1 00:00:00,320 --> 00:00:03,960 Speaker 1: Hi It Suksha. The US Congress has passed President Donald 2 00:00:03,960 --> 00:00:07,880 Speaker 1: Trump's One Big, Beautiful Bill, and it has huge implications 3 00:00:07,880 --> 00:00:12,240 Speaker 1: for America's climate goals and growing energy needs. Later this week, 4 00:00:12,640 --> 00:00:15,320 Speaker 1: Zero will host Jiggershaw, who used to be the head 5 00:00:15,360 --> 00:00:19,040 Speaker 1: of the US Department of Energy's Loan Programs Office, to 6 00:00:19,160 --> 00:00:22,360 Speaker 1: understand how the bill will affect the clean energy industry. 7 00:00:23,079 --> 00:00:25,639 Speaker 1: But there's a lot to unpack in this new legislation. 8 00:00:26,000 --> 00:00:28,480 Speaker 1: So today we are sharing a bonus episode from our 9 00:00:28,520 --> 00:00:32,839 Speaker 1: sister podcast, Trumpanomics. It's hosted by Bloomberg's head of Government 10 00:00:32,840 --> 00:00:36,559 Speaker 1: and Economics, Stephanie Flanders, and she is in conversation with 11 00:00:36,640 --> 00:00:41,200 Speaker 1: Bloomberg nefs Ethan Zindler and Bloomberg lobbying and influenced reporter 12 00:00:41,560 --> 00:00:43,800 Speaker 1: Emily Bernbaum. It's a good. 13 00:00:43,640 --> 00:00:52,839 Speaker 2: Listen Bloomberg Audio Studios, Podcasts, Radio News. This is not 14 00:00:52,960 --> 00:00:55,680 Speaker 2: the death of the US renewable energy industry in the 15 00:00:55,760 --> 00:00:57,800 Speaker 2: United States, but it is a major setback. 16 00:01:06,959 --> 00:01:09,800 Speaker 3: I'm Stephanie Flanders, head of Government and Economics at Bloomberg. 17 00:01:10,040 --> 00:01:13,160 Speaker 3: Welcome to Trumppnomics, the podcast that looks at the economic 18 00:01:13,200 --> 00:01:16,160 Speaker 3: world of Donald Trump. Now he's already shaped the global 19 00:01:16,200 --> 00:01:19,160 Speaker 3: economy and what on Earth is going to happen next. 20 00:01:19,840 --> 00:01:23,400 Speaker 3: This week we're talking about the big beautiful assault on 21 00:01:23,520 --> 00:01:28,240 Speaker 3: renewable energy. Will the Republican Megabill pass last week bring 22 00:01:28,280 --> 00:01:31,440 Speaker 3: on a new American energy crisis? What could be the 23 00:01:31,440 --> 00:01:36,160 Speaker 3: impact on electricity bills, the broader economy, and America's leadership 24 00:01:36,240 --> 00:01:40,240 Speaker 3: in the race for artificial intelligence. We're recording this on Tuesday, 25 00:01:40,280 --> 00:01:42,840 Speaker 3: the eighth of July. And of all the elements of 26 00:01:42,880 --> 00:01:45,760 Speaker 3: the one Big Beautiful Bill, as Donald Trump called it, 27 00:01:45,800 --> 00:01:49,200 Speaker 3: that he signed going into the July fourth holiday, one 28 00:01:49,400 --> 00:01:51,640 Speaker 3: I find particularly hard to get my head round is 29 00:01:51,680 --> 00:01:54,480 Speaker 3: the decision to get rid of tax credits for clean energy. 30 00:01:54,960 --> 00:01:57,400 Speaker 3: As a result of that, wind and solar projects will 31 00:01:57,440 --> 00:01:59,800 Speaker 3: cost more and more likely there will be a lot 32 00:01:59,800 --> 00:02:02,360 Speaker 3: few you are built. In fact, in an analysis this week, 33 00:02:02,400 --> 00:02:06,240 Speaker 3: a climate policy think tank called Energy Innovation forecast that 34 00:02:06,280 --> 00:02:08,800 Speaker 3: the bill would put an end to three hundred gigawatts 35 00:02:08,800 --> 00:02:11,639 Speaker 3: of wind and solar projects that would have otherwise come 36 00:02:11,639 --> 00:02:14,080 Speaker 3: online in the next fifteen years. That's the equivalent of 37 00:02:14,080 --> 00:02:17,880 Speaker 3: about three hundred nuclear reactors. Now, obviously that set back 38 00:02:17,919 --> 00:02:21,160 Speaker 3: the fight against climate change and the decarbonization of the 39 00:02:21,280 --> 00:02:23,840 Speaker 3: US economy and That may not be much of a 40 00:02:23,840 --> 00:02:25,960 Speaker 3: worry for the supporters of the big bill, but there 41 00:02:25,960 --> 00:02:29,639 Speaker 3: could be more concern about another very likely consequence, higher 42 00:02:29,720 --> 00:02:34,280 Speaker 3: electricity prices. That matters for voters facing rising utility bills, 43 00:02:34,280 --> 00:02:37,120 Speaker 3: but it also matters for tech firms chasing the next 44 00:02:37,160 --> 00:02:41,080 Speaker 3: breakthroughs in AI. The country that reigns supreme in AI 45 00:02:41,200 --> 00:02:43,720 Speaker 3: will rule the world. Everyone seems to think that these days, 46 00:02:43,760 --> 00:02:46,320 Speaker 3: including Donald Trump. In fact, you might remember, on the 47 00:02:46,360 --> 00:02:49,520 Speaker 3: day after his inauguration he announced the creation of Stargate, 48 00:02:49,919 --> 00:02:53,440 Speaker 3: a project to expand AI infrastructure in the US, but. 49 00:02:53,480 --> 00:02:57,760 Speaker 4: To announce the largest AI infrastructure project by far in history. 50 00:02:58,240 --> 00:03:02,919 Speaker 4: And it's all taking place right here in America. As 51 00:03:02,960 --> 00:03:05,360 Speaker 4: you know, there's great competition for AI and. 52 00:03:05,320 --> 00:03:08,440 Speaker 3: Book projects like Stargate need electricity, lots of it, And 53 00:03:08,480 --> 00:03:11,080 Speaker 3: in fact, that's part of the reason electricity demand in 54 00:03:11,120 --> 00:03:13,960 Speaker 3: the US is rising faster now than it has at 55 00:03:14,040 --> 00:03:17,000 Speaker 3: any time in the last twenty years. The tax credits 56 00:03:17,000 --> 00:03:19,840 Speaker 3: in the Inflation Reduction Act on the President Biden helped 57 00:03:19,840 --> 00:03:22,600 Speaker 3: the US keep up with that rising demand. In theory 58 00:03:22,639 --> 00:03:26,720 Speaker 3: by making clean power sources cheaper. Investments in wind, solar, 59 00:03:26,760 --> 00:03:29,920 Speaker 3: and battery storage had spiked in the years after the 60 00:03:29,960 --> 00:03:33,560 Speaker 3: IRA was passed. But now the big bill has changed 61 00:03:33,560 --> 00:03:36,880 Speaker 3: all that and a lot of people, including me, scratching 62 00:03:36,880 --> 00:03:40,120 Speaker 3: their heads wondering what the plan is now. And this 63 00:03:40,200 --> 00:03:42,640 Speaker 3: week I'm delighted to say I'm in the Washington Studio 64 00:03:42,760 --> 00:03:45,360 Speaker 3: with two guests who have a good perspective on this 65 00:03:45,440 --> 00:03:47,800 Speaker 3: topic and can help me think through the consequences for 66 00:03:47,880 --> 00:03:51,000 Speaker 3: the US economy. First up, Ethan Zindler, the head of 67 00:03:51,040 --> 00:03:54,320 Speaker 3: Country and Policy Research at Bloomberg NEF that's the part 68 00:03:54,320 --> 00:03:58,240 Speaker 3: of Bloomberg Research that's focused on the energy transition. And 69 00:03:58,280 --> 00:04:01,320 Speaker 3: we should say that before join US, Ethan served as 70 00:04:01,400 --> 00:04:04,360 Speaker 3: Climate Counselor to the US Treasury Secretary of Janet Yellen 71 00:04:04,720 --> 00:04:08,080 Speaker 3: from July twenty twenty three to January twenty five, so 72 00:04:08,160 --> 00:04:11,440 Speaker 3: he was across a lot of policy efforts then, including 73 00:04:11,920 --> 00:04:15,040 Speaker 3: helping to write and implement the Inflation Reduction Act. 74 00:04:15,360 --> 00:04:16,960 Speaker 2: Welcome Ethan, thanks for having. 75 00:04:16,839 --> 00:04:19,799 Speaker 3: Me, and also with us Emily Bernbaut, who's a Bloomberg 76 00:04:19,839 --> 00:04:23,560 Speaker 3: reporter here in DC who covers corporate lobbying and influence. 77 00:04:23,640 --> 00:04:25,800 Speaker 3: Thank you so much for being on Trump andomics. Emily, 78 00:04:26,040 --> 00:04:32,839 Speaker 3: Thank you. So people will have heard quite a lot 79 00:04:32,839 --> 00:04:37,040 Speaker 3: about that bill, but it's probably useful to just take 80 00:04:37,120 --> 00:04:43,479 Speaker 3: stock of how that turn the tables for the renewable industry. 81 00:04:43,480 --> 00:04:45,880 Speaker 3: What are the specific measures that are going to be 82 00:04:45,920 --> 00:04:49,080 Speaker 3: pain for for that part of the US energy industry. 83 00:04:49,920 --> 00:04:52,560 Speaker 5: There was a lot of last minute wrangling over the 84 00:04:52,640 --> 00:04:57,039 Speaker 5: details of what this bill will do to the clean 85 00:04:57,160 --> 00:05:02,200 Speaker 5: energy industry. The top line is is that it's very bad. 86 00:05:02,680 --> 00:05:05,839 Speaker 5: It's not as bad as it could have been. What 87 00:05:06,040 --> 00:05:09,920 Speaker 5: ended up in the bill was pretty aggressive timelines for 88 00:05:10,200 --> 00:05:14,560 Speaker 5: phasing out tax credits. But elements of the bill would 89 00:05:15,120 --> 00:05:19,320 Speaker 5: encourage companies to begin construction over the next year, and 90 00:05:19,400 --> 00:05:22,240 Speaker 5: if they're able to do so, it's likelier that they'll 91 00:05:22,279 --> 00:05:25,120 Speaker 5: be able to get some of these important tax credits. 92 00:05:25,640 --> 00:05:31,000 Speaker 5: But overall, they're going to have to begin construction very quickly, 93 00:05:31,680 --> 00:05:34,760 Speaker 5: and these tax credits are going away on a more 94 00:05:34,760 --> 00:05:38,279 Speaker 5: aggressive timeline than had initially been anticipated. 95 00:05:38,560 --> 00:05:40,120 Speaker 3: Yeah, and that was what was interesting, because when it 96 00:05:40,160 --> 00:05:41,880 Speaker 3: went from the House to the Senate, there was some 97 00:05:42,040 --> 00:05:47,440 Speaker 3: expectation that the Senate would want to extend the time 98 00:05:47,520 --> 00:05:49,720 Speaker 3: frame a little bit. The investments the drawer have been 99 00:05:49,720 --> 00:05:52,560 Speaker 3: announced give them a bit more time to get up 100 00:05:52,640 --> 00:05:55,239 Speaker 3: and running. But if anything, the bills seem to get worse. 101 00:05:56,120 --> 00:06:00,039 Speaker 5: Yes, and at the last minute, there was something that 102 00:06:00,040 --> 00:06:02,680 Speaker 5: would have dealt a huge blow to the industry, which 103 00:06:02,760 --> 00:06:05,960 Speaker 5: was this excise tax. There was basically panic in the 104 00:06:06,000 --> 00:06:09,640 Speaker 5: industry and among moderate Republicans who said this excise tax 105 00:06:09,920 --> 00:06:14,840 Speaker 5: would so dramatically increase costs for solar and wind projects, 106 00:06:15,640 --> 00:06:19,200 Speaker 5: it would effectively make it untenable for a lot of 107 00:06:19,279 --> 00:06:22,600 Speaker 5: these projects to move forward or begin construction. So right 108 00:06:22,640 --> 00:06:25,360 Speaker 5: before the Senate passed it, they removed the excise tax, 109 00:06:25,400 --> 00:06:28,239 Speaker 5: which is a huge relief, but they still are dealing 110 00:06:28,279 --> 00:06:30,000 Speaker 5: with pretty aggressive phase outs. 111 00:06:30,360 --> 00:06:34,320 Speaker 3: Ethan, you were saying just before we started that even 112 00:06:34,360 --> 00:06:37,359 Speaker 3: though parts of the renewables industry was kind of breathing 113 00:06:37,360 --> 00:06:39,200 Speaker 3: a sigh of relief or having at least dodged that 114 00:06:39,240 --> 00:06:43,039 Speaker 3: particular bullet not having this extra tax, that the administration 115 00:06:43,120 --> 00:06:45,919 Speaker 3: has already sort of vindicated that it's not done with 116 00:06:45,960 --> 00:06:49,279 Speaker 3: the renewable industry. Yet what happened earlier this week. 117 00:06:49,360 --> 00:06:51,360 Speaker 2: Yeah, things have kind of gone from bad to worst, 118 00:06:51,360 --> 00:06:54,839 Speaker 2: even within the last less than twenty four hours. Basically, 119 00:06:54,880 --> 00:06:58,440 Speaker 2: there's been some real questions about whether projects could qualify 120 00:06:58,600 --> 00:07:01,560 Speaker 2: so long as they were quote unquo quote under construction 121 00:07:02,160 --> 00:07:07,000 Speaker 2: and the irs historically is to find under construction fairly liberally. 122 00:07:07,640 --> 00:07:11,320 Speaker 2: And yesterday the White House issue to executive order basically 123 00:07:11,400 --> 00:07:14,280 Speaker 2: saying that they are ordering the Treasury Department within the 124 00:07:14,320 --> 00:07:17,720 Speaker 2: next forty five days to rewrite that rule, and if 125 00:07:17,720 --> 00:07:19,680 Speaker 2: they do that in such a way, they can make 126 00:07:19,680 --> 00:07:23,840 Speaker 2: it very challenging for projects to qualify. It is not 127 00:07:23,920 --> 00:07:26,240 Speaker 2: even beyond the realm of the possible that they would 128 00:07:26,280 --> 00:07:30,160 Speaker 2: write something that is essentially retroactive and effectively make it 129 00:07:30,240 --> 00:07:32,640 Speaker 2: much more challenging for projects to actually be able to 130 00:07:32,720 --> 00:07:35,720 Speaker 2: qualify for the credit. So from our perspective at Bloomberg 131 00:07:35,800 --> 00:07:38,160 Speaker 2: n EF, we're trying to go back and sharpen our 132 00:07:38,200 --> 00:07:40,120 Speaker 2: pencils and try and think about how much stuff is 133 00:07:40,160 --> 00:07:41,480 Speaker 2: going to get built. But I think the one thing 134 00:07:41,520 --> 00:07:44,120 Speaker 2: that's pretty clear as of this morning is that many 135 00:07:44,120 --> 00:07:46,160 Speaker 2: who are in the wind and solar and storage industry 136 00:07:46,200 --> 00:07:48,760 Speaker 2: are probably scrambling to get as much stuff as they 137 00:07:48,800 --> 00:07:52,840 Speaker 2: can essentially under construction at this very moment, while they 138 00:07:52,880 --> 00:07:56,080 Speaker 2: are concurrently probably lobbying the Treasury Department about what this 139 00:07:56,120 --> 00:07:57,520 Speaker 2: new regulation is going to look like. 140 00:07:57,960 --> 00:07:59,280 Speaker 3: And I'm going to come back to you on some 141 00:07:59,320 --> 00:08:02,040 Speaker 3: of the dynas on the Hill but Ethan, let's just 142 00:08:02,320 --> 00:08:05,320 Speaker 3: step back, and I know that's what Bloomerginny f likes doing. 143 00:08:05,400 --> 00:08:08,520 Speaker 3: They tend to do the twenty five year horizons considered 144 00:08:08,520 --> 00:08:12,920 Speaker 3: to be quite short term. But if you do take 145 00:08:12,960 --> 00:08:15,400 Speaker 3: that kind of longer term, you know, what has been 146 00:08:15,440 --> 00:08:20,040 Speaker 3: happening to energy demand and electricity demand within that in 147 00:08:20,680 --> 00:08:23,720 Speaker 3: recent years and what was you know, until this bill, 148 00:08:23,800 --> 00:08:25,720 Speaker 3: what was that basic plan for meeting it? 149 00:08:26,160 --> 00:08:29,600 Speaker 2: Yeah, So the United States, like other wealthy developed countries, 150 00:08:29,840 --> 00:08:32,840 Speaker 2: has been able to grow its economy without growing demand 151 00:08:32,880 --> 00:08:36,240 Speaker 2: for electricity. Really for twenty years. Essentially, we've had flat 152 00:08:36,280 --> 00:08:40,439 Speaker 2: demand overall, largely because of energy efficiency improvements and new 153 00:08:40,440 --> 00:08:44,360 Speaker 2: technologies and the desire to save costs. The last couple 154 00:08:44,400 --> 00:08:46,920 Speaker 2: of years that started to change, and we think that's 155 00:08:46,960 --> 00:08:49,719 Speaker 2: going to continue to change going forward. The number one 156 00:08:49,800 --> 00:08:52,360 Speaker 2: driver in the short run has been AI and the 157 00:08:52,400 --> 00:08:55,680 Speaker 2: demand from new data centers. We also think electric vehicles 158 00:08:55,720 --> 00:08:57,320 Speaker 2: as you look further out, are going to start to 159 00:08:57,320 --> 00:08:59,880 Speaker 2: play a much bigger role as well. In the US, 160 00:09:00,520 --> 00:09:02,839 Speaker 2: we think we're going to see demand for electricity double 161 00:09:02,880 --> 00:09:05,560 Speaker 2: from about forty one hundred tarawad hours at the moment 162 00:09:06,040 --> 00:09:08,200 Speaker 2: up over six thousand by the time you get to 163 00:09:08,240 --> 00:09:11,800 Speaker 2: twenty fifty overall, and by twenty thirty five, we think 164 00:09:11,840 --> 00:09:14,800 Speaker 2: that about eight percent of capacity in the United States 165 00:09:15,160 --> 00:09:18,440 Speaker 2: is going to go specifically to powering data centers, which 166 00:09:18,480 --> 00:09:22,360 Speaker 2: is a really considerable portion overall. One other quick just 167 00:09:22,400 --> 00:09:24,520 Speaker 2: note in terms of trends, is that really over the 168 00:09:24,600 --> 00:09:27,080 Speaker 2: last ten years or fifteen years or so, the US 169 00:09:27,080 --> 00:09:32,080 Speaker 2: has really been rapidly decarbonizing our power generation sector. We 170 00:09:32,160 --> 00:09:34,720 Speaker 2: went from about half our power coming from coal to 171 00:09:34,800 --> 00:09:37,000 Speaker 2: well under twenty percent as the last year, could be 172 00:09:37,000 --> 00:09:40,679 Speaker 2: even under fifteen percent this year depending on conditions. And meanwhile, 173 00:09:40,679 --> 00:09:43,320 Speaker 2: renewables have grown from almost nothing to about twenty percent 174 00:09:43,400 --> 00:09:46,520 Speaker 2: of generation. Nuclear is about twenty percent, so we're about 175 00:09:46,520 --> 00:09:49,200 Speaker 2: forty percent zero carbon here. And the natural gas is 176 00:09:49,200 --> 00:09:51,080 Speaker 2: a huge part of the story, which is a lot 177 00:09:51,160 --> 00:09:54,920 Speaker 2: cleaner than coal overall. So the general trend has been 178 00:09:54,960 --> 00:09:57,800 Speaker 2: towards cleaner sources of energy going forward. And if you 179 00:09:57,840 --> 00:09:59,760 Speaker 2: look at what's gotten built in the last several years, 180 00:10:00,040 --> 00:10:01,960 Speaker 2: would get built in the next several years in terms 181 00:10:02,000 --> 00:10:05,679 Speaker 2: of purely cost, it's renewables. The vast majority of new 182 00:10:05,720 --> 00:10:08,600 Speaker 2: stuff that's due to come online as renewables, and so 183 00:10:08,679 --> 00:10:10,800 Speaker 2: that is why it's so questionable that you would go 184 00:10:10,840 --> 00:10:13,720 Speaker 2: out of your way to essentially raise the cost of 185 00:10:13,760 --> 00:10:17,199 Speaker 2: those technologies, which is effectively what Congress is now done. 186 00:10:17,520 --> 00:10:19,359 Speaker 3: Those of us who kind of looked on the outside 187 00:10:19,480 --> 00:10:23,800 Speaker 3: and seen the US go from being a net consumer 188 00:10:23,880 --> 00:10:27,840 Speaker 3: of energy or oil, I should say to an exporter, 189 00:10:28,520 --> 00:10:31,040 Speaker 3: have been very familiar with a rather different story, which 190 00:10:31,080 --> 00:10:35,720 Speaker 3: is America had this fracking revolution which was not environmentally friendly, 191 00:10:35,920 --> 00:10:39,640 Speaker 3: but did bring an enormous amount of gas online, which 192 00:10:39,640 --> 00:10:42,880 Speaker 3: has brought down the price of energy for US consumers. 193 00:10:42,920 --> 00:10:45,520 Speaker 3: So I guess the story that you might tell against 194 00:10:45,600 --> 00:10:47,360 Speaker 3: your story at least be sort of well, hang on 195 00:10:47,400 --> 00:10:49,880 Speaker 3: a minute, it's fracking that has made this a kind 196 00:10:49,920 --> 00:10:54,160 Speaker 3: of golden era for US energy prices, and the renewables 197 00:10:54,320 --> 00:10:57,400 Speaker 3: is not completely reliable and is more is a sort 198 00:10:57,400 --> 00:10:59,320 Speaker 3: of side show to that basic story. 199 00:11:00,120 --> 00:11:02,520 Speaker 2: Really good points. I mean, certainly, we have the lowest 200 00:11:02,520 --> 00:11:05,320 Speaker 2: price natural gas in the world in terms of production, 201 00:11:05,400 --> 00:11:07,680 Speaker 2: and that has allowed a lot of manufacturing to be 202 00:11:07,760 --> 00:11:10,800 Speaker 2: very competitive in the United States. I would note though, 203 00:11:10,840 --> 00:11:13,840 Speaker 2: that first of all, that renewables plus storage gets you 204 00:11:13,880 --> 00:11:16,199 Speaker 2: maybe not to twenty four hours of generation, but can 205 00:11:16,240 --> 00:11:18,679 Speaker 2: get you enough production of electricity into the sort of 206 00:11:18,800 --> 00:11:21,160 Speaker 2: key hours of the evening, and we're starting to see 207 00:11:21,160 --> 00:11:24,600 Speaker 2: solar plus storage be very cost competitive in many markets 208 00:11:24,600 --> 00:11:27,120 Speaker 2: around the world, not all markets in the United States, 209 00:11:27,160 --> 00:11:30,199 Speaker 2: but a bunch of markets. But then just purely speaking 210 00:11:30,200 --> 00:11:32,560 Speaker 2: practically in the United States, in terms of what we're 211 00:11:32,559 --> 00:11:35,360 Speaker 2: going to build over the next five years, you're absolutely 212 00:11:35,440 --> 00:11:38,200 Speaker 2: right that gas is cheap and gas is cost competitive 213 00:11:38,200 --> 00:11:40,160 Speaker 2: in a number of markets in the United States. The 214 00:11:40,240 --> 00:11:42,800 Speaker 2: problem is you just cannot get your hands on a 215 00:11:42,800 --> 00:11:45,760 Speaker 2: combined cycle gas turbine at the moment for a number 216 00:11:45,760 --> 00:11:48,600 Speaker 2: of years, anywhere from three to seven depending on who 217 00:11:48,640 --> 00:11:51,199 Speaker 2: you asked. So in terms of what our next mega 218 00:11:51,240 --> 00:11:53,600 Speaker 2: out of capacity is going to be, it basically has 219 00:11:53,679 --> 00:11:56,720 Speaker 2: to be renewables because there isn't really any other sources 220 00:11:57,280 --> 00:11:59,640 Speaker 2: and if we have rising demand from AI, that means 221 00:11:59,679 --> 00:12:02,559 Speaker 2: it's goin to probably come from renewables. And again, if 222 00:12:02,559 --> 00:12:05,720 Speaker 2: you take away essentially what has been a long standing 223 00:12:05,800 --> 00:12:09,200 Speaker 2: tax credit and subsidy to the clean energy industry that 224 00:12:09,320 --> 00:12:13,160 Speaker 2: is effectively socialized a discounted electricity production price in the 225 00:12:13,240 --> 00:12:15,800 Speaker 2: United States, you're just simply going to concentrate it on 226 00:12:15,880 --> 00:12:18,079 Speaker 2: certain markets. So the next place where you're going to 227 00:12:18,120 --> 00:12:20,640 Speaker 2: build a wind or solar project. Potentially you're going to 228 00:12:20,679 --> 00:12:23,520 Speaker 2: have to sign a higher price contract in order for 229 00:12:23,559 --> 00:12:26,440 Speaker 2: the developer to make the return that they need without 230 00:12:26,480 --> 00:12:27,200 Speaker 2: the tax credit. 231 00:12:27,480 --> 00:12:30,720 Speaker 3: But if they're the only short term viable source of 232 00:12:30,720 --> 00:12:34,480 Speaker 3: additional energy, then it surely must be cost effective to build. 233 00:12:34,800 --> 00:12:36,560 Speaker 2: I mean, here's the question, and I think we're going 234 00:12:36,600 --> 00:12:38,360 Speaker 2: to find this out over the next couple of years, 235 00:12:38,480 --> 00:12:41,960 Speaker 2: is what's the breaking point for consumers? So, yes, you 236 00:12:42,000 --> 00:12:45,160 Speaker 2: can pass on some form of higher electricity prices. But 237 00:12:45,360 --> 00:12:47,679 Speaker 2: if you're a developer of a large scale data center, 238 00:12:47,760 --> 00:12:51,400 Speaker 2: you're not necessarily entirely wedded to the United States. Just 239 00:12:51,480 --> 00:12:53,959 Speaker 2: because the most AI has been built not that far 240 00:12:54,000 --> 00:12:56,880 Speaker 2: from here, maybe thirty miles from here, just outside of Washington, 241 00:12:57,440 --> 00:12:59,880 Speaker 2: doesn't mean that every next AI data center has to 242 00:12:59,880 --> 00:13:03,640 Speaker 2: be here. To some large degree. AI is some the servers, 243 00:13:03,679 --> 00:13:05,720 Speaker 2: not all, to be clear, there's different types of servers, 244 00:13:05,720 --> 00:13:08,800 Speaker 2: and that's not my area of expertise, but some can 245 00:13:08,840 --> 00:13:11,520 Speaker 2: really be anywhere in the world, and so they will 246 00:13:11,600 --> 00:13:16,199 Speaker 2: go where the price of electricity is most affordable and reliable, 247 00:13:16,280 --> 00:13:19,880 Speaker 2: and there are other options. Brazil is about seventy eighty 248 00:13:19,920 --> 00:13:23,680 Speaker 2: percent hydropower low cost. They've been trying very much to 249 00:13:23,720 --> 00:13:27,920 Speaker 2: market Brazil as an AI place. Gulf States have enormous 250 00:13:27,960 --> 00:13:30,800 Speaker 2: amounts of sun, very cheap solar, They don't put big 251 00:13:30,840 --> 00:13:34,199 Speaker 2: tariff sun solar equipment like we do, can build batteries 252 00:13:34,240 --> 00:13:36,120 Speaker 2: to go along with it. They are certainly trying to 253 00:13:36,160 --> 00:13:39,200 Speaker 2: market themselves as hubs for AI as well. So no 254 00:13:39,320 --> 00:13:42,440 Speaker 2: foregone conclusion that the United States will be the one 255 00:13:42,440 --> 00:13:45,040 Speaker 2: and only place where we build all this new capacity. 256 00:13:45,880 --> 00:13:49,560 Speaker 3: But as far as you're concerned, the only way that 257 00:13:49,800 --> 00:13:52,319 Speaker 3: this energy that we were expecting to come online, or 258 00:13:52,360 --> 00:13:54,360 Speaker 3: electricity that we were expecting to come online in the 259 00:13:54,440 --> 00:13:58,040 Speaker 3: US to meet this demand will actually come online is 260 00:13:58,080 --> 00:14:00,000 Speaker 3: through higher prices. 261 00:14:00,080 --> 00:14:02,280 Speaker 2: Seems inevitable. And I think one of the questions we're 262 00:14:02,320 --> 00:14:05,040 Speaker 2: just trying to parse out, given the incredible complexity of 263 00:14:05,040 --> 00:14:07,959 Speaker 2: what Congress has just done, is how many projects could 264 00:14:08,000 --> 00:14:10,640 Speaker 2: still qualify for the tax credit if they get under 265 00:14:10,640 --> 00:14:13,880 Speaker 2: construction basically yesterday, and how many of them will not. 266 00:14:14,160 --> 00:14:16,120 Speaker 2: And those that don't, obviously are going to have to 267 00:14:16,120 --> 00:14:18,880 Speaker 2: figure out some way to get compensated correctly so that 268 00:14:18,920 --> 00:14:21,600 Speaker 2: they can earn the return that they want. The best 269 00:14:21,640 --> 00:14:23,680 Speaker 2: guess at the moment is that if you get under 270 00:14:23,720 --> 00:14:27,000 Speaker 2: construction sometime in this calendar year, you'll probably be okay, 271 00:14:27,560 --> 00:14:30,320 Speaker 2: But the White House just created an additional uncertainty with 272 00:14:30,400 --> 00:14:31,400 Speaker 2: this executive order. 