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Speaker 1: This is Dana Perkins, and today we're bringing you a

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Speaker 1: bonus episode that we think you might like from one

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Speaker 1: of our other Bloomberg podcasts, Trumpanomics. It's hosted by Bloomberg's

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Speaker 1: head of Government and Economics, Stephanie Flanders. So earlier this month,

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Speaker 1: the US Congress gave the green light to Donald Trump's

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Speaker 1: One Big Beautiful Bill, setting in motion major shifts in

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Speaker 1: the nation's approach to climate policy. The implications could be

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Speaker 1: far reaching, with the bill delivering on Republican goals to

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Speaker 1: pair back major usd carbonization programs and instead promote fossil

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Speaker 1: fuels and dispatchable power. Joining Stephanie to discuss the potential

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Speaker 1: impact of the bill were Bloomberg Lobbying and Influence reporter

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Speaker 1: Emily Brinbaum and bn EF's own Ethan Zindler, head of

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Speaker 1: Country and Policy Research. The discussion was fascinating, and given

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Speaker 1: Ethan's prior experience working for the US Treasury Department, where

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Speaker 1: he worked on some of the Biden administration's IRA tax

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Speaker 1: credit policies, there are few better places to understand the

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Speaker 1: true impact of that One Big Beautiful Bill. Let's get

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Speaker 1: to listening to their show, Bloomberg audio studios, podcasts, radio news.

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Speaker 2: This is not the death of the US renewable energy

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Speaker 2: industry in the United States, but it is a major setback.

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Speaker 3: I'm Sephanie Flanders, head of Government and Economics at Bloomberg.

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Speaker 3: Welcome to Trumpanomics, the podcast that looks at the economic

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Speaker 3: world of Donald Trump. Now he's already shaped the global economy,

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Speaker 3: and what on earth is going to happen next? This

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Speaker 3: week we're talking about the big beautiful assault on renewable energy.

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Speaker 3: Will the Republican megabill pass last week bring on a

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Speaker 3: new American energy crisis? What could be the impact on

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Speaker 3: electricity bills, the broader economy, and America's leadership in the

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Speaker 3: race for artificial intelligence. We're recording this on Tuesday, the

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Speaker 3: eighth of July. And of all the elements of the

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Speaker 3: one Big Beautiful Bill, as Donald Trump called it, that

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Speaker 3: he signed going into the July fourth holiday, one I

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Speaker 3: find particularly hard to get my head round is the

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Speaker 3: decision to get rid of tax credits for clean energy.

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Speaker 3: As a result of that, wind and solar projects will

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Speaker 3: cost more and more likely there will be a lot

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Speaker 3: fewer built. In fact, in an analysis this week, a

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Speaker 3: climate policy think tank called Energy Innovation forecast that the

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Speaker 3: bill would put an end to three hundred gigawatts of

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Speaker 3: wind and solar projects that would have otherwise come online

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Speaker 3: in the next fifteen years. That's the equivalent of about

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Speaker 3: three hundred nuclear reactors. Now, obviously that set back the

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Speaker 3: fight against climate change and the decarbonization of the US economy.

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Speaker 3: And that may not be much of a worry for

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Speaker 3: the supporters of the big bill, but there could be

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Speaker 3: more concern about another very likely consequence, higher electricity prices.

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Speaker 3: That matters for voters facing rising utility bills, but it

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Speaker 3: also matters for tech firms chasing the next breakthroughs in AARI.

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Speaker 3: The country that reigns supremi in AI will rule the world.

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Speaker 3: Everyone seems to think that these days, including Donald Trump.

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Speaker 3: In fact, you might remember on the day after his

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Speaker 3: inauguration he announced the creation of Stargate, a project to

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Speaker 3: expand AI infrastructure in the US.

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Speaker 4: But to announce the largest AI infrastructure project by far

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Speaker 4: in history. And it's all taking place right here in America.

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Speaker 4: As you know, there's great competition for AI and.

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Speaker 3: But projects like Stargate need electricity, lots of it, And

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Speaker 3: in fact, that's part of the reason electricity demand in

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Speaker 3: the US is rising faster now than it has at

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Speaker 3: any time in the last twenty years. The tax credits

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Speaker 3: in the Inflation Reduction Act under President Biden helped the

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Speaker 3: US keep up with that rising demand in theory by

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Speaker 3: making clean power sources cheaper. Investments in wind, solar, and

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Speaker 3: battery storage had spiked in the years after the IRA

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Speaker 3: was passed, But now the Big Bill has changed all

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Speaker 3: that and a lot of people including me, scratching their

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Speaker 3: heads wondering what plan is now. And this week I'm

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Speaker 3: delighted to say I'm in the Washington Studio with two

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Speaker 3: guests who have a good perspective on this topic and

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Speaker 3: can help me think through the consequences for the US economy.

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Speaker 3: First up, Ethan Zinler, the head of Country and Policy

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Speaker 3: Research at Bloomberg NEF. That's the part of Bloomberg Research

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Speaker 3: that's focused on the energy transition. And we should say

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Speaker 3: that before joining US, Ethan served as Climate Counselor to

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Speaker 3: the US Treasury Secretary Janet Yellen from July twenty twenty

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Speaker 3: three to January twenty five, so he was across a

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Speaker 3: lot of policy efforts then, including helping to write and

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Speaker 3: implement the Inflation Reduction Act.

