Here are three new developments that will change the course of energy prospects and prices.
Which States Are Working Toward a Greener Grid?
Despite the dismantling of the Clean Power Plan and related federal regulation, many states are ambitiously forging ahead with their carbon reduction efforts. In fact, as of February 2017, nine states had already proposed increases to their renewable portfolio standards (RPS) with several, including New York, Calif. and Mass., proposing 100 percent renewable energy goals.
The loudest message from states, cities and organizations alike is that many are not interested in waiting on favorable national policy to begin prioritizing renewables.
However, even though the push for a low-carbon future continues, cleantech and energy as a whole are inevitably effected by moves at the federal level.
How Important Is a FERC Commissioner?
Following the resignation of then chairman of the Federal Energy Regulatory Commission (FERC), Norman Bay, remaining members on the commission were left unable to make major decisions on items like natural gas pipeline expansions or electricity infrastructure projects. Due to project delays, tumult within FERC could eventually limit available natural gas and in turn boost the price of electricity in affected regions.
Restoring a quorum in FERC will take time. Until then, expect energy project completion dates to be pushed back, with some at risk of being gridlocked indefinitely.
What Are the Implications of an Interest Rate Hike?
A central bank rate change can impact regional power prices in the U.S. For companies in the market for selling or buying renewable energy — either as a developer or as part of power purchase agreement — that’s important.
The U.S. Federal Reserve’s first rate hike took place on March 15, raising target interest rates by 25 basis points. This doesn’t immediately mean energy prices will take a dive, but is important to keep an eye on because, historically, as Fed rates go up so does the cost to owe money. Large projects (like a utility scale solar or wind farm) almost always involve taking on debt. So current and future rate hikes could impact economics of these projects.