273 00:14:31,680 --> 00:14:34,640 Speaker 3: One estimate I saw is that the future clean energy 274 00:14:34,680 --> 00:14:38,680 Speaker 3: products that don't have these tax credits will cost fifty 275 00:14:38,720 --> 00:14:40,720 Speaker 3: percent more to get built. Do you think that's in 276 00:14:40,760 --> 00:14:41,560 Speaker 3: the right ball part? 277 00:14:42,240 --> 00:14:43,960 Speaker 2: That feels a little on the high side of me, 278 00:14:44,000 --> 00:14:47,160 Speaker 2: But we need to do the analysis ourselves. I think historically, 279 00:14:47,400 --> 00:14:49,760 Speaker 2: if you look around the world, the history of clean 280 00:14:49,840 --> 00:14:51,960 Speaker 2: energy is you have a number of countries that have 281 00:14:52,000 --> 00:14:54,360 Speaker 2: put in place very generous supports in the form of 282 00:14:54,360 --> 00:14:56,560 Speaker 2: feed in tariffs like we've seen in countries in Europe 283 00:14:56,560 --> 00:15:00,360 Speaker 2: and elsewhere, and when they disappear, it's terrible news for 284 00:15:00,400 --> 00:15:02,960 Speaker 2: the industry. But we also find that the industry is 285 00:15:03,000 --> 00:15:06,760 Speaker 2: incredibly innovative about finding ways to reduce costs. The US 286 00:15:06,880 --> 00:15:10,200 Speaker 2: is really not a low cost market when it comes 287 00:15:10,240 --> 00:15:13,440 Speaker 2: to putting solar on people's jews in particular, but also 288 00:15:13,520 --> 00:15:17,200 Speaker 2: large scale projects. So there's definitely some room for cost reduction, 289 00:15:17,280 --> 00:15:19,760 Speaker 2: I think, for the industry overall. But there's no question 290 00:15:19,880 --> 00:15:21,600 Speaker 2: this is going to boost costs. In the case of 291 00:15:21,640 --> 00:15:24,800 Speaker 2: a typical solar project. The tax credit is thirty percent 292 00:15:24,840 --> 00:15:27,760 Speaker 2: of CAPEX, So a billion dollar project, three hundred million 293 00:15:27,880 --> 00:15:31,200 Speaker 2: right off the top was basically disappearing because of tax credits. 294 00:15:31,640 --> 00:15:32,960 Speaker 2: That has to be dealt with somehow. 295 00:15:33,440 --> 00:15:36,040 Speaker 3: And I've seen the Energy Innovation Thing Tank from what 296 00:15:36,080 --> 00:15:38,000 Speaker 3: you're saying, suggests that maybe it'd be a little bit 297 00:15:38,000 --> 00:15:40,160 Speaker 3: on the high side, but their estimate of the impact 298 00:15:40,240 --> 00:15:43,800 Speaker 3: on bills would be that the average energy bill by 299 00:15:43,840 --> 00:15:47,200 Speaker 3: twenty thirty five could be nearly five hundred dollars higher 300 00:15:47,200 --> 00:15:51,880 Speaker 3: in Michigan, similar maybe more in Maryland, and six or 301 00:15:51,920 --> 00:15:54,360 Speaker 3: seven hundred eight hundred dollars higher in Texas than it 302 00:15:54,360 --> 00:15:55,760 Speaker 3: would have been if the credits had remained. 303 00:15:55,840 --> 00:15:57,400 Speaker 2: Yeah, I can't, I won't. I guess I want to 304 00:15:57,400 --> 00:15:59,920 Speaker 2: dispute that we haven't done that analysis ourselves. I've seen 305 00:16:00,000 --> 00:16:02,680 Speaker 2: different numbers from other research firms as well. There's no question, 306 00:16:02,720 --> 00:16:06,280 Speaker 2: particularly in a market like Texas, which is really deregulated 307 00:16:06,280 --> 00:16:08,640 Speaker 2: and where pricing can get passed along directly to large 308 00:16:08,680 --> 00:16:11,160 Speaker 2: scale consumers, there's no question this is going to have 309 00:16:11,240 --> 00:16:14,440 Speaker 2: a real impact. Ultimately. I think the interesting question is 310 00:16:14,440 --> 00:16:16,320 Speaker 2: what about businesses. I mean, we talk a lot about 311 00:16:16,360 --> 00:16:18,760 Speaker 2: retail consumers, and eventually they are the ones who get hit, 312 00:16:18,960 --> 00:16:22,000 Speaker 2: but more immediately, and often cases it's wholesale purchases of 313 00:16:22,040 --> 00:16:24,480 Speaker 2: electricity that feel the effects. And that is one of 314 00:16:24,520 --> 00:16:27,640 Speaker 2: the puzzling things why in this debate where the utility 315 00:16:27,720 --> 00:16:29,960 Speaker 2: is not more engaged in this because ultimately they're the 316 00:16:30,000 --> 00:16:31,560 Speaker 2: ones who are going to get bigger bills that they're 317 00:16:31,600 --> 00:16:34,080 Speaker 2: going to have to pass along to their consumers. Or 318 00:16:34,120 --> 00:16:36,080 Speaker 2: where were the manufacturers who are going to have to 319 00:16:36,120 --> 00:16:38,760 Speaker 2: pay higher prices for electricity than they would if you're 320 00:16:38,800 --> 00:16:42,880 Speaker 2: in the say Ercot market or PJM. I'm puzzled as 321 00:16:42,880 --> 00:16:45,440 Speaker 2: to why there wasn't a more engaged conversation around this, 322 00:16:45,880 --> 00:16:46,360 Speaker 2: and you're. 323 00:16:46,240 --> 00:16:48,480 Speaker 3: Readly my mind, even because I was thinking about your title, 324 00:16:48,520 --> 00:16:50,320 Speaker 3: Emily and the fact that you are a reporter of 325 00:16:50,360 --> 00:16:53,120 Speaker 3: focusing on corporate lobbying and influence. You know, people have 326 00:16:53,200 --> 00:16:56,680 Speaker 3: focused on the impact and the influence of the fossil 327 00:16:56,720 --> 00:16:59,760 Speaker 3: fuel lobby in driving part of this bill, and we 328 00:16:59,840 --> 00:17:02,880 Speaker 3: know that there's some parts of that industry that have 329 00:17:03,120 --> 00:17:05,639 Speaker 3: been big donors to Donald Trump. But there were awful 330 00:17:05,640 --> 00:17:07,280 Speaker 3: a lot of people on the other side of the argument, 331 00:17:07,280 --> 00:17:11,960 Speaker 3: including as Ethan mentions, there's the utilities and sectors that 332 00:17:12,040 --> 00:17:14,679 Speaker 3: would really be hurt by this, not to mention the 333 00:17:14,720 --> 00:17:18,360 Speaker 3: tech firms who are lobbying to get more cheap electricity. 334 00:17:18,600 --> 00:17:22,080 Speaker 3: So why is it those voices just weren't heard in 335 00:17:22,080 --> 00:17:22,960 Speaker 3: the last few weeks. 336 00:17:23,600 --> 00:17:29,560 Speaker 5: Ultimately, the reason this bill goes so aggressively against clean 337 00:17:29,720 --> 00:17:35,320 Speaker 5: energy is because of House Speaker Mike Johnson's math issue, 338 00:17:35,640 --> 00:17:38,600 Speaker 5: which was that he could only stand to lose a 339 00:17:38,800 --> 00:17:43,600 Speaker 5: very small number of Republican votes, and so that made 340 00:17:44,040 --> 00:17:47,720 Speaker 5: the House Freedom Caucus, the group of hardline conservatives in 341 00:17:47,760 --> 00:17:51,920 Speaker 5: the House, that made them very powerful in this conversation, 342 00:17:52,680 --> 00:17:55,680 Speaker 5: and a lot of them, for the most part, really 343 00:17:55,760 --> 00:17:59,879 Speaker 5: leaned towards the oil and gas industry. So thinking about 344 00:18:00,040 --> 00:18:04,560 Speaker 5: Hip Roy from Texas, he was one of the most 345 00:18:04,560 --> 00:18:07,680 Speaker 5: consistent voices saying we really need to phase out these 346 00:18:07,680 --> 00:18:13,239 Speaker 5: subsidies very quickly. He was in communication