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Speaker 2: Welcome Ethan, thanks for having.

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Speaker 3: Me and also with us Emily Bernbaut, who's a Bloomberg

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Speaker 3: reporter here in DC who covers corporate lobbying and influence.

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Speaker 3: Thank you so much for being on Trumpnomics. Emily, Thank you. So.

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Speaker 3: People will have heard quite a lot about that bill,

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Speaker 3: but it's probably useful to just take stock of how

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Speaker 3: that turn the tables for the renewable industry. What are

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Speaker 3: the specific measures that are going to be painful for

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Speaker 3: that part of the US energy industry.

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Speaker 5: There was a lot of last minute wrangling over the

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Speaker 5: details of what this bill will do to the clean

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Speaker 5: energy industry. The top line is that it's very bad.

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Speaker 5: It's not as bad as it could have been. What

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Speaker 5: ended up in the bill was pretty aggressive timelines for

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Speaker 5: phasing out tax credits. But elements of the bill would

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Speaker 5: encourage companies to begin construction over the next year, and

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Speaker 5: if they're able to do so, it's likelier that they'll

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Speaker 5: be able to get some of these important tax credits.

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Speaker 5: But overall, they're going to have to begin construction very quickly,

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Speaker 5: and these tax credits are going away on a more

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Speaker 5: aggressive timeline than had initially been anticipated.

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Speaker 3: Yeah, and that was always interesting because when it went

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Speaker 3: from the House to the Senate, there was some expectation

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Speaker 3: that the Senate would want to extend the timeframe a

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Speaker 3: little bit. The investments that draw have been announced, give

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Speaker 3: them a bit more time to get up and running.

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Speaker 3: But if anything, the bills seemed to get worse.

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Speaker 5: Yes, and at the last minute there was something that

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Speaker 5: would have dealt a huge blow to the industry, which

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Speaker 5: was this excise tax. There was basically panic in the

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Speaker 5: industry and among moderate Republicans who said this excise tax

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Speaker 5: would so dramatically increase costs for solar and wind projects,

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Speaker 5: it would effectively make it untenable for a lot of

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Speaker 5: these projects to move forward or begin construction. So right

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Speaker 5: before the Senate passed it, they removed the excise tax,

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Speaker 5: which is a huge relief, but they still are dealing

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Speaker 5: with pretty aggressive phase outs.

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Speaker 3: Ethan, you were saying just before we started that even

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Speaker 3: though parts of the renewables industry was kind of breathing

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Speaker 3: asigh of relief, at least dodged that particular bullet not

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Speaker 3: having this extra tax that the administration has already sort

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Speaker 3: of vindicated that it's not done with the renewable industry.

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Speaker 3: Yet what happened earlier this week.

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Speaker 2: Yeah, things have kind of gone from bad to worse,

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Speaker 2: even within the last less than twenty four hours. Basically,

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Speaker 2: there's been some real questions about whether projects could qualify

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Speaker 2: so long as they were quote unquote under construction, and

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Speaker 2: the irs historically is to find under construction fairly liberally.

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Speaker 2: And yesterday the White House issue to executive order basically

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Speaker 2: saying that they are ordering the Treasury Department within the

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Speaker 2: next forty five days to rewrite that rule and if

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Speaker 2: they do that in such a way they can make

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Speaker 2: it very challenging for projects to qualify. It is not

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Speaker 2: even beyond the realm of the possible that they would

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Speaker 2: write something that is essentially retroactive and effectively make it

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Speaker 2: much more challenging for projects to actually be able to

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Speaker 2: qualify for the credits. So from our perspective at Bloomberg

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Speaker 2: and EF, we're trying to go back and sharpen our

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Speaker 2: kencils and try and think about how much stuff is

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Speaker 2: going to get belt. But I think the one thing

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Speaker 2: that's pretty clear as of this morning is that many

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Speaker 2: who are in the wind and solar and storage industry

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Speaker 2: are probably scrambling to get as much stuff as they

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Speaker 2: can essentially under construction at this very moment, while they

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Speaker 2: are concurrently probably lobbying the Treasury Department about what this

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Speaker 2: new regulation is going to look like.

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Speaker 3: I mean, I'm going to come back to you on

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Speaker 3: some of the dynamics on the hill, but Ethan, let's

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Speaker 3: just step back, and I know that's what bloomoginny F

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Speaker 3: likes doing. They tend to do the twenty five year

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Speaker 3: horizons considered to be quite short term. But if you

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Speaker 3: do take that kind of longer term, you know what

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Speaker 3: has been happening to energy demand and electricity demand within

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Speaker 3: that in recent years and what was you know, until

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Speaker 3: this bill, what was that basic plan for meeting it?

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Speaker 2: Yeah, So the United States, like other wealthy developed countries,

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Speaker 2: has been able to grow its economy without growing demand

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Speaker 2: for electricity really for twenty years. Essentially, we've had flat

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Speaker 2: demand overall, large because of energy efficiency improvements and new

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Speaker 2: technologies and the desire to save costs. The last couple

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Speaker 2: of years that started to change, and we think that's

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Speaker 2: going to continue to change going forward. The number one

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Speaker 2: driver in the short run has been AI and the

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Speaker 2: demand from new data centers. We also think electric vehicles,

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Speaker 2: as you look further out, are going to start to

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Speaker 2: play a much bigger role as well. In the US,

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Speaker 2: we think we're going to see demand for electricity double

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Speaker 2: from about forty one hundred tarawad hours at the moment

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Speaker 2: up over six thousand by the time you get to

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Speaker 2: twenty fifty overall, and by twenty thirty five, we think

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Speaker 2: that about eight percent of capacity in the United States

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Speaker 2: is going to go specifically to powering data centers, which

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Speaker 2: is a really considerable portion overall. One other quick just

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Speaker 2: note in terms of trends, is that really over the

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Speaker 2: last ten years or fifteen years or so, the US

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Speaker 2: has really been rapidly decarbonizing our power generation sector. We

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Speaker 2: went from about half our power coming from coal to

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Speaker 2: well under twenty percent as the last year, could be

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Speaker 2: even under fifteen percent this year depending on conditions. And

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Speaker 2: meanwhile renewables have grown from almost nothing to about twenty

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Speaker 2: percent of generation. Nuclear is about twenty percent, so worried

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Speaker 2: about forty percent zero carbon here, and the natural gas

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Speaker 2: is a huge part of the story, which is a

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Speaker 2: lot cleaner than coal overall. So the general trend has

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Speaker 2: been towards cleaner sources of energy going forward. And if

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Speaker 2: you look at what's gotten built in the last several

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Speaker 2: years and what would get built in the next several years,

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Speaker 2: in terms of purely cost, it's renewables. The vast majority

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Speaker 2: of new stuff that's due to come online is renewables.

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Speaker 2: And so that is why it is so questionable that

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Speaker 2: you would go out of your way to essentially raise

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Speaker 2: the cost of those technologies, which is effectively what Congress

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Speaker 2: has now done.

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Speaker 3: Those of us who kind of looked on the outside

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Speaker 3: and seen the US go from being a net consumer

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Speaker 3: of energy or oil, I should say to an exporter,

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Speaker 3: have been very familiar with a rather different story, which

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Speaker 3: is America had this fracking revolution which was not environmentally friendly,

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Speaker 3: but did bring an enormous amount of gas online, which

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Speaker 3: has brought down the price of energy for US consumers.

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Speaker 3: So I guess the story that you might tell against

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Speaker 3: your story at least be sort of well, hang on

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Speaker 3: a minute, it's fracking that has made this a kind

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Speaker 3: of golden era for US energy prices, and the renewables

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Speaker 3: is not completely reliable and is more is a sort

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Speaker 3: of side show to that basic story.

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Speaker 2: So yeah, really good points. I mean certainly, we have

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Speaker 2: the lowest price natural gas in the world in terms

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Speaker 2: of production, and that has allowed a lot of manufacturing

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Speaker 2: to be very competitive in the United States. I would

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Speaker 2: note though, that first of all, that renewables plus storage

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Speaker 2: gets you maybe not to twenty four hours of a generation,

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Speaker 2: but can get you enough production of electricity into the

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Speaker 2: sort of key hours of the evening. And we're starting

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Speaker 2: to see solar plus storage be very cost competitive in

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Speaker 2: many markets around the world, not all markets in the

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Speaker 2: United States, but a bunch of markets. But then just

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Speaker 2: purely speaking practically in the United States in terms of

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Speaker 2: what we're going to build over the next five years,

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Speaker 2: You're absolutely right that gas is cheap, and gas is

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Speaker 2: cost competitive in a number of markets in the United States.

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Speaker 2: The problem is you just cannot get your hands on

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Speaker 2: a combined cycle gas turbine at the moment for a

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Speaker 2: number of years, anywhere from three to seven depending on

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Speaker 2: who you asked. So in terms of what our next

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Speaker 2: mega out of capacity is going to be, it basically

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Speaker 2: has to be renewables because there isn't really any other sources,

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Speaker 2: and if we have rising demand from AI, that means

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Speaker 2: it's going to probably come from renewables. And again, if

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Speaker 2: you take away essentially what has been a long standing

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Speaker 2: tax credit and subsidy to the clean energy industry that

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Speaker 2: is effectively socialized a discounted electricity production price in the

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Speaker 2: United States, you're just simply going to concentrate it on

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Speaker 2: certain markets. So the next place where you're going to

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Speaker 2: build a wind or solar project, potentially you're going to

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Speaker 2: have to sign a higher price contract in order for

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Speaker 2: the developer to make the return that they need without

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Speaker 2: the tax credit.

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Speaker 3: But if they're the only short term viable source of

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Speaker 3: additional energy, then it surely must be cost effective to build.

