Decarbonization Shouldn't be a Partisan Issue
By Siddhartha Sachdeva, founder and CEO of Innowatts
When it comes to the U.S. energy sector, President Joe Biden has hit the ground running and made clear that decarbonization is a top priority. But while we shouldn’t understate the boldness of Biden’s energy plan, we also shouldn’t overstate the degree to which decarbonization is being driven by his administration’s policies. The reality is that while climate policy remains something of a partisan football, decarbonization is actually being driven by powerful market forces — including, most importantly, consumer demand — that predate the Biden presidency. Renewables flourished during the Trump presidency, despite his administration’s energy and climate policies, and they’ll continue to thrive on Biden’s watch — not because of his policies, but because decarbonization simply makes sense for both consumers and energy providers.
Politics as usual?
The market’s role in driving decarbonization is vitally important, because no matter Biden’s policy positions, pushing through an ambitious climate agenda won’t be easy. It might be possible to pass Biden’s energy plan via the reconciliation process, but even then Biden would require 50 Democratic votes to enact his legislative agenda, and it’s far from clear that Sen. Joe Manchin of West Virginia would go along with that plan.
Because of that, Biden’s agenda is less significant as a strategy for changing the face of American energy than as a sign of how far we’ve come. While the politics are complicated, climate-friendly energy practices are actually surprisingly uncontroversial. Away from the Beltway, regular people from across the political spectrum recognize the need for a resilient, future-proof energy infrastructure, and expect providers to make real progress in areas ranging from EV integration to facilitating the rollout of rooftop solar panels. And because of improving technologies and economies of scale, renewable energy is now cost-competitive with legacy energy production, creating a powerful economic driver for change.
That economic and technological shift, rather than political posturing, is driving a major transformation of the energy space. We’re seeing oil majors set net-zero goals and ink big renewables deals. With big clean-energy investments now coming through, we saw global investments in renewables hit $0.5T last year. Cheap clean energy has already won over Wall Street — and with big money behind it, the sector is now snowballing and basically unstoppable.
Innovation isn’t partisan
The truth is that the current shift toward decarbonization isn’t being forcibly imposed (or significantly impeded) by activist politicians. Instead, it’s being actively pursued by energy providers as part of their efforts to modernize the electrical grid. That’s something that every company wants and needs, regardless of their perspective on the Biden administration’s clean-energy program.
Put differently: sustainable energy isn’t just a fad; it’s an innovation. And it’s one that has increasingly proven its worth and achieved not just maturity but an ability to outperform legacy energy generation methods. New technologies such as AI-based analytics will only amplify that nascent marketplace advantage. By allowing providers to better-manage the volatility that renewables and distributed resources add to our energy supply, AI can eliminate some of the biggest objections raised against sustainable energy sources, helping to defuse partisanship as we look to build a smarter and more resilient grid.
Opportunity, not ideology
The bottom line is that while President Biden’s climate policies will facilitate the spread of new low-carbon energy technologies, they aren’t the reason for the spread of those technologies. The transformation of the U.S. and global energy sector was well underway before Biden even announced his candidacy for president, and it will continue long after Biden’s team departs the Oval Office.
So while we’ll undoubtedly see plenty of political bickering about Biden’s energy plans, it’s important that we don’t allow decarbonization itself to become a political issue. The market has already decided that decarbonization is the way forward, and high-tech energy solutions are making it easier and quicker for U.S. providers to take advantage of that transformation. Biden’s policies won’t change the trajectory that the market is already on — at most, they’ll just make it a bit easier for America’s energy innovators to move fast and compete globally.
About the author:
Siddhartha Sachdeva is the founder and CEO of Innowatts, a SaaS energy AI company based in Houston, Texas. Prior to this, Sid served as the Senior Director of Innovation and Technology at NRG Energy. He has 20 years of experience in the retail energy and power markets.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.