very closely with 347 00:18:13,600 --> 00:18:18,840 Speaker 5: a conservative activist named Alex Epstein who actually shaped a 348 00:18:18,880 --> 00:18:22,639 Speaker 5: lot of this debate behind the scenes. And basically alex 349 00:18:22,680 --> 00:18:28,600 Speaker 5: Epstein's arguments are in favor of natural gas. He says 350 00:18:28,720 --> 00:18:33,359 Speaker 5: that solar and wind are unreliable sources of energy. You know, 351 00:18:33,400 --> 00:18:36,280 Speaker 5: I'll let you debunk some of what he has to say, 352 00:18:36,320 --> 00:18:41,320 Speaker 5: but essentially that the subsidies artificially lowered the cost of 353 00:18:41,640 --> 00:18:45,840 Speaker 5: electricity and we're creating inflation. So there is a lot 354 00:18:45,840 --> 00:18:50,360 Speaker 5: of arguments behind the scenes against the clean energy industry, 355 00:18:50,440 --> 00:18:53,680 Speaker 5: and ultimately I think oil and gas just really won 356 00:18:54,000 --> 00:18:56,520 Speaker 5: in this bill to subsidized too. 357 00:18:56,760 --> 00:18:59,359 Speaker 3: Yeah. I was going to say, there's a hell of 358 00:18:59,359 --> 00:19:02,520 Speaker 3: a little substance on that side, but somehow they need 359 00:19:02,560 --> 00:19:05,920 Speaker 3: some to do, but the clean energy doesn't. I mean, 360 00:19:06,320 --> 00:19:08,280 Speaker 3: even Texas is a surprise, right, I mean that was 361 00:19:08,320 --> 00:19:11,040 Speaker 3: one of the things that we said after Donald Trump 362 00:19:11,119 --> 00:19:13,360 Speaker 3: won the election, and there was obviously this question mark 363 00:19:13,400 --> 00:19:15,560 Speaker 3: about where would he go on, and there was some 364 00:19:15,600 --> 00:19:18,520 Speaker 3: pushback initially on the idea that he would completely repeal 365 00:19:18,560 --> 00:19:22,800 Speaker 3: the IRA the Biden era tax credits, in part because 366 00:19:22,840 --> 00:19:26,200 Speaker 3: of the support from the tech industry, but also because 367 00:19:26,240 --> 00:19:30,119 Speaker 3: it was noticed that, partly because it's easier to build 368 00:19:30,160 --> 00:19:33,159 Speaker 3: stuff in the red states, that there were a lot 369 00:19:33,160 --> 00:19:37,600 Speaker 3: of Republican states that had actually benefited enormously from the RA, 370 00:19:37,800 --> 00:19:41,720 Speaker 3: including Texas. I think most of its new electricity supply 371 00:19:41,800 --> 00:19:45,199 Speaker 3: had come from renewables in the last couple of years. 372 00:19:45,520 --> 00:19:48,359 Speaker 3: So it's interesting that the representative from Texas just doesn't 373 00:19:48,359 --> 00:19:50,600 Speaker 3: seem to factor that in. 374 00:19:51,400 --> 00:19:55,399 Speaker 5: Yeah, it just became such a political talking point, calling 375 00:19:55,440 --> 00:20:00,560 Speaker 5: the IRA the Green new Scam, making it democrat led 376 00:20:00,800 --> 00:20:07,320 Speaker 5: project essentially that Republicans had to completely nix and create 377 00:20:07,400 --> 00:20:10,960 Speaker 5: their own path forward when it comes to energy, And 378 00:20:11,200 --> 00:20:14,800 Speaker 5: an interesting element of the bill is that it's a 379 00:20:14,800 --> 00:20:18,560 Speaker 5: lot less aggressive when it comes to nuclear energy, which 380 00:20:18,600 --> 00:20:21,280 Speaker 5: is an area that I know that tech companies have 381 00:20:21,359 --> 00:20:25,120 Speaker 5: been investing a lot into. Obviously, that's a lot slower 382 00:20:25,200 --> 00:20:29,080 Speaker 5: moving and it doesn't address the immediate energy needs of 383 00:20:29,359 --> 00:20:33,719 Speaker 5: data centers. But the nuclear energy industry came out with 384 00:20:33,880 --> 00:20:37,359 Speaker 5: far less battle scars than some other parts of the industry, 385 00:20:37,400 --> 00:20:39,800 Speaker 5: and that's a part of this conversation too, is sort 386 00:20:39,800 --> 00:20:42,080 Speaker 5: of like weighing things in favor of certain kinds of 387 00:20:42,200 --> 00:20:43,240 Speaker 5: energy over others. 388 00:20:43,520 --> 00:20:48,520 Speaker 3: There was again much conversation about the political fallout from 389 00:20:48,600 --> 00:20:51,119 Speaker 3: this bill. You know, over the last few weeks people 390 00:20:51,119 --> 00:20:54,840 Speaker 3: have wondered whether the Republicans already kind of ready for 391 00:20:54,920 --> 00:20:58,880 Speaker 3: what happens in their constituencies when the impact of Medicaid 392 00:20:58,960 --> 00:21:01,960 Speaker 3: cuts and others comes through. But you would think if 393 00:21:01,960 --> 00:21:05,320 Speaker 3: there's a short term big increase in energy prices and 394 00:21:05,359 --> 00:21:09,640 Speaker 3: that hits people's utility bills. They're electricity bills. Is there 395 00:21:09,680 --> 00:21:12,159 Speaker 3: not a fear on the Hill the finger will be 396 00:21:12,200 --> 00:21:14,879 Speaker 3: pointed to this bill when it comes to that. I mean, 397 00:21:14,880 --> 00:21:17,040 Speaker 3: it's cost of living is such a big element of 398 00:21:17,080 --> 00:21:21,080 Speaker 3: the Trump pledge, the promise if you like to voters, 399 00:21:21,480 --> 00:21:23,920 Speaker 3: do they just think they'll be able to blame other stuff? Yeah? 400 00:21:23,960 --> 00:21:25,679 Speaker 5: I think part of the sleight of hand is that 401 00:21:25,760 --> 00:21:29,040 Speaker 5: tax cuts are coming in more immediately than some of 402 00:21:29,119 --> 00:21:34,199 Speaker 5: the spending cuts, So meaning in the more immediate term, 403 00:21:34,359 --> 00:21:38,920 Speaker 5: some people are going to see their taxes decrease, whereas 404 00:21:39,280 --> 00:21:43,640 Speaker 5: some of the potential added cost to electricity bills or 405 00:21:44,320 --> 00:21:48,720 Speaker 5: some of the loss of Medicaid coverage comes farther down 406 00:21:48,800 --> 00:21:52,119 Speaker 5: the line. So it is a lot about timelines as well. 407 00:21:52,320 --> 00:21:55,960 Speaker 5: They've written it in a way that at least Republicans 408 00:21:56,000 --> 00:21:59,720 Speaker 5: hope that people don't see the more negative effects until 409 00:21:59,720 --> 00:22:01,600 Speaker 5: after the midterms in twenty twenty eight. 410 00:22:01,680 --> 00:22:03,280 Speaker 2: If I could jump in, I think you're also maybe 411 00:22:03,280 --> 00:22:07,159 Speaker 2: ascribing a much higher level of sophistication to this conversation. 412 00:22:07,280 --> 00:22:09,800 Speaker 2: Then probably actually went on, I don't know that people 413 00:22:09,800 --> 00:22:14,320 Speaker 2: on the Hill understand the economics of power generation at 414 00:22:14,359 --> 00:22:16,560 Speaker 2: the moment, and the fact that renewables are the most 415 00:22:16,560 --> 00:22:18,760 Speaker 2: cost competitive, and the fact that it's impossible to get 416 00:22:18,800 --> 00:22:21,440 Speaker 2: your hands on a natural gas turbine. These are things 417 00:22:21,440 --> 00:22:23,520 Speaker 2: that only nerds like me know, So I don't know 418 00:22:23,560 --> 00:22:25,320 Speaker 2: that stuff that they're kind of across. 