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RenewVerde Newsletter – Feb 2025
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This month’s newsletter discusses the impacts of tariffs on energy development, energy legislation in Maryland, and the January electricity price increases.
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Federal Tariffs and Energy Development
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Trump’s recent tariffs on imports will have massive impacts on renewable energy. China is one of the main producers of electrical equipment, so tariffs specifically targeting China will disrupt the supply of solar panels, transformers, and other electrical components. Other countries which use materials from China could be targeted by these tariffs as well. Additionally, the increase in aluminum tariffs from ten percent to 25 percent, effective next month, will raise the prices of electrical components across the board. The lithium-ion battery market will see some of the toughest impacts, as the United States’ demand for batteries is quickly increasing and Chinese companies manufacture the vast majority of commercial scale batteries worldwide. In addition to financial impacts, tariffs will delay project development for new renewable energy generators at a time when power plants are already struggling to keep up with rising demand.
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So far this session, the budget has been the primary concern of the state legislators, but this week the focus is shifting to energy policy.
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Today and tomorrow, the MD House of Delegates Economic Matters Committee and the Senate Education, Energy, and the Environment Committee have hearings for energy bills. Some of the bills being discussed are the ENERGIZE Act which will promote nuclear energy generