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Q&A

Trump’s Hydrogen Mystery

A conversation with Frank Wolak of the Fuel Cell and Hydrogen Energy Association.

Frank Wolak.
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We’re joined today by Frank Wolak, CEO of perhaps the most crucial D.C. trade group for all things hydrogen: the Fuel Cell and Hydrogen Energy Association. The morning after Election Day we chatted about whether Trump 2.0 will be as receptive as members of Congress have been to hydrogen and the IRA’s tax credit for producing the fuel. Let’s look inside his crystal ball, shall we?

Simply put, will president-elect Donald Trump keep the IRA’s 45V tax credit in place?

So a couple things there. First, the production tax credit still has to be finalized and what they do about the tax credits, if anything, is a function of whether the Biden administration issues final guidance.

If they issue final guidance, then what that guidance says will determine what kind of reaction the Trump administration may have, whether to adjust it or tweak it.

The second thing: I think the tax credits fit into a question of the IRA broadly and hydrogen specifically. The Trump administration is going to be looking at the entirety of the IRA. There’s the question of what pushback hydrogen has in this administration and if it’s viewed as valuable or important or secondary, tertiary to other things. And I think we’ve yet to see that in the form of any platform.

So Trump’s view on hydrogen is a mystery then – how will that uncertainty impact hydrogen projects in development today?

The uncertainty that has been experienced by this industry predates the election outcome. The long wait for guidance has definitely slowed down the amount of investment. They’ve put many things on hold. This is not a secret.

What I’ll say is, the ability to regroup and fulfill the expectations that this industry had two or three years ago is hugely dependent on the outcome of the tax credit.

What do you think we’ll see companies do in this information vacuum? Will we see them double down on supporting the credit or potentially get out of hydrogen since it’s an emerging, nascent technology?

The doubling down on the tax credit depends on what the guidance looks like.

If the guidance looks flexible, the question is: how do you take that flexibility and make sure the Trump administration continues it and sees it as valuable or vital?

If the tax credit becomes rigid and stays rigid in the Biden administration, you’ll have a two step process – to unwind the rigidity and then also encourage the Trump administration to see the merits. If the guidance stays as stated, the work is harder.

The degree to which industry continues to make investments and says, “hey, we’re all in,” is a function of how these tax credits emerged. Are they going to really keep fighting and to keep the momentum going, or are the [credits] so limited that companies go, “look this is going to be very very hard to overcome in the U.S. so we’re going to take our investment elsewhere.”

You think we might see companies dip out of the hydrogen space over the credit’s outcome?

Mature long term players who are multinationals … are remaining extremely positive. They may adjust the sequence of their investments but they’re in this because they’re in hydrogen and want to be in this market as much as possible.

But those who saw this as an opportunity to come in and take advantage of tax credits are having those reactions of, “Should I invest? Do I look [at it] positively?” And that’s probably natural.

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Q&A

An America First Strategy for Renewable Energy?

A conversation with Tim Brightbill of Wiley Rein LLP

Tim Brightbill of Wiley Rein LLP.
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Today we’re talking with Tim Brightbill, a trade attorney at Wiley Rein LLP and lead counsel for a coalition of U.S. solar cell and module manufacturers – the American Alliance for Solar Manufacturing Trade Committee. Last week, his client won a massive victory – fresh tariffs on south Asian solar panel parts – on the premise that Chinese firms are dumping cheap products in the region to drive down prices and hurt American companies. It’s the latest in a long series of decadal trade actions against solar parts with Chinese origin.

We wanted to talk to Tim about how this move could affect developers, if an America-first strategy could help insulate solar from political opposition, and how this could play out in next year’s talks over the future of the IRA. The following conversation was lightly edited for clarity.

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Policy Watch

The IRA’s Coming China Change

And more of the week’s biggest news around renewable energy policy.

Trump.
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Sourcing requirements – As we explain in our Q&A today, there’s momentum building in Washington, D.C., to attach new sourcing requirements to an IRA credit for advanced manufacturing known as 45X.

  • 45X is supposed to supercharge production of battery and solar components, as well as key minerals and materials for those components that are largely imported from China or what U.S. trade officials believe are Chinese pass-throughs.
  • Some U.S. companies are now quietly urging Congress to enact a “foreign entity of concern” requirement to 45X that would essentially stop battery and solar manufacturing plants with Chinese business involvement from qualifying.
  • Why? Well, doing this would definitely insulate the credit from GOP repeal by tying it not to rapid decarbonization but instead American blue collar jobs.
  • Patrick Donnelly, chief commercial officer for Anovion, told attendees of a Hill briefing I moderated earlier this week that he wants to see this happen because it would be a “game changer” for domestic manufacturing. “I’ve heard some Republicans talking about it already.”
  • But it could also undermine the effectiveness of the credit for climate purposes. Similar requirements were tacked onto the IRA’s EV consumer credit that curtailed its reach and meant many cars couldn’t access the benefit.

Virginia’s planning – The state of Virginia is looking at its own plans to override local objections, which would make it one of the few GOP-led states to do so.

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Hotspots

Is Trump Already Killing Off Renewable Energy Projects?

And more of the week’s news around renewable energy conflicts.

Map of renewable energy conflicts.
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Queens County, New York – TotalEnergies’ first Attentive Energy offshore wind project might be the canary in the Trumpy renewables coal mine.

  • The New York wind project in the bight has been indefinitely paused, according to TotalEnergies CEO Patrick Pouyenne, meaning we have our first offshore wind derailment of the Trump era, many weeks before he’s even taken office.
  • It’s unclear how connected Trump is to the move. Attentive Energy also pulled out of New York state’s fifth offshore wind solicitation before this news dropped, which also arrived days before the Bureau of Ocean Energy Management implemented new requirements for projects built in the area where the project would be built.
  • However, remember that even though Attentive Energy has little opposition in New York State, anti-offshore activists are aggressively challenging efforts by New Jersey state to buy power from the project.
  • We’ll have to wait and see if this decision is a domino for other offshore wind curtailments. But we’re already seeing evidence, as Shell announced hours ago it is no longer investing in new offshore wind projects.

Clinton County, Michigan – EV manufacturing news in Michigan is showing that fallout from Trump’s election may not be limited to offshore wind, and could creep into other projects facing grassroots opposition.

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