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Speaker 2: I mean, here's the question, and I think we're going

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Speaker 2: to find this out over the next couple of years,

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Speaker 2: is what's the breaking point for consumers? So, yes, you

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Speaker 2: can pass on some form of higher electricity prices. But

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Speaker 2: if you're a developer of a large scale data center,

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Speaker 2: you're not necessarily entirely wedded to the United States. Just

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Speaker 2: because the most AI has been built not that far

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Speaker 2: from here, maybe thirty miles from here, just outside of Washington,

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Speaker 2: doesn't mean that every next AI data center has to

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Speaker 2: be here. To some large degree, AI is some the

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Speaker 2: servers not all. To be clear, there's different types of

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Speaker 2: servers and that's not my area of expertise, but some

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Speaker 2: can really be anywhere in the world, and so they

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Speaker 2: will go where the price of electricity is most affordable

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Speaker 2: and reliable, and there are other options. Brazil is about

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Speaker 2: seventy eighty percent hydropower, low cost. They've been trying very

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Speaker 2: much to market Brazil as an AI place. Gulf States

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Speaker 2: have enormous amounts of sun, very cheap solar, They don't

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Speaker 2: put big tariffs on solar equipment like we do, can

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Speaker 2: build batteries to go along with it. They are certainly

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Speaker 2: trying to market themselves as hubs for AI as well.

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Speaker 2: So no foregone conclusion that the United States will be

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Speaker 2: the one and only place where we build all this

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Speaker 2: new capacity.

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Speaker 3: But as far as you're concerned, the only way that

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Speaker 3: this energy that we were expecting to come online, or

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Speaker 3: electricity that we were expecting to come online in the

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Speaker 3: US to meet this demand will actually come online is

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Speaker 3: through higher prices.

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Speaker 2: I mean, it seems inevitable. And I think one of

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Speaker 2: the questions we're just trying to parse out, given the

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Speaker 2: incredible complexity of what Congress has just done, is how

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Speaker 2: many projects could still qualify for the tax credit if

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Speaker 2: they get under construction basically yesterday, and how many of

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Speaker 2: them will not and those that don't, obviously they are

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Speaker 2: going to have to figure out some way to get

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Speaker 2: compensated correctly so that they can earn the return that

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Speaker 2: they want. The best guess at the moment is that

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Speaker 2: if you get under construction sometime in this calendar year,

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Speaker 2: you'll probably be okay. But the White House just created

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Speaker 2: additional uncertainty with this executive order.

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Speaker 3: One estimate I saw is that the future clean energy

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Speaker 3: products that don't have these tax credits will fifty percent

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Speaker 3: more to get built. Do you think that's in the

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Speaker 3: right ball part?

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Speaker 2: That feels a little on the high side of me,

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Speaker 2: But we need to do the analysis ourselves. I think historically,

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Speaker 2: if you look around the world, the history of clean

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Speaker 2: energy is you have a number of countries that have

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Speaker 2: put in place very generous supports in the form of

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Speaker 2: feed in tariffs like we've seen in countries in Europe

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Speaker 2: and elsewhere, and when they disappear, it's terrible news for

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Speaker 2: the industry. But we also find that the industry is

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Speaker 2: incredibly innovative about finding ways to reduce costs. The US

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Speaker 2: is really not a low cost market when it comes

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Speaker 2: to putting solar on people's views in particular, but also

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Speaker 2: large scale projects, So there's definitely some room for cost reduction,

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Speaker 2: I think for the industry overall. But there's no question

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Speaker 2: this is going to boost costs. In the case of

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Speaker 2: a typical solar project, the tax credit is thirty percent

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Speaker 2: of capex, So a billion dollar project, three hundred million

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Speaker 2: right off the top was basically disappearing because of tax credits.

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Speaker 2: That has to be dealt with somehow.

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Speaker 3: And I've seen the Energy Innovation think tank from what

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Speaker 3: you're saying, suggests that maybe it'd be a little bit

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Speaker 3: on the but their estimate of the impact on bills

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Speaker 3: would be that the average energy bill by twenty thirty

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Speaker 3: five could be nearly five hundred dollars higher in Michigan,

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Speaker 3: similar maybe more in Maryland, and six or seven hundred

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Speaker 3: eight hundred dollars higher in Texas than it would have

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Speaker 3: been if the credits had remained.

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Speaker 2: Yeah, I can't, I won't. I guess I want to

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Speaker 2: dispute that we haven't done that analysis ourselves. I've seen

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Speaker 2: different numbers from other research firms as well. There's no question,

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Speaker 2: particularly in a market like Texas, which is really deregulated

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Speaker 2: and where pricing can get passed along directly to large

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Speaker 2: scale consumers, there's no question this is going to have

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Speaker 2: a real impact ultimately. I think the interesting question is

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Speaker 2: what about businesses. I mean, we talk a lot about

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Speaker 2: retail consumers, and eventually they are the ones who get hit,

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Speaker 2: but more immediately and often cases it's wholesale purchases of

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Speaker 2: electricity that feel the effects. And that is one of

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Speaker 2: the puzzling things why in this debate where the utility

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Speaker 2: is not more engaged in this, because ultimately they're the

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Speaker 2: ones who are going to get bigger bills that they're

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Speaker 2: going to have to pass along to their consumers. Or

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Speaker 2: where were the manufacturers who are going to have to

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Speaker 2: pay higher prices for electricity than they if you're in

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Speaker 2: the say Orcot market or PJM. I'm huzzled as to

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Speaker 2: why there wasn't a more engaged conversation around this, And you're.

