The Commerce Department’s chickens are coming home to roost.
On Wednesday, Indiana utility NiSource announced it will delay two scheduled 2023 coal plant retirements until 2025 because of “uncertainty” in the solar panel market that has knocked multiple solar projects off schedule by six to 18 months. The root cause? A Commerce Department investigation into Southeast Asian solar panel manufacturers that has imperiled the industry, including the very solar projects that were on track to replace the Midwestern utility’s coal operations.
The rest of NiSource’s coal units, including the Michigan City Generating Station, remain on track for retirement by 2028, the company told investors in its quarterly earnings call. The utility also said despite the solar setback, it’s still on track to achieve its goals of reducing Scope 1 greenhouse gas emissions 90% by 2030, and reducing methane emissions from its gas operations 50% by 2025.
The delay will also push back NiSource’s anticipated cost savings for customers from the pivot to cheaper sources of power generation, according to SVP and Chief Strategy and Risk Officer Shawn Anderson.
NiSource has historically been one of the most ambitious utilities in terms of transitioning from coal to renewables, and has stood out among its more-reluctant-to-decarbonize Midwestern peers. A 2020 Energy and Policy Institute analysis found that it is the country’s only large, investor-owned utility that is decarbonizing speedily enough to meet President Joe Biden’s target of a carbon-free power sector by 2035.
But while the Biden administration has been vocal about its desire to speed the adoption of renewable power in the U.S., that goal is being hamstrung by the Commerce Department investigation.
The intrigue began in February when the tiny and struggling California-based Auxin Solar asked the agency to investigate solar companies operating out of Cambodia, Malaysia, Thailand and Vietnam, which currently supply roughly 80% of the panels in the U.S. Auxin alleged that Chinese companies were dodging U.S. tariffs (which have existed for over a decade) by building panels in Southeast Asia using Chinese materials and Chinese intellectual property, and sought “fair pricing.” The department took up the request in late March, and the resulting investigation is expected to last roughly a year.
Chaos has since ensued. Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association, said in March that “this misstep will have a devastating impact on the U.S. solar market at a time when solar prices are climbing, and project delays and cancellations are adding up … Taking up this case will have a chilling effect on the solar industry.”
While no further duties would be imposed until the investigation wraps up, the uncertainty of what could result has effectively halted solar panel imports. And Auxin has since been on the receiving end of much of the solar industry’s ire. In response, Auxin CEO Mamun Rashid told E&E News that the industry is engaging in “fearmongering,” and new tariffs “would be good for America.” NiSource’s announcement shows, though, that the concerns have been well-founded.
Throwing an additional wrench in the situation is the fact that the Commerce Department initiated a major climate push mere weeks ago. Secretary Gina Raimondo directed the department to integrate climate considerations into its policies, strategic planning and programs as a part of the Biden administration’s “whole-of-government climate efforts.”
“Addressing the climate crisis has been a top priority for the Biden-Harris Administration, and at the Department of Commerce we have been working tirelessly to use every tool at our disposal to help address this crisis and related economic impacts,” Raimondo said in a press release at the time.
However, the department’s investigative body is entirely separate from political considerations, hence the less-than-ideal timing. A Commerce Department spokesperson told Protocol that “supporting U.S. workers and businesses to compete and win globally” is at the core of the agency’s mission.
“Even as we invest in the U.S. solar manufacturing industry, imported solar cells and panels remain important to advancing current efforts — and Commerce is committed to holding foreign producers accountable to playing by the same rules as U.S. producers,” the spokesperson added.
But Mattea Mrkusic, policy lead for the climate advocacy organization Evergreen Action, told Protocol that the case is still in direct conflict with the department’s commitments.
“U.S. solar deployment will need to triple — or even quadruple — by 2030, according to the Department of Energy, if we are to avert catastrophic climate change,” she said. “Resolving this case is no doubt the biggest impact the Commerce Department could have on climate change mitigation.”