419 00:22:25,480 --> 00:22:29,080 Speaker 3: Would their argument be, yeah, it's hard under Biden to 420 00:22:29,119 --> 00:22:31,520 Speaker 3: get this stuff built, but we're going to lift all 421 00:22:31,520 --> 00:22:34,560 Speaker 3: of these stupid restrictions, and so that natural gas power 422 00:22:34,560 --> 00:22:36,640 Speaker 3: station could could go up in a year or so. 423 00:22:36,720 --> 00:22:38,760 Speaker 2: That just I mean, again, hard to not get in 424 00:22:38,760 --> 00:22:41,160 Speaker 2: the rabbit hole here. But if there's three or four 425 00:22:41,160 --> 00:22:44,560 Speaker 2: companies that make these, we're talking large scale turbines. These 426 00:22:44,560 --> 00:22:47,679 Speaker 2: are big things, specialized manufacturing that goes into them. If 427 00:22:47,680 --> 00:22:49,280 Speaker 2: you're one of the three or four companies in the 428 00:22:49,280 --> 00:22:51,840 Speaker 2: world that makes them, and you are selling them at 429 00:22:51,840 --> 00:22:53,520 Speaker 2: a very high price at the moment, and you have 430 00:22:53,560 --> 00:22:56,359 Speaker 2: a back order, I guess the question is do you 431 00:22:56,440 --> 00:23:00,320 Speaker 2: ramp up your manufacturing of those turbines. If you do, 432 00:23:00,400 --> 00:23:01,840 Speaker 2: how long is it going to take you to ramp 433 00:23:01,880 --> 00:23:03,960 Speaker 2: that up? At least a couple of years at the 434 00:23:04,080 --> 00:23:05,760 Speaker 2: very very least, and then a few more years at 435 00:23:05,840 --> 00:23:08,080 Speaker 2: least before you can get some more turbines out. And 436 00:23:08,119 --> 00:23:09,959 Speaker 2: if you're one of those companies. And you're looking at 437 00:23:09,960 --> 00:23:12,679 Speaker 2: the US situation, the political situation here, I think you 438 00:23:12,760 --> 00:23:15,119 Speaker 2: might very well ask yourself, well, is this the new 439 00:23:15,160 --> 00:23:16,680 Speaker 2: world we're living in or are we going to see 440 00:23:16,720 --> 00:23:18,639 Speaker 2: some flip back in two or three years back to 441 00:23:18,720 --> 00:23:23,080 Speaker 2: renewables and suddenly I've got more gas turbine capacity, manufacturing 442 00:23:23,080 --> 00:23:25,000 Speaker 2: capacity than I know what to do with. I'd be 443 00:23:25,080 --> 00:23:27,560 Speaker 2: very surprised if there's big investment. But keep an eye 444 00:23:27,560 --> 00:23:29,560 Speaker 2: on GE and some of the others to see whether 445 00:23:29,600 --> 00:23:30,800 Speaker 2: they make announcements around that. 446 00:23:31,080 --> 00:23:32,439 Speaker 3: I mean, it is true when you say is that 447 00:23:32,440 --> 00:23:34,040 Speaker 3: the world we're living in? I mean it's pretty clear 448 00:23:34,080 --> 00:23:36,560 Speaker 3: that the world we're living in looks very different, looks 449 00:23:36,600 --> 00:23:40,680 Speaker 3: more like the ira world. As you noted, there's lots 450 00:23:40,680 --> 00:23:45,440 Speaker 3: of countries that have got strong incentives in place for renewables, 451 00:23:45,480 --> 00:23:50,800 Speaker 3: and we also see developing countries moving to electrify large 452 00:23:50,840 --> 00:23:54,160 Speaker 3: parts of their grid because it is it's certainly cheaper 453 00:23:54,160 --> 00:23:57,320 Speaker 3: for them if they're reliant otherwise on imported oil and gas. 454 00:23:57,440 --> 00:23:57,640 Speaker 1: Yeah. 455 00:23:57,760 --> 00:23:59,800 Speaker 2: No, I think you raise a very good question. Is 456 00:23:59,840 --> 00:24:02,720 Speaker 2: now the death of the US renewable energy industry in 457 00:24:02,760 --> 00:24:05,800 Speaker 2: the United States by any means because of the advancements 458 00:24:05,840 --> 00:24:08,680 Speaker 2: that we've seen, but it is a major setback, and 459 00:24:08,880 --> 00:24:11,240 Speaker 2: most importantly maybe at the bottom line, as it means 460 00:24:11,280 --> 00:24:14,800 Speaker 2: our chances of coming anywhere close to reducing our CO 461 00:24:14,960 --> 00:24:17,400 Speaker 2: two missions in line with address and climate change are 462 00:24:17,560 --> 00:24:19,240 Speaker 2: effectively over at the moment. 463 00:24:19,720 --> 00:24:22,240 Speaker 3: I guess there's one argument, which if it's so unstoppable, 464 00:24:22,320 --> 00:24:25,119 Speaker 3: we've had this period where we've ramped up production with 465 00:24:25,240 --> 00:24:28,919 Speaker 3: these massive credits, which were extremely expensive. They blew at 466 00:24:29,040 --> 00:24:32,639 Speaker 3: least a trillion dollar hole in the deficit, And of 467 00:24:32,640 --> 00:24:34,359 Speaker 3: course we can say there are other things that are 468 00:24:34,359 --> 00:24:36,160 Speaker 3: now going to blow a hole in the deficit over 469 00:24:36,200 --> 00:24:38,800 Speaker 3: the coming years thanks to the last week's bill, But 470 00:24:39,520 --> 00:24:41,359 Speaker 3: there is an argument that says it ought to be 471 00:24:41,359 --> 00:24:42,840 Speaker 3: able to stand on its own two feet. 472 00:24:43,520 --> 00:24:45,720 Speaker 2: Well, two things. The clean energy credits did not on 473 00:24:45,760 --> 00:24:47,640 Speaker 2: their own blow a trillion dollar hole in the deficit. 474 00:24:47,880 --> 00:24:50,439 Speaker 2: They were projected potentially to have done so, but of 475 00:24:50,440 --> 00:24:52,720 Speaker 2: course now we're living in a different world where they 476 00:24:52,760 --> 00:24:55,200 Speaker 2: certainly are not going to cost as much as was projected. 477 00:24:55,600 --> 00:24:57,760 Speaker 2: And even that number I would take a little issue 478 00:24:57,760 --> 00:25:00,280 Speaker 2: with because it made certain assumptions about hydrogen and other 479 00:25:00,320 --> 00:25:03,080 Speaker 2: things that haven't really come to pass. But you're right, 480 00:25:03,080 --> 00:25:04,600 Speaker 2: there were living in a new world in which these 481 00:25:04,600 --> 00:25:07,200 Speaker 2: industry is going to have to compete without the benefit 482 00:25:07,200 --> 00:25:10,320 Speaker 2: of tax credits. Unfortunately, it's going to compete against, you know, 483 00:25:10,400 --> 00:25:13,520 Speaker 2: some existing sources of generation that have been subsidized for 484 00:25:13,520 --> 00:25:16,119 Speaker 2: a very long time. And of course the administration is 485 00:25:16,160 --> 00:25:18,600 Speaker 2: also going to try and take steps whatever they can 486 00:25:18,720 --> 00:25:22,159 Speaker 2: to try and make existing coal fire generation more cost competitive, 487 