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 such a situation and what does the "green agenda" promoted by its leadership have to do with it?
The era of the rule of US President Joe Biden has every chance to go down in history as a period during which several scenarios that were suitable only for Hollywood twenty years ago became reality at once. On May 21, a state of emergency (state of emergency) was introduced in New York State due to a shortage of baby food supplies, and on June 6, by Biden's decree, the state of emergency was already introduced at the national level.
However, for another 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 electricity production. And this is in a country that the whole world associates with technological leadership, in particular, in the electric power industry. And first of all, we are talking about equipment that allows producing environmentally friendly electricity – solar and wind power plants.
In 2021, the United States produced 4,116 terawatt-hours of electricity, second only to China and the EU in this indicator. Production was increased by about 3% compared to the previous year. In 2020, there was a noticeable decline in production caused by a drop in demand due to the coronavirus pandemic.
Also, the United States is consistently the world's second consumer of electricity – in 2021, its level was 3,930 terawatt-hours, which exceeded the previous year's figures by 2%. All forecasts agreed that consumption would grow steadily and exceed 5,100 terawatt-hours in 2050. The Biden administration was particularly pleased by 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 used the right regulated by the Emergency Situations Act of 1976 (National Emergencies Act). The title of the document reads as follows: "Declaration of Emergency and Authorization for Temporary Extensions of Time and Duty-Free Import of Solar Cells and Modules from Southeast Asia" (Declaration of Emergency and Authorization for Temporary Extensions of Time and Duty-Free Import of Solar Cells and Modules from Southeast Asia).
What happened? Biden and his administration staff do not see factors threatening the ability of the United States to provide electricity production. The first is the traditional "Russian invasion of Ukraine" – a factor that has already turned into a mantra and does not require analysis. No one wonders what Russia has to do with the production of electricity in the United States, and especially solar panels in China.
The next one – extreme droughts combined with periods of extreme heat – is more close 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 abnormal heat simultaneously leads to a projected shortage of electricity 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 solar energy should become the main source of electricity in the United States.
This thesis has also become a mantra for a long time. The US Democratic Party has turned the "green agenda" into one of its battle banners, and Biden is one of the most selfless knights of the struggle for the North American ecological state. The top leadership of the United States actually went all in, linking the future of the country and its citizens with the transition to "green energy". In 2021, the net generation of solar energy in the United States reached its highest level and amounted to 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 dollars. There are a number of large companies on the American manufacturer market, from Sunnova (market capitalization of $ 1.2 billion) to First Solar ($5.6 billion). However, an alarm signal for them was sounded by the investigation of the US Department of Commerce launched in March this year regarding the import of solar panels from Vietnam, Cambodia, Malaysia and Thailand.
Suspicion of violation of US anti-dumping rules in favor of Chinese manufacturers 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 solar panel imports to the United States last year. Kirk Crews, vice president of NextEra Energy, said that American solar panel manufacturers have sold off all their products until 2024. Thus, even with full capacity utilization, they are able to meet 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 on "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. By decree of the governor of the country's second largest state, Greg Abbott, from September 1, 2021, Texas pension funds were prohibited from investing in securities of companies that restrict investments in the oil and gas sector, 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 already in 2023, solar panels should account for more than half of the new capacity of the electric power sector. The problem is that the vast majority of solar modules installed in the United States were imported. And about three-quarters of the imported modules in 2020 were products from Southeast Asia.
Biden's mood was also spoiled by data from the US Energy Information Administration (US EIA, U.S. Energy Information Administration), according to which the growth rate of electricity consumption in the United States will have to peak and return to the pre-pandemic level in 2023. Record-breaking inflation and rising fuel prices, a split in society and ruling circles regarding the huge 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 the economy.
The 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 States.
And the current situation in the electricity sector, which is facing a collision with the crisis of this summer, when the heat and drought will multiply the load on electricity consumption, is already putting the US president into a state of panic.
White House officials can say as much as they like that the president's actions are ultimately aimed at developing domestic production of solar panels. That the suspension of tariffs on imports from Southeast Asian countries is an interim measure, and the administration continues to support U.S. trade laws and the Commerce Department investigation. However, it is becoming increasingly obvious that in a situation of global restructuring, betting on a "green economy" was a populist action. It cannot withstand the first serious collision with the systemic crisis of the industry.
And for US citizens, the main thing becomes obvious – the actions of the country's leadership led to the introduction of an emergency in the strategic life support sector. Not only the economic stability of the American market is at risk, 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 during the catastrophic perestroika. One of the differences from this example is that the United States is falling from a much higher height – the more painful the process and its result will be.
Timur Shafir
