Trump threatens the IRA

Good morning. Do you think virtual power plants can become a reliable and cheap alternative to physical ones? As utilities experiment, the Energy Central community is debating whether VPPs can hold up at commercial scale. One user said it’s beneficial if the price stays near $2 per kWh, while another says it’s a “near-term financial scheme to line the pockets of energy traders.” What do you think? I’d love to hear your POV.

— Reagin von Lehe, Energy Central Newsletter Writer

Trump Threatens IRA Funds as Biden Scrambles to Spend

Former President (and current candidate) Donald Trump pledged last week to terminate President Joe Biden’s Green New Deal. Now, the fate of existing Inflation Reduction Act programs and its remaining $11.7 million in funding is up in the air.

Here’s a breakdown of Trump’s proposed plans →

• Trump said during a speech at an economic club on Thursday that, should he win the election, he’d rescind all “unspent” funds under the IRA (he didn’t specify which IRA programs he’d target, but a former trade advisor suggested during a Committee Hearing on US-China Economic Competition that some of the law’s provisions that support US factories could be safe).

• Trump also outlined a plan to establish a new federal efficiency commission, potentially led by Elon Musk.

• Trump said his administration would focus on domestic manufacturing (the “how” wasn’t mentioned during his speech, but this is something the IRA has already done through tariffs and incentives like tax credits).

Trump’s threats on IRA funding have the current administration scrambling to get money out the door. Let’s run the numbers on the IRA spending since Trump made his public threats →

• The Biden administration announced a commitment of $73 billion for rural electric cooperatives and committed $300 million from the EPA toward greenhouse gas emission reductions in tribal communities.

• The EPA committed $232 million in grant funding to cleaning up brownfield sites.

• The DOE announced a $23 million program for AI and energy efficiency computing research.

• The DOE also welcomed 25 new remote communities to the Energy Transitions Initiative Partnership Project.

Utility POV: This dual story draws into focus just how much is at stake for the energy industry in the upcoming election. 

• Some Energy Central community members believe Trump’s win could benefit some big oil and gas producing utilities.

• Others have suggested a Harris victory would be a promising win for US climate policy, but a few members have mixed feelings about how the IRA might sustain domestic manufacturing.

Looking ahead: Trump assured voters his plan would cut energy prices in half, if not more, within his first year and said that oil production would be 4x higher, but experts have said that’s doubtful. A Trump administration could also upend energy tax benefits for low income communities, including rural areas in red states.

Stats to Know: Storage, Solar, and Oil Prices

Here’s a quick rundown of the top three energy stats to know this week →

Storage had its second-best quarter ever, led by California, according to a Q2 market report by the American Clean Power Association. The national grid added  2.9 GW of capacity, a 62% jump from the same time last year. Utility-scale storage has been the leading sector since 2021, with the most growth from last year as well.

The US solar industry added 9.4 GW of capacity, led by Texas, according to a Solar Energy Industries Association report. The utility-scale market installed 7.6 GW in this year’s second quarter, up 59% annually but down 23% from the quarter before. What do experts say is to blame for the quarterly drop-off? 2023 delays—stalled projects finally turned on in the first part of this year.

US gas prices hit their lowest since December 2021 as we enter a low-demand season. October futures settled at $1.98 per gallon last week, which is almost 6% lower than the national benchmark. Crude oil production is generally taking a hit, falling by almost 7 million barrels last month, according to the Energy Information Administration.

NJ Creates a Solar Program for Low-Income Communities

New Jersey launched a $156 million Solar for All program last week to benefit low-income communities. The initiative is projected to save residents $250 million on energy bills over 30 years.

Zoom out: Solar For All programs were created through the IRA to allow residents to subscribe to solar and receive credits on utility bills. The US Environmental Protection Agency's $7 billion Greenhouse Gas Reduction Fund has also opened Solar for All programs in other states including New Hampshire, Massachusetts, and Rhode Island.

Why is NJ all in on community solar? The New Jersey Board of Public Utilities approved rate hikes of up to 13% for Atlantic City Electric customers last month. Community solar has historically eased the hit of high utility bills on residents, and Solar For All can prevent community solar projects from falling into states of limbo.

The New Jersey solar market ranks 10th in the nation on net-metering laws favorable for DG development, according to SEIA. This growth could be attributed to community solar capacity expansion.

The EC Wire

• California is leading a hydrogen EV movement.

• PJM might stop including energy efficiency resources in its next capacity auction.

• The EPA has issued drafts for three Texas carbon capture wells.

• Nasdaq will gain access to energy finance company Crux's platform of manufacturers and developers to purchase transferable tax credits.

• The DOE is seeking feedback on a draft roadmap to reform DER grid connection.