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Speaker 3: Really my mind, even because I was thinking about your title,

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Speaker 3: Emily and the fact that you are a reporter focusing

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Speaker 3: on corporate lobbying and influence. You know, people have focused

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Speaker 3: on the impact and the influence of the fossil fuel

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Speaker 3: lobby in driving part of this bill. And we know

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Speaker 3: that there's some parts of that industry that have been

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Speaker 3: big donors to Donald Trump. But there were awful lot

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Speaker 3: of people on the other side of the argument, including

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Speaker 3: as Ethan mentions, there's the utilities and sectors that would

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Speaker 3: really be hurt by this, not to mention the tech

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Speaker 3: firms who are lobbying to get more cheap electricity. So

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Speaker 3: why is it those voices just weren't heard in the

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Speaker 3: last few weeks.

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Speaker 5: Ultimately, the reason this bill goes so aggressively against clean

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Speaker 5: energy is because of how Speaker Mike Johnson's math issue,

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Speaker 5: which was that he could only stand to lose a

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Speaker 5: very small number of Republican votes, and so that made

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Speaker 5: the House Freedom Caucus, the group of hardline conservatives in

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Speaker 5: the House, that made them very powerful in this conversation,

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Speaker 5: and a lot of them, for the most part, really

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Speaker 5: leaned towards the oil and gas industry. So thinking about

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Speaker 5: Chip Roy from Texas, he was one of the most

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Speaker 5: consistent voices saying we really need to phase out these

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Speaker 5: subsidies very quickly. He was in communication very closely with

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Speaker 5: a conservative activist named Alex Epstein who actually shaped a

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Speaker 5: lot of this debate behind the scenes, and basically Alex

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Speaker 5: Epstein's arguments are in favor of natural gas. He says

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Speaker 5: that solar and wind are unreliable sources of energy. You know,

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Speaker 5: I'll let you debunk some of what he has to say,

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Speaker 5: but essentially that the subies artificially lowered the cost of

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Speaker 5: electricity and were creating infleetion. So there is a lot

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Speaker 5: of arguments behind the scenes against the clean energy industry

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Speaker 5: and ultimately I think oil and gas just really won

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Speaker 5: in this bill.

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Speaker 2: To be clear, they're subsidized too.

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Speaker 3: Yeah, I was going to say, there's a hell of

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Speaker 3: a lot of subsidy on that side, but somehow they

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Speaker 3: need subsdy but the clean energy doesn't. I mean, even

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Speaker 3: Texas is a surprise, right. I Mean that was one

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Speaker 3: of the things that we said after Donald Trump won

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Speaker 3: the election, and there was obviously this question mark about

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Speaker 3: where would he go on And there was some pushback

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Speaker 3: initially on the idea that he would completely repeal the

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Speaker 3: IRA the Biden era tax credits, in part because of

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Speaker 3: the support from the tech industry, but also because it

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Speaker 3: was noticed that partly because it's easier to build stuff

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Speaker 3: in the Red states. That there were a lot of

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Speaker 3: Republican states that had actually benefited enormously from the RA,

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Speaker 3: including Texas. I think most of its new electricity supply

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Speaker 3: had come from renewables in the last couple of years.

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Speaker 3: So it's interesting that the representative from Texas just doesn't

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Speaker 3: seem to factor that in.

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Speaker 5: Yeah, it just became such a political talking point, calling

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Speaker 5: the IRA the Green new Scam, making it democrat led

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Speaker 5: project essentially that Republicans had to completely nix and create

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Speaker 5: their own path forward when it comes to energy, And

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Speaker 5: an interesting element of the bill is that it's a

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Speaker 5: lot less aggressive when it comes to nuclear energy, which

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Speaker 5: is an area that I know the tech companies have

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Speaker 5: been investing a lot into. Obviously, that's a lot slower

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Speaker 5: moving and it doesn't address the immediate energy needs of

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Speaker 5: data centers. But the nuclear energy industry came out with

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Speaker 5: far less battle scars than some other parts of the industry.

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Speaker 5: And that's a part of this conversation too, is sort

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Speaker 5: of like weighing things in favor of certain kinds of

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Speaker 5: energy over others.

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Speaker 3: There was again much conversation about the political fallout from

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Speaker 3: this bill. You know, over the last few weeks people

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Speaker 3: have wondered whether the Republicans are ready, kind of ready

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Speaker 3: for what happens in their constituencies when the impact of

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Speaker 3: Medicaid cuts and others come through. But you would think

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Speaker 3: if there's a short term big increase in energy prices

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Speaker 3: and that hits people's utility bills, they're electricity bills, is

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Speaker 3: there not a fear on the hill the finger will

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Speaker 3: be pointed to this bill when it comes to that.

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Speaker 3: I mean, it's cost of living is such a big

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Speaker 3: element of the Trump pledge, the promise if you like

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Speaker 3: to voters, do they just think they'll be able to

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Speaker 3: blame other stuff? Yeah?

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Speaker 5: I think part of the sleight of hand is that

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Speaker 5: tax cuts are coming in more immediately than some of

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Speaker 5: the spending cuts, So meaning in the more immediate term,

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Speaker 5: some people are going to see their taxes decrease, whereas

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Speaker 5: some of the potential added costs to electricity bills or

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Speaker 5: some of the loss of Medicaid coverage comes farther down

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Speaker 5: the line. So it is a lot about timelines as well.

