— This is the script of CNBC's news report for China's CCTV on October 5, Thursday.
If Trump formerly abolishes President Obama's "Clean Energy Initiative" on Tuesday, U.S time, it could possibly mark a new chapter in energy policy for the United States. The "clean energy plan" established by the Obama administration stipulates that each state would come out with a plan to use greenhouse gas emissions in 2005 as a baseline and hoped to reduce greenhouse gas emissions by 32% by 2030. Environmentalists naturally welcome the introduction of such a policy as this will promote the development of clean and renewable energy. However, enacting this plan within a capitalist market is not without controversy. For example, even Scott Pruitt, the US Administrator of Environment Protection Agency and those within this agency, believe that the policies under the Obama administration were beyond the law.
Pruitt said that the "Clean Energy Initiative" would force states to invest in natural gas and renewable power stations and in turn, shutting down coal-fired and nuclear power plants. Therefore the people opposing the plan argue that regulators should not use regulatory powers to determine the winners and losers in the market. Obviously, Trump belongs to such an opposition. After announcing U.S withdrawal from the Paris Climate Accord, Trump abolished the Clean Energy Initiative, aiming at reversing the US trend of transiting to "clean energy" and also hoping to revitalize the coal mining industry.
So the question now is whether Trump's abolition of the clean energy program can revive the traditional energy industry? Currently, some market analysts believe that even with the dampening of the "clean energy initiative", it will not change the fate of the coal industry. This is because of the cheap and abundant natural gas market competition, coupled with the rapid development of renewable energy market that resulted in coal power losing its competitive advantage and market share.
Looking at this chart from the US Energy Information Agency, it shows the proportion of energy sources for electrical supply in the U.S market in recent years. An obvious trend is how coal power supply is in sharp decline while the natural gas supply is growing steadily. It is expected that by 2018, the share of natural gas will reach 33%, surpassing coal for the first time. Furthermore, we can see the proportion of nuclear power declining, while renewable energy is increasing on a very stable momentum.
The IEA believes that with the support of global policies, as well as the lowering costs of solar energy and wind energy equipment costs and other factors, the growth of renewable energy will be accelerated and in the next five years, the world's renewable energy supply is expected to increase by 43%.
Therefore, despite Trump government showing support for traditional energy, the US renewable energy still ranks the world's second largest.
An interesting point emerges. Traditional energy supporters used to think that Obama's policies were unfavorable as it upset the coal industry. However, will these supporters gain momentum under Trump's policies? A large factor would be the market's demand for clean and renewable energy.
CNBC's Chen Qian reporting from Singapore