Utility Dive examines the expected impact of a second Trump presidential term on the future of the Inflation Reduction Act and offshore wind projects. United's Harry Godfrey predicted initiatives under the new administration are unlikely to significantly hinder the growth of renewable energy, highlighting that the ongoing clean energy transition has the potential to lower consumer energy bills and help reduce inflation in the long term.
According to Godfrey, the attitude shift kicked off by Trump during his first term was one that questioned the free trade agreements and global supply chains of past decades and instead began to ask, “What do we want to build here? What industries do we need to have a firm hold on, with control of our industrial base .... who are we able to work with?”
“It starts from, ‘what are we doing to protect ourselves, to maintain our strategic and economic edge?’” he said. “I think the industrial policy flows from this change that Donald Trump anticipates, and in some ways, catalyzes. So I think there’s a place for that industrial policy .... to continue and grow under a Trump administration.”
Republicans won control of the Senate in the next session of Congress, while control of the House remains up for grabs, leaving it currently unclear whether or not the party will have a trifecta at its disposal or be dealing with a divided Congress next year.
“[Control of the House is] neck and neck,” Godfrey said. “It will be close, and it will be close for a while.”
Some offshore wind companies’ stocks dropped following Trump’s victory – Ørsted and Vestas both saw their share price drop by around 14% by late Wednesday morning. In 2023, Trump had celebrated the cancelation of Ørsted’s Ocean Wind 1 and 2 projects offshore New Jersey in a Truth Social post, calling the projects “horrendous …. [monstrosities]” which “required massive government subsidies, and ultimately, just didn’t work” according to The Hill.
Even in the event of a trifecta, analysts including Godfrey have said it’s doubtful that Republicans would be able to fully repeal the IRA. Many projects benefiting from the law’s tax credits have already broken ground in Republican-controlled districts, prompting a group of 18 lawmakers to send a letter to Speaker Mike Johnson, R-La., in August, urging him to prioritize “business and market certainty” when it comes to IRA reform.
Republicans and their districts “have benefited mightily from investments incentivized in part by IRA and the infrastructure law,” Tyson Slocum, director of Public Citizen’s energy program, said in a Wednesday email. “So there may be cuts here and there, but I don’t think it will be a big hit to the pace of renewable deployment we’ve been seeing and will continue to see.”
Bob Keefe, executive director of environmental and economic advocacy group E2, urged Trump in a Wednesday release to “continue making America more competitive, rebuilding our manufacturing industry and strengthening our economy.”
“Now is the time to put politics and partisanship aside, and work together to continue building on the record clean energy investments, jobs and economic opportunities flowing to Republican and Democratic states alike,” Keefe said.
Trump also ran on a platform of ending inflation and lowering prices, and Godfrey noted that the cheap electricity provided by renewable energy projects – offshore wind in particular – could help lower consumer energy bills, which are a “really significant inflationary driver.”
“We do absolutely see that once offshore wind assets are in place and up and running, they have a host of advantages — a large source of clean, sustainable, incredibly low cost energy, with minimal volatility, and better able to be located near load centers in large quantities,” he said.
In general, aspects of the IRA that address “energy efficiency, demand response, transmission, as well as low-cost generation” are helpful for combating inflated energy prices, Godfrey said.
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