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Speaker 5: They've written it in a way that at least Republicans

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Speaker 5: hope that people don't see the more negative effects until

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Speaker 5: after the midterms in twenty twenty eight.

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Speaker 2: If I could jump in, I think you're also maybe

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Speaker 2: ascribing a much higher level of sophistication to this conversation.

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Speaker 2: Then probably actually went on, I don't know that people

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Speaker 2: on the hill understand the economics of power generation at

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Speaker 2: the moment, and the fact that renewables are the most

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Speaker 2: cost competitive, and the fact that it's impossible to get

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Speaker 2: your hands on a natural gas turbine. These are things

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Speaker 2: that only nerds like me know, So I don't know

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Speaker 2: that stuff that they're kind of across.

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Speaker 3: Would there argument be, Yeah, it's hard under Biden to

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Speaker 3: get this stuff built, but we're going to lift all

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Speaker 3: of these stupid restrictions, and so that natural gas power

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Speaker 3: station could go up in a year.

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Speaker 2: So that just I mean, again to not get in

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Speaker 2: the rabbit hole here. But if there's three or four

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Speaker 2: companies that make these we're talking large scale turbines. These

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Speaker 2: are big things, specialized manufacturing that goes into them. If

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Speaker 2: you're one of the three or four companies in the

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Speaker 2: world that makes them, and you are selling them at

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Speaker 2: a very high price at the moment, and you have

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Speaker 2: a back order I guess the question is do you

439
00:23:18,280 --> 00:23:22,160
Speaker 2: ramp up your manufacturing of those turbines, And if you do,

440
00:23:22,200 --> 00:23:23,600
Speaker 2: how long is it going to take you to ramp

441
00:23:23,680 --> 00:23:25,760
Speaker 2: that up? At least a couple of years at the

442
00:23:25,880 --> 00:23:27,560
Speaker 2: very very least, and then a few more years at

443
00:23:27,640 --> 00:23:29,879
Speaker 2: least before you can get some more turbines out. And

444
00:23:29,920 --> 00:23:31,760
Speaker 2: if you're one of those companies and you're looking at

445
00:23:31,800 --> 00:23:34,520
Speaker 2: the US situation, the political situation here, I think you

446
00:23:34,600 --> 00:23:36,960
Speaker 2: might very well ask yourself, well, is this the new

447
00:23:36,960 --> 00:23:38,520
Speaker 2: world we're living in? Or are we going to see

448
00:23:38,520 --> 00:23:40,480
Speaker 2: some flip back in two or three years back to

449
00:23:40,520 --> 00:23:44,880
Speaker 2: renewables and suddenly I've got more gas turbine capacity, manufacturing

450
00:23:44,880 --> 00:23:46,800
Speaker 2: capacity than I know what to do with. I'd be

451
00:23:46,920 --> 00:23:49,360
Speaker 2: very surprised if there's big investment. But keep an eye

452
00:23:49,400 --> 00:23:51,359
Speaker 2: on GE and some of the others to see whether

453
00:23:51,400 --> 00:23:52,679
Speaker 2: they make announcements around that.

454
00:23:53,000 --> 00:23:54,359
Speaker 3: And it is true when you say is that the

455
00:23:54,359 --> 00:23:56,000
Speaker 3: world we're living in? I mean it's pretty clear that

456
00:23:56,040 --> 00:23:58,640
Speaker 3: the world we're living in looks very different, looks more

457
00:23:58,720 --> 00:24:02,600
Speaker 3: like the IRA world. As you noted, there's lots of

458
00:24:02,600 --> 00:24:07,280
Speaker 3: countries that have got strong incentives in place for renewables,

459
00:24:07,320 --> 00:24:12,600
Speaker 3: and we also see developing countries moving to electrify large

460
00:24:12,640 --> 00:24:16,000
Speaker 3: parts of their grid because it is it's certainly cheaper

461
00:24:16,000 --> 00:24:19,159
Speaker 3: for them if they're reliant otherwise on imported oil and gas.

462
00:24:19,280 --> 00:24:21,320
Speaker 2: Yeah. No, I think you raise a very good question.

463
00:24:21,400 --> 00:24:24,080
Speaker 2: This is not the death of the US renewable energy

464
00:24:24,119 --> 00:24:26,879
Speaker 2: industry in the United States by any means, because of

465
00:24:26,920 --> 00:24:30,040
Speaker 2: the advancements that we've seen, but it is a major setback,

466
00:24:30,280 --> 00:24:32,879
Speaker 2: and most importantly, maybe at the bottom line, as it

467
00:24:32,880 --> 00:24:36,480
Speaker 2: means our chances of coming anywhere close to reducing our

468
00:24:36,520 --> 00:24:39,000
Speaker 2: CO two missions in line with address and climate chains

469
00:24:39,040 --> 00:24:41,040
Speaker 2: are effectively over at the moment.

