Obama vs. Romney: Sizing up the electric industry's winners and losers

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By Doug Houseman

 

Having looked at the Energy Policy Guidelines on both President Barack Obama’s website and that of former Massachusetts Governor Mitt Romney, the one thing that is for sure is that they lack details. But that said, it's still worthwhile to sort out the winners and losers in the electric industry under each person as president (assuming that they could get all of their energy policy in place).

 

The results are pretty stark. The positions of both candidates, while light in detail, point to very different winners and losers. It is slightly surprising to see how different the policies really are when you look at them in a winners/losers context as I have done below. (In all cases, the winners and losers described here focus on U.S. based companies. What will happen to foreign companies and their exports to the U.S. is not part of this analysis.)

Under Obama

 

Winners:

·         Wind and solar manufacturers, installers and owners

·         Battery manufacturers

·         Cleantech manufacturers

·         Electric vehicles and electric vehicle infrastructure manufacturers and installers

Losers:

·         Nuclear manufacturers, engineers and installers – Reading carefully you will find that it will be impossible to build a plant under an Obama Administration, even though a quick read sounds positive.

·         New transmission infrastructure – Regulatory hurdles will slow any investment significantly.

·         Appliance manufacturers – Increasing efficiency standards will hurt overall profitability and drive down sales as prices rise to deal with the increased cost from changes to design.

·         State regulators and RTO/ISO – Look for increasing federal regulation, reducing the ability of any state or market to make policy decisions.

Unknown:

·         Small hydro and other non-conventional renewables – President Obama has been silent on these issues. Many have strong opponents.

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Under Romney

 

Winners:

·         Nuclear manufacturers, engineers and installers – With the changes in regulations, expect any utility that has a site available will want to get a shovel in the ground within two years.

·         Gas pipeline and electric transmission engineers and installers – With the reduction in regulation, both industries will be able move forward.

·         Basic research firms and universities – look for money to be re-targeted to basic research and small grants for startups through ARPA-E and the National Science Foundation.

·         State regulators – We should see a reduction in new regulations at the federal level that push on the boundaries between federal and state jurisdiction. Some new and some proposed federal regulations may be scrapped as part of the reduction in regulation effort.

·         Energy markets – Expect FERC to review energy market rules and roll back some of them making energy markets more open. Also expect that many rules now in process to reduce emissions or force other changes will move to a market mechanism where possible.

·         Small hydro – This is a low-cost way to increase renewable energy and make use of existing structures or run-of-the-river hydro. Reduction in regulation should open hundreds of small dams for repowering.

Losers:

·         Wind and solar manufacturers, installers and owners – Reduction in subsidies, loans and grants will reduce incentives to build. State renewable portfolio standards will drive a significant amount of construction, but the level of profit will decline for owners.

·         Cleantech – Subsidies and regulations that require cleantech may disappear, reducing the profit available in the market. Expect strong export support for surviving companies.

Unknown:

·         Battery and EV manufacturers – Romney is silent about electric transportation.

 

This analysis is based of material provided by the candidates websites and has not been reviewed with either candidate or their staff. I would welcome a chance to discuss this analysis and have corrections made by either candidate or their senior staff.

 

Doug Houseman is Vice President of Technology Innovation at EnerNex.