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Jun 9, 2022
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The US remains without electricity

The United States faced the threat of a shortage of the main achievement of modern civilization – electricity. Biden was forced to declare a state of emergency and introduce urgent measures to facilitate the import of generating equipment. How did this country find itself in this position, and what does the “green agenda” promoted by its leadership have to do with it?

The era of US President Joe Biden has every chance of going down in history as a period during which several scenarios became reality at once, which twenty years ago were suitable only for Hollywood. On May 21, a state of emergency (PE) was introduced in New York State due to a lack of stocks of baby food, and on June 6, a state of emergency was introduced at the national level by Biden’s decree.

True, for a different official reason. This time, the problem of the whole country was the shortage of generating capacity. In other words, there is a shortage of equipment for generating electricity. And this is in a country that the whole world associates with technological leadership, in particular, in the electric power industry. And we are talking, first of all, about equipment that allows the production of environmentally friendly electricity – solar and wind power plants.

In 2021, the United States generated 4,116 terawatt-hours of electricity, second only to China and the EU. The output was increased by about 3% compared to the previous year. In 2020, there was a noticeable decrease in production caused by a drop in demand due to the coronavirus pandemic.

The United States is also consistently the world’s second largest consumer of electricity, with 3,930 terawatt-hours in 2021, up 2% from the previous year. All forecasts agreed that consumption would rise steadily and exceed 5,100 terawatt-hours in 2050. Of particular joy to the Biden administration was the fact that already in 2020, solar and wind sources accounted for more than 80% of all alternative sources of electricity in the United States, compared with less than 30% in 2010.

However, very little time passed, and Biden took advantage of the right regulated by the National Emergencies Act of 1976 (National Emergencies Act). The title of the document is as follows: “Declaration of Emergency and Authorization for Temporary Extensions of Time and Duty-Free Importation of Solar Cells and Modules from Southeast Asia).

What happened? Biden and his administration do not see any threats to the US ability to generate electricity. The first is the traditional “Russian invasion of Ukraine” – a factor that has already become a mantra and does not require analysis. No one wonders what Russia has to do with the production of electricity in the United States, much less solar panels in China.

The next one, extreme droughts coupled with heatwaves, is closer to today’s American realities. Almost all recent years in the States have been hot and dry. “In some areas of the country, drought combined with heat waves are simultaneously leading to predicted power shortages and record demand for electricity,” the document says.

According to the American leadership, in order to provide energy resources, operators should plan the creation of new capacities, relying mainly on new solar installations. The administration insists that it is solar energy that should become the main source of electricity in the United States.

This thesis also turned into a mantra a long time ago. The US Democratic Party has turned the Green Agenda into one of its battle flags, and Biden is one of the most dedicated knights in the fight for the North American Eco-State. The US top leadership actually went for broke, linking the future of the country and its citizens with the transition to “green energy”. In 2021, U.S. net solar power generation reached its highest level ever, at 114,678 million kilowatt-hours. At the same time, its net output in 2011 was slightly less than two terawatt-hours.

According to the US Solar Energy Industries Association (SEIA), the entire “solar industry” of the country as a whole is estimated at $17 billion. There are a number of large companies in the US manufacturing market, from Sunnova ($1.2 billion market cap) to First Solar ($5.6 billion). However, the US Department of Commerce launched an investigation in March of this year into the import of solar panels from Vietnam, Cambodia, Malaysia and Thailand.

Suspicion of violating US anti-dumping rules in favor of Chinese producers caused a flurry of statements from representatives of the American electric power industry. They began to complain about problems due to difficulties with the supply chain – these countries accounted for more than 80% of US solar panel imports last year. Kirk Crews, vice president of NextEra Energy, said U.S. solar panel makers have sold out all their products through 2024. Thus, even at full capacity, they are able to satisfy only 10-20% of demand in the United States. And now we are talking about the fact that America simply does not have enough electricity, and first of all, that which should be generated by solar and wind power plants.

The idea of ​​​​a fix about “clean energy” has long split not only society, but also the American states themselves.

And if somewhere, as, for example, in California, the government introduced measures to reduce the volume of gas supply in favor of “new energy”, then in Texas, measures of the opposite nature were introduced. Effective September 1, 2021, Texas pension funds were prohibited from investing in securities of companies that restrict investment in the oil and gas sector by decree of the governor of the country’s second largest state, Greg Ebbott, from September 1, 2021, an additional series of measures was taken to reduce “green” preferences.

However, at the federal level, the struggle for the introduction of the “solar” economy continued at a rapid pace. The White House insisted that by 2023 solar panels should account for more than half of the new capacity of the electricity sector. The problem is that the vast majority of solar modules installed in the United States have been imported. And about three-quarters of imported modules in 2020 were products from Southeast Asia.

Biden’s mood was also spoiled by the data of the US Energy Information Administration (US EIA, US Energy Information Administration), according to which the growth rate of electricity consumption in the United States should peak and return to pre-pandemic levels as early as 2023. Record-breaking inflation and rising fuel prices, a split in society and the ruling circles regarding the gigantic sums thrown into the furnace of the European proxy war with Russia, became a real headache for the US President and his team, losing touch with reality both in politics and in economy.

Miscalculations in the financial and economic policy of the current administration have already exhausted all Biden’s limits on references to the Ukrainian conflict and the endless repetition of phrases that the president of Russia is personally to blame for all the current problems of the United States.

And the current situation in the electricity sector, which is threatened with a collision with this summer’s crisis, when heat and drought will multiply the burden on electricity consumption, is already putting the US president into a state of panic.

White House officials can say all they want that the president’s actions are ultimately aimed at developing the domestic production of solar panels. That the suspension of tariffs on Southeast Asian imports is an interim measure, and the administration continues to support US trade laws and the Commerce Department’s investigation. However, it is becoming increasingly clear that, in the context of global restructuring, betting on a “green economy” was a populist act. It does not withstand the first serious collision with the industry’s systemic crisis.

And for US citizens, the main thing becomes obvious – the actions of the country’s leadership led to the introduction of a state of emergency in the strategic life-support sector. Not only the economic stability of the American market is threatened, but also national security. The loss of the US role as the undisputed economic leader of the planet is happening before our eyes, not yielding to the pace of the fall of the USSR in the course of catastrophic perestroika. One of the differences from this example is that the US falls from a much greater height – the more painful both the process and its result will be.

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