With the elections done and dusted and Joe Biden firmly on the road to ascending to the Oval Office, the renewable energy sector is licking its chops at the prospects of better days under a much more supportive federal government.
Unfortunately, the fate of a Biden green deal still hangs in the balance with two outstanding runoff races in Georgia.
But that doesn’t automatically mean that Biden’s green ambitions are dead in the water. Even under a Republican-dominated Senate, Biden’s government can still undertake several executive actions and changes in personnel that will have a significant impact on the renewable energy sector, particularly the solar sector.
The solar sector has emerged as the best-performing corner of the clean energy universe during the pandemic and has continued to shine after Biden was declared president-elect. Here are 3 key reasons why solar stocks have been tipped to continue outperforming under Biden.
Eliminating solar tariffs
In January 2018, the Trump administration implemented Section 201 solar tariffs on imported cells and modules at the height of the trade war with China. A presidential proclamation released back in October seeks to increase those tariffs and eliminate an exemption for two-sided solar panels.
Though the evidence is mixed regarding their effectiveness, the cons seem to outweigh the pros. On one hand, the 2.5-gigawatt solar cell import cap did provide some support for the domestic solar module manufacturing industry and also helped to level the playing field.
But the harm done is by no means negligible. According to The Hill, the 2018 solar tariffs have significantly harmed the U.S. solar sector by destroying more than 62,000 jobs and nearly $19 billion in new private sector investments.
The tariffs, which began at 30% in 2018, made some imported panels more expensive, with the price of high-efficiency PERC (Passivated Emitter Rear Cell) modules nearly doubling in the United States compared to prices in other markets as the modules leave factories in China and Southeast Asia.
Indeed, Greentech Media estimates that when purchased in multi-megawatt quantities, such modules now cost 32 cents to 35 cents per watt in the U.S. compared to only 17 to 19 cents per watt when manufactured. The lion’s share of those extra costs can be directly chalked up to the Trump tariffs since shipping costs clock in at a much lower 1.5 cents to 2 cents per watt.
That the U.S. solar sector has continued to thrive in spite of—not because of—the tariffs is a true testament of how strong the solar momentum has grown. Indeed, module imports from China have been on a growth path since January 2019. That’s despite a combination of Section 201 tariffs, countervailing duties, and anti-dumping laws.
One of first pieces of business expected for Biden is to order the International Trade Commission to evaluate these tariffs and possibly repeal them considering the damage they have wrought to the downstream solar industry in this country. Even partly eliminating those punitive tariffs on solar modules and inverters is expected to have tremendous positive effects on solar development.
Eliminating fossil-fuel subsidies
For years, the fossil-fuel industries have enjoyed approximately $20 billion a year in both direct and indirect subsidies they receive from the government. Biden has already pledged to lower or completely eliminate those subsidies and channel the funds to renewables. This is very likely to give solar and other renewables an opportunity to play on a more level field with the oil, gas, and coal industries.
Solar and wind are already competitive with fossil fuels in many electricity generation markets. Eliminating or reduction of fossil fuel subsidies will only accelerate the shift to renewable energy.
Another stimulus package
With the U.S. economy recovering but still deep in the doldrums, it’s widely expected that the Biden administration will quickly approve another multi-trillion dollar relief package which, in addition to helping millions of struggling families, will help rebuild the country’s crumbling infrastructure, including clean energy.
Direct investments into the renewable sector would go a long way in helping create well-paying jobs in industries like solar and wind and also encourage these companies to invest in their employees.
Thousands of good jobs created in their jurisdictions might be enough to persuade more Congressmen to lend support to the green deal.
From an investor’s perspective, this could be a good jumping-in point before solar gets a new lease on life.
Kimani first published this article in the London-based Oilprice.com
NSCDC Parades Five Suspects Over 24,000 Litres Of AGO
The Nigeria Security and Civil Defence Corps (NSCDC) last Friday paraded five suspected oil thieves caught with over 24,000 litres of illegally refined Automotive Gasoline Oil (AGO) concealed in sack bags in Rivers State.
Rivers State Commandant of NSCDC, Michael Besong Ogar, while parading the suspects, reiterated that there was no room for illegal oil bunkering activities in Rivers State, warning that perpetrators would be smoked out of their hideouts.
Ogar said the newly-reconstituted anti-vandal team has made successes in the relentless war against vandalism of oil pipelines and illegal dealings in petroleum products through massive arrests and subsequent prosecution of cases in the court.
“The Commandant General, Ahmed Abubakar Audi, has promised that in a short while there would be a drastic reduction and possible eradication of illegal dealings in petroleum products across the nation
“Our major task is to massively arrest oil pipelines vandals and their sponsors as we take the Anti-vandalism war to the enemies’ domain.
