. 138 00:08:26,360 --> 00:08:29,440 Speaker 1: Rachel, thank you for speaking to me. Rachel Morrison, who 139 00:08:29,520 --> 00:08:33,760 Speaker 1: leads Bloomberg's power, gas, and renewables coverage in Europe. Thank 140 00:08:33,800 --> 00:08:36,680 Speaker 1: you For more explanations like this from our team of 141 00:08:36,760 --> 00:08:39,680 Speaker 1: three thousand journalists and analysts around the world. Go to 142 00:08:39,720 --> 00:08:45,160 Speaker 1: Bloomberg dot com slash explain us. I'm Caroline hepget this 143 00:08:45,520 --> 00:08:49,000 Speaker 1: is here's why. We'll be back next week with more. 144 00:08:49,160 --> 00:08:50,000 Speaker 1: Thanks for listening.