00:25:22,400 --> 00:25:24,400 Speaker 2: although it's very unclear to me like what they can 488 00:25:24,480 --> 00:25:27,240 Speaker 2: actually do that changes the economics of coal. 489 00:25:27,320 --> 00:25:29,199 Speaker 3: I was going to ask you that, actually that's the 490 00:25:29,240 --> 00:25:32,000 Speaker 3: thing that Donald Trump has held out. You know, yes, 491 00:25:32,040 --> 00:25:35,480 Speaker 3: it's hard to build a new gas power station, but 492 00:25:36,040 --> 00:25:39,320 Speaker 3: if you have a coal powered station that you were 493 00:25:39,359 --> 00:25:41,720 Speaker 3: about to close down, or you've maybe just closed down, 494 00:25:41,840 --> 00:25:43,399 Speaker 3: how hard is it just to turn that back on, 495 00:25:43,520 --> 00:25:45,280 Speaker 3: and how hard is it to get the minds up 496 00:25:45,320 --> 00:25:46,760 Speaker 3: and running again, which is what he's. 497 00:25:46,600 --> 00:25:49,920 Speaker 2: Talked about hard is the short answer. You can issue 498 00:25:49,960 --> 00:25:53,440 Speaker 2: executive orders to try and order certain plants to keep online, 499 00:25:53,720 --> 00:25:56,760 Speaker 2: but the reality is that coal is not economically competitive 500 00:25:56,800 --> 00:25:58,919 Speaker 2: for the most part in the United States, particularly with 501 00:25:59,000 --> 00:26:02,080 Speaker 2: gas but also with so you can try and force 502 00:26:02,240 --> 00:26:04,520 Speaker 2: operators to keep running plants, but no one, I'm not 503 00:26:04,560 --> 00:26:06,280 Speaker 2: a lawyer here, but I think it's tough to force 504 00:26:06,280 --> 00:26:08,880 Speaker 2: people to lose money on every megawatt hour of electricity 505 00:26:08,920 --> 00:26:11,240 Speaker 2: that they produce, because you're trying to make a point 506 00:26:11,560 --> 00:26:13,760 Speaker 2: about what you think the world should look like in 507 00:26:13,800 --> 00:26:17,040 Speaker 2: terms of energy consumption that looks something like nineteen eighty seven. 508 00:26:18,040 --> 00:26:20,119 Speaker 3: It is extraordinary to me as someone who kind of 509 00:26:20,119 --> 00:26:23,360 Speaker 3: grew up with Margaret Thatcher's defining battle in the nineteen 510 00:26:23,440 --> 00:26:28,640 Speaker 3: eighties against the uneconomic coal producing mines in the UK, 511 00:26:29,000 --> 00:26:32,760 Speaker 3: and there was obviously enormous controversy ever trying to shut 512 00:26:32,760 --> 00:26:34,919 Speaker 3: them down, But to have a republic administration trying to 513 00:26:34,960 --> 00:26:38,520 Speaker 3: reopen a lot of uneconomic coal mines is an interesting site. 514 00:26:38,560 --> 00:26:40,239 Speaker 2: I mean, the question is just is there money to 515 00:26:40,280 --> 00:26:43,000 Speaker 2: do this right? Ultimately, if you want to mobilize private 516 00:26:43,040 --> 00:26:45,840 Speaker 2: capital to go out and do that, then that money 517 00:26:45,840 --> 00:26:48,040 Speaker 2: has to believe that this is the world that we're 518 00:26:48,040 --> 00:26:49,680 Speaker 2: going to live in for the next five or ten 519 00:26:49,760 --> 00:26:53,400 Speaker 2: or twenty years. And I think most investors look at 520 00:26:53,400 --> 00:26:57,119 Speaker 2: this and say, Okay, certainly, this is a certainly regressive 521 00:26:57,119 --> 00:26:59,360 Speaker 2: period that we're living through, But the end of the day, 522 00:26:59,400 --> 00:27:02,280 Speaker 2: climate change isn't going anywhere. It's only going to get worse. 523 00:27:02,640 --> 00:27:05,240 Speaker 2: And so if you believe there's an inevitability that eventually 524 00:27:05,280 --> 00:27:07,840 Speaker 2: policy makers, whether they deal with climate change in the 525 00:27:07,840 --> 00:27:10,239 Speaker 2: short run of the long run, they eventually deal with it. 526 00:27:10,680 --> 00:27:12,960 Speaker 2: I think many people would find it very hard to 527 00:27:13,000 --> 00:27:15,120 Speaker 2: swallow the idea of making a ten or twenty year 528 00:27:15,160 --> 00:27:17,480 Speaker 2: investment in a new coal mine. 529 00:27:17,760 --> 00:27:20,520 Speaker 3: But Emily, it seems like there'd be plenty of appetite 530 00:27:20,640 --> 00:27:21,480 Speaker 3: on the Hill for that. 531 00:27:22,640 --> 00:27:26,479 Speaker 5: Yes, I think there will be. I think this bill 532 00:27:26,680 --> 00:27:30,879 Speaker 5: got held up in the House for just a couple 533 00:27:30,920 --> 00:27:36,159 Speaker 5: of days after leaving the Senate because this group of 534 00:27:36,359 --> 00:27:41,840 Speaker 5: Republicans said, we want to go harder against clean energy, 535 00:27:42,400 --> 00:27:46,440 Speaker 5: we want more favorable terms for oil and gas, and 536 00:27:47,480 --> 00:27:51,320 Speaker 5: they spent hours and hours in the White House at 537 00:27:51,359 --> 00:27:55,479 Speaker 5: the eleventh hour trying to extract as many concessions from 538 00:27:55,560 --> 00:27:58,760 Speaker 5: the administration on this as they possibly could. And I 539 00:27:58,880 --> 00:28:02,120 Speaker 5: think that is out that bore out yesterday in terms 540 00:28:02,160 --> 00:28:06,520 Speaker 5: of this executive order, and we're going to continue to 541 00:28:06,560 --> 00:28:10,280 Speaker 5: see the deals that were made, the agreements that they 542 00:28:10,359 --> 00:28:15,200 Speaker 5: hashed out recreating the energy landscape in their image. 543 00:28:15,520 --> 00:28:18,479 Speaker 3: So, as Ethan appointedly made clear, this is the end 544 00:28:18,480 --> 00:28:22,280 Speaker 3: of the story for any expectation that the US would 545 00:28:22,320 --> 00:28:25,679 Speaker 3: meet its climate change obligations, but apparently not the end 546 00:28:25,720 --> 00:28:28,440 Speaker 3: of the story when it comes to the assault on renewables. 547 00:28:28,480 --> 00:28:30,120 Speaker 3: Emily Ethan, thank you so. 548 00:28:30,160 --> 00:28:31,200 Speaker 2: Much, Thank you. 549 00:28:36,720 --> 00:28:38,840 Speaker 3: Thanks for listening to trump Andomics from Bloomberg. It was 550 00:28:38,840 --> 00:28:41,560 Speaker 3: hosted by me Stephanie Flanders I was joined by Bloomberg 551 00:28:41,600 --> 00:28:46,480 Speaker 3: reporter Emily Bernbaum and Bloomberg ne ef Ethan Zindler. Trump 552 00:28:46,520 --> 00:28:49,680 Speaker 3: Andomics is produced by Summer Sadi and Moses Andam with 553 00:28:49,800 --> 00:28:52,920 Speaker 3: help from Amy Keene and special thanks this week to 554 00:28:53,080 --> 00:28:57,080 Speaker 3: Rachel Lewis Chrisky. Sound design is by Blake Maples and 555 00:28:57,160 --> 00:29:02,560 Speaker 3: Sage Bowman is the head of Bloomberg Podcasts and Please 556 00:29:02,800 --> 00:29:04,960 Speaker 3: to help others find this show, please rate it and 557 00:29:05,080 --> 00:29:07,000 Speaker 3: review it highly wherever you listen.