“The nation is losing millions of dollars per barrel due to the increase in pipelines vandalism and illegal oil bunkering, but I can assure you that this menace would be a thing of the past because we are fully committed to the mandate of the Corps’ in safeguarding all critical national assets and infrastructures.
“The suspects will be charged for contravening the Anti-sabotage Act, the Petroleum Act and the Miscellaneous offences Act 2004, laws of the Federation.
“They are: Ifegbu Uche ‘m’ aged 42years, Obinna Ogbonna ‘M’ 42years, Emmanuel Smart ‘m’ 19 years, Lawrence Gibson ‘m’ 35years, and Emeka Desmond ‘m’ 35years, who were arrested while conveying about 24,000 litres of illegally refined AGO concealed in sack bags and carefully packed in a Toyota Sequoia with plate number AbujaGWA386GVA; a Volkswagen Bus with Registration Number: Lagos APP 831 XX, which was intercepted at Abuloma Community in Port Harcourt, a Truck DA1700 with number plate KadunaXE653KA impounded at Abonnema Wharf, and a Ford E- 250 intercepted in Etche respectfully.
“We also intercepted and impounded another short white Mercedes truck with unquantified litres of illegally refined AGO along Ozuoba-Rumuigbo axis in Obio/Akpor LGA, Port Harcourt Rivers State.
“We are very excited that the court has resumed session as the suspects would definitely have their time in Court while application for forfeitures of the products and mode of conveyance would be made and proceeds be remitted in the Federal Government coffers,” NSCDC said.
Eni Decries Production Loss From Bayelsa Gas Pipeline Explosion
Eni, the Italian parent company to the Nigerian Agip Oil Company (NAOC), has said the impact of the Ogboinbiri/OB-OB gas pipeline explosion on gas output was significant.
Production data from NAOC shows that the incident cut Agip’s gas exports by 5million standard cubic meters per day.
Media Relations Manager, in charge of African Operations at Eni, Mr Domenico Spins, said the gas leak has been brought under control.
Spins in a statement announced that the incident was caused by sabotage and third-party interference.
“Eni confirms that a third party’s interference hacksaw cut caused a gas leak at the Ogbainbiri-Ob/Ob gas pipeline.
“The line is depressurised and is currently being repaired. Production losses due to the shutdown are important,” Eni stated.
The Director-General of the National Oil Spills Detection and Response Agency (NOSDRA), Dr Idris Musa, who confirmed the pipeline blast, said the agency would lead an investigation into the incident as soon as it is safe to do so.
NOSDRA had also directed NAOC to shut down the oil and gas wells feeding the breached pipeline to extinguish the pressure and pave the way for a Joint Investigative Visit.
FG Confiscates 20m Litres Of Illegally Refined AGO
The Federal Government says the continued efforts by security agencies has led to the confiscation of over 20.2million litres of illegally refined Automotive Gasolme Oil (AGO), otherwise known as diesel.
Minister of Information and Culture, Lai Mohammed, disclosed this in Port Harcourt while carrying out an aerial survey of illegal refinery sites and hotspots along the Nembe Creek Trunk Line and the Trans-Niger Pipelines’ right of way on Friday.
Mohammed said over 210 suspects have been arrested in its efforts to combat crude oil theft in the Niger Delta region, lamenting that the activities of vandals and economic saboteurs have severely impacted the country’s crude oil production.
The Minister said over 461,000 litres of Premium Motor Spirit, 843,000 litres of Dual-Purpose Kerosene, and 383,000 barrels of crude oil have also been confiscated.
He said an additional 365 illegal refining sites were destroyed, with about 1,054 refining ovens, 1,210 metal storage tanks, 838 dugout pits, and 346 reservoirs also destroyed.
“Since the post-covid pandemic recovery of crude oil prices, Nigeria has been unable to meet its OPEC Production quota, hurting the Nigerian economy.
“Due to the nefarious activities of vandals, Nigeria has been losing out on producing approximately 700,000 Barrels of oil daily. This volume is split between crude stolen and production deferment (shut-ins) due to legitimate fear of losing substantial volumes in transit.
“Terminal receipts have persistently declined, leading to decisions such as the Force Majure declared at the Bonny Oil and Gas Terminal in March 2022,” he said.
The Minister also disclosed that the NNPC Ltd had set up a new security architecture to serve as a solid response to detect, deter, and respond to the activities of vandals.
He said the security architecture leveraged collaboration between the Upstream operators, Industry Regulators, Government Security Agencies, and Private Security Contractors.
He further said NNPC Ltd.’s Command and Control Centre has been set up for round-the-clock monitoring of petroleum operations and activities within the Nigerian Exclusive Economic Zone.
According to him, all vessel movements within the Nigerian Exclusive Economic Zone as well as all Ship-to-ship activities within the same zone are now monitored.
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