470
00:24:41,560 --> 00:24:44,080
Speaker 3: I guess there's one argument, which if it's so unstoppable,

471
00:24:44,160 --> 00:24:46,919
Speaker 3: we've had this period where we've ramped up production with

472
00:24:47,040 --> 00:24:50,719
Speaker 3: these massive credits, which were extremely expensive. They blew at

473
00:24:50,840 --> 00:24:54,439
Speaker 3: least a trillion dollar hole in the deficit, And of

474
00:24:54,480 --> 00:24:56,159
Speaker 3: course we can say there are other things that are

475
00:24:56,200 --> 00:24:57,960
Speaker 3: now going to blow a hole in the deficit over

476
00:24:58,000 --> 00:25:01,520
Speaker 3: the coming years thanks to last week's bill. But there

477
00:25:01,560 --> 00:25:03,360
Speaker 3: is an argument that says it ought to be able

478
00:25:03,359 --> 00:25:04,640
Speaker 3: to stand on its own two feet.

479
00:25:04,720 --> 00:25:07,359
Speaker 2: No, well, two things. The clean energy credits did not

480
00:25:07,440 --> 00:25:09,040
Speaker 2: on their own blow a trillion dollar hole in the

481
00:25:09,080 --> 00:25:12,159
Speaker 2: deficit they were projected potentially to have done so, but

482
00:25:12,200 --> 00:25:14,360
Speaker 2: of course now we're living in a different world where

483
00:25:14,400 --> 00:25:16,160
Speaker 2: they certainly are not going to cost as much as

484
00:25:16,280 --> 00:25:19,000
Speaker 2: was projected. And even that number I would take a

485
00:25:19,000 --> 00:25:21,720
Speaker 2: little issue with because it made certain assumptions about hydrogen

486
00:25:21,760 --> 00:25:24,320
Speaker 2: and other things that haven't really come to pass. But

487
00:25:24,400 --> 00:25:26,040
Speaker 2: you're right, they were living in a new world in

488
00:25:26,040 --> 00:25:28,280
Speaker 2: which these industry is going to have to compete without

489
00:25:28,359 --> 00:25:31,439
Speaker 2: the benefit of tax credits. Unfortunately, it's going to compete

490
00:25:31,440 --> 00:25:35,240
Speaker 2: against some existing sources of generation that have been subsidized

491
00:25:35,240 --> 00:25:37,760
Speaker 2: for a very long time. And of course the administration

492
00:25:37,880 --> 00:25:40,200
Speaker 2: is also going to try and take steps whatever they

493
00:25:40,240 --> 00:25:43,080
Speaker 2: can to try and make existing coal fire generation more

494
00:25:43,119 --> 00:25:45,840
Speaker 2: cost competitive, although it's very unclear to me like what

495
00:25:45,880 --> 00:25:49,080
Speaker 2: they can actually do that changes the economics of coal.

496
00:25:49,160 --> 00:25:51,000
Speaker 3: I was going to ask you that, actually that's the

497
00:25:51,080 --> 00:25:53,840
Speaker 3: thing that Donald Trump has held out. You know, yes,

498
00:25:53,880 --> 00:25:57,280
Speaker 3: it's hard to build a new gas power station, but

499
00:25:57,840 --> 00:26:01,119
Speaker 3: if you have a coal powered station that you were

500
00:26:01,160 --> 00:26:03,520
Speaker 3: about to close down, or you've maybe just closed down,

501
00:26:03,680 --> 00:26:05,240
Speaker 3: how hard is it just to turn that back on

502
00:26:05,359 --> 00:26:07,119
Speaker 3: and how hard is it to get the mines up

503
00:26:07,119 --> 00:26:08,560
Speaker 3: and running again, which is what he's.

504
00:26:08,440 --> 00:26:11,760
Speaker 2: Talked about hard is the short answer. It can issue

505
00:26:11,800 --> 00:26:15,240
Speaker 2: executive orders to try and order certain plants to keep online,

506
00:26:15,560 --> 00:26:18,600
Speaker 2: but the reality is that coal is not economically competitive

507
00:26:18,640 --> 00:26:21,040
Speaker 2: for the most part in the United States, particularly with gas,

508
00:26:21,119 --> 00:26:23,920
Speaker 2: but also with renewable So you can try and force

509
00:26:24,040 --> 00:26:26,359
Speaker 2: operators to keep running plants, but no one. I'm not

510
00:26:26,359 --> 00:26:28,080
Speaker 2: a lawyer here, but I think it's tough to force

511
00:26:28,119 --> 00:26:30,680
Speaker 2: people to lose money on every megawat hour of electricity

512
00:26:30,720 --> 00:26:33,080
Speaker 2: that they produce, because you're trying to make a point

513
00:26:33,359 --> 00:26:35,560
Speaker 2: about what you think the world should look like in

514
00:26:35,640 --> 00:26:38,879
Speaker 2: terms of energy consumption that looks something like nineteen eighty seven.

515
00:26:39,880 --> 00:26:41,919
Speaker 3: It is extraordinary to me as someone who kind of

516
00:26:41,960 --> 00:26:45,200
Speaker 3: grew up with Margaret Thatcher's defining battle in the nineteen

517
00:26:45,240 --> 00:26:50,480
Speaker 3: eighties against the uneconomic coal producing mines in the UK,

518
00:26:50,800 --> 00:26:54,560
Speaker 3: and there was obviously enormous controversy ever trying to shut

519
00:26:54,600 --> 00:26:56,720
Speaker 3: them down. But to have a republic administration trying to

520
00:26:56,760 --> 00:27:00,240
Speaker 3: reopen a lot of our economic coal mines is an interesting.

