As Donald Trump launches his latest assault on renewable energy—imposing a 30 percent tariff on solar panels imported from China—a major crisis in the nuclear power industry is threatening to shut four high-profile reactors, with more shutdowns to come. These closures could pave the way for thousands of new jobs in wind and solar, offsetting at least some of the losses from Trump’s attack.
Like nearly everything else Trump does, the hike in duties makes no rational sense. Bill McKibben summed it up, tweeting: “Trump imposes 30% tariff on imported solar panels—one more effort to try and slow renewable energy, one more favor for the status quo.”
The administration’s public excuse for imposing these tariffs is to “defend American workers,” and foster the production of panels here at home. The political impetus came primarily from two manufacturers—Suniva and SolarWorld—that manufacture in the United States, but are principally owned by foreigners. Ironically, a majority of Suniva is actually owned by Chinese investors, and the company is currently involved in a tortuous debt dispute that has clouded its future.
SolarWorld’s parent company, based in Bonn, Germany, has been involved in bankruptcy proceedings that prompted its owners at one point to try to sell the company’s American holdings, primarily a manufacturing facility in Oregon.
China’s record on renewable energy is mixed. The nation has long been committed to nuclear energy, and currently has thirty-eight reactors in operation. After the 2011 Fukushima disaster in Japan, China staged a major re-examination of its new reactor projects, but has since committed to building another twenty.
But China has also poured immense resources into leading the world in photovoltaic cell production. It flooded the field with below-cost, government subsidized panels that helped drive the photovoltaics giant Solyndra into bankruptcy. Solyndra defaulted on a $500 million Obama loan, prompting a high-profile assault on renewables from fossil and nuclear advocates.
China’s record on renewable energy is mixed.
In 2011, then-U.S. Senator Sander Levin of Michigan charged the Chinese with unfair trade practices, saying in a statement, “China is systematically deploying an arsenal of trade distorting policies to corner the global market in green technology products, whether it be electric cars, wind turbines or solar products.’’
But in the years since, the burgeoning U.S. market for cheap Chinese panels has birthed a very large industry. More than a quarter-million Americans now work in photovoltaics, with most of the jobs in building desert arrays or perching the panels on rooftops. Except for the very marginal pressure from Suniva and SolarWorld, solar advocates have focussed on the rapid spread of low-cost panels, even if they come from China.
Powered largely by Chinese product, the cost of a solar-generated watt of power has dropped from $6.00 in the late 1990s to around $0.72 in 2016. Further drops are considered inevitable. At that price, there is virtually no economic margin for any other new energy production construction except wind and natural gas. Even gas—with its uncertain long-term supply—is on the cusp of being priced out.
There is virtually no economic margin for any other new energy production construction beyond solar, except wind and natural gas. Even gas—with its uncertain long-term supply—is on the cusp of being priced out.
Thus, the industry’s reaction to Trump’s solar panel tariff has been fierce.
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“We are not happy with this decision,” Abigail Ross Hopper, president of the American Solar Energy Association, told Reuters. “It’s just basic economics—if you raise the price of a product, it’s going to decrease demand for that product.” Trump’s move is predicted to drop upcoming solar installations by 10 to 15 percent and cost some 23,000 jobs.
Sustainable energy professor Scott Sklar, in an email to The Progressive, estimated that Trump’s 30 percent tariff will, after four years, “retard the solar market by 9 percent, cause the loss of thousands of U.S. jobs, and not save the two companies that brought the anti-competitive tariff request initially. The tariff was a political statement to China rather than specifically addressing the health of the U.S. solar industry and increasing U.S. solar jobs.”
Two major developments in the nuclear power industry further illustrate the absurdity of Trump’s decision.
In California, the Public Utilities Commission has gutted a major agreement that would have kept two mammoth reactors at Diablo Canyon operating for several more years. The landmark deal—cut between Pacific Gas & Electric, the host communities around San Luis Obispo, the reactors’ union workers and two environmental groups—called for PG&E to collect some $1.3 billion from ratepayers.
But the California commission cut PG&E’s take to about $300 million. To continue running the two fast-deteriorating old reactors would require massive capital repairs. The company also has admitted that all of Diablo’s power can be otherwise produced with zero- and low-carbon green technologies.
While Trump’s tariffs may slightly alter the math, they’re not expected to make photovoltaics, wind, geothermal, or increased efficiency more expensive than the power Diablo might generate in the coming seven years. Thus, Diablo opponents like Linda Sealey of the San Luis-based Mothers for Peace are extremely hopeful for early shutdowns.
“We think this makes it likely they’ll shut as early as 2020,” she told me January 18 on California Solartopia at KPFK radio in Los Angeles. “They just can’t compete.”
A parallel fate may soon overtake Ohio’s ancient Perry and Davis-Besse reactors on Lake Erie. Because the increasingly decrepit nuclear plants have been priced out of the market and face huge capital repairs, their owner FirstEnergy has been desperately begging the Ohio legislature for massive bailouts, which it has so far resisted. As a result FirstEnergy is poised to go bankrupt, and may soon be bought out by financiers expected to insist the two reactors finally shut. A decision is expected in April.
The shutdown of four more major reactors would be a huge blow to the downwardly spiraling atomic energy industry.
The shutdown of four more major reactors would be a huge blow to the downwardly spiraling atomic energy industry. California’s booming solar business employs more than 100,000 Americans, more than are currently digging coal nationwide. The void left by Diablo’s shutdown would generate thousands of Golden State jobs and billions in renewable revenue.
In northern Ohio, massive wind potential is also poised to create far more jobs than are currently in place at the two reactors, with energy to be generated far more cheaply. Overall, the closure of these four high-profile plants would thus accelerate the already rapid run away from nuclear power toward renewable sources, regardless of any attempt by the Trump Administration to alter the course.