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November 22, 2016updated 05 Jan 2017 10:19am

The potential revival of fossil fuels under President Trump could spell disaster for green energy

By GlobalData Energy

The election of Donald Trump as the 45th president of the US is expected to have a significant impact on the power sector, specifically clean energy, climate, and the environment.

It is expected that, under his presidency, the country’s domestic energy policy may witness the reversal of a number of major environmental policies of outgoing president Barack Obama.

The US Production Tax Credit (PTC) and Investment Tax Credit (ITC) extension in December 2015 gave a boost to the wind and solar power sectors in the country. However, Trump’s victory puts into question the long-term federal tax extensions that will be available for US wind and solar installations.

This is apparent from the decline witnessed in the stock value of Vestas Wind Systems A/S, one of the world’s biggest wind turbine manufacturers, and a number of US solar companies, such as First Solar and SunPower Corporation, after the election results were announced. On the other hand, coal stocks have received a boost and their value has moved up.

Clean energy investors are worried that the new president will put renewable energy sources in jeopardy by moving away from outgoing president Obama’s Clean Power Plan and exiting from the Paris agreement, which was signed on April 22, 2016 and came into effect on November 4, 2016.

In contrast, Trump considered climate change as a hoax and showed his opposition toward environmental regulation during the election campaign, pledging to exit from the Paris climate change agreement and focus on boosting energy production from coal, oil, and natural gas.

President-elect Trump’s major agenda includes revoking the Clean Power Plan, Obama’s crucial intention toward reducing carbon emissions from coal- and gas-fired power plants.

In addition, Trump is looking at either breaking up the Environmental Protection Agency (EPA) or narrowing its role to primarily an advisory one and wants to redirect the EPA from its central mission of guaranteeing clean air and water for all its citizens.

There is no clear picture from Trump’s manifesto yet and, since he does not hold any record of public service, skepticism prevails about his policy enactments and their consequences on clean energy, climate, and the environment. With fossil fuel generation expected to revive under his presidency, renewable growth may face a slowdown, and how ITC and PTC extensions, environmental regulations, and climate change agreement will work out is something that remains to be seen.