521
00:27:00,400 --> 00:27:02,040
Speaker 2: I mean, the question is just is there money to

522
00:27:02,080 --> 00:27:04,800
Speaker 2: do this right? Ultimately, if you want to mobilize private

523
00:27:04,840 --> 00:27:07,639
Speaker 2: capital to go out and do that, then that money

524
00:27:07,680 --> 00:27:09,840
Speaker 2: has to believe that this is the world that we're

525
00:27:09,840 --> 00:27:11,480
Speaker 2: going to live in for the next five or ten

526
00:27:11,560 --> 00:27:15,159
Speaker 2: or twenty years. And I think most investors look at

527
00:27:15,200 --> 00:27:18,919
Speaker 2: this and say, Okay, certainly, this is a certainly regressive

528
00:27:18,960 --> 00:27:21,159
Speaker 2: period that we're living through, But the end of the day,

529
00:27:21,240 --> 00:27:24,080
Speaker 2: climate change isn't going anywhere. It's only going to get worse.

530
00:27:24,440 --> 00:27:27,080
Speaker 2: And so if you believe there's an inevitability that eventually

531
00:27:27,119 --> 00:27:29,639
Speaker 2: policy makers, whether they deal with climate change in the

532
00:27:29,680 --> 00:27:32,080
Speaker 2: short run of the long run, they eventually deal with it.

533
00:27:32,520 --> 00:27:34,800
Speaker 2: I think many people would find it very hard to

534
00:27:34,800 --> 00:27:36,960
Speaker 2: swallow the idea of making a ten or twenty year

535
00:27:37,000 --> 00:27:38,760
Speaker 2: investment in a new coal mine.

536
00:27:39,560 --> 00:27:42,399
Speaker 3: But Emily, it seems like there'd be plenty of appetite

537
00:27:42,480 --> 00:27:43,320
Speaker 3: on the hill for that.

538
00:27:44,440 --> 00:27:48,320
Speaker 5: Yes, I think there will be. I think this bill

539
00:27:48,480 --> 00:27:52,720
Speaker 5: got held up in the House for just a couple

540
00:27:52,720 --> 00:27:58,000
Speaker 5: of days after leaving the Senate because this group of

541
00:27:58,160 --> 00:28:03,680
Speaker 5: Republicans said, we want to go harder against clean energy,

542
00:28:04,200 --> 00:28:08,280
Speaker 5: we want more favorable terms for oil and gas, and

543
00:28:09,320 --> 00:28:13,160
Speaker 5: they spent hours and hours in the White House at

544
00:28:13,200 --> 00:28:17,360
Speaker 5: the eleventh hour trying to extract as many concessions from

545
00:28:17,359 --> 00:28:20,560
Speaker 5: the administration on this as they possibly could. And I

546
00:28:20,680 --> 00:28:23,600
Speaker 5: think that is bearing out that bore out yesterday in

547
00:28:23,680 --> 00:28:27,920
Speaker 5: terms of this executive order, and we're going to continue

548
00:28:28,000 --> 00:28:31,920
Speaker 5: to see the deals that were made, the agreements that

549
00:28:31,960 --> 00:28:36,960
Speaker 5: they hashed out recreating the energy landscape in their image.

550
00:28:37,320 --> 00:28:40,280
Speaker 3: So, as Ethan pointedly made clear, this is the end

551
00:28:40,320 --> 00:28:44,080
Speaker 3: of the story for any expectation that the US would

552
00:28:44,120 --> 00:28:47,520
Speaker 3: meet its climate change obligations, but apparently not the end

553
00:28:47,520 --> 00:28:50,280
Speaker 3: of the story when it comes to the assault on renewables.

554
00:28:50,280 --> 00:28:51,920
Speaker 3: Emily Ethan, thank you so.

555
00:28:51,960 --> 00:28:53,000
Speaker 2: Much, Thank you.

556
00:28:58,560 --> 00:29:01,120
Speaker 3: Thanks for listening to Trumpnomics Bloomberg. It was hosted by

557
00:29:01,120 --> 00:29:04,240
Speaker 3: me Stephanie Flanders. I was joined by Bloomberg reporter Emily

558
00:29:04,240 --> 00:29:09,240
Speaker 3: Bernbaum and Bloomberg ne ef Ethan Zindler. Trumponomics is produced

559
00:29:09,240 --> 00:29:12,160
Speaker 3: by Summer Sudi and Moses and Am with help from

560
00:29:12,200 --> 00:29:16,000
Speaker 3: Amy Keene and special thanks this week to Rachel Lewis Kriskey.

561
00:29:16,720 --> 00:29:20,080
Speaker 3: Sound design is by Blake Maples and Sage Bowman is

562
00:29:20,120 --> 00:29:25,280
Speaker 3: the head of Bloomberg Podcasts and Please to help others

563
00:29:25,280 --> 00:29:27,760
Speaker 3: find this show, please rate it and review it highly

564
00:29:27,920 --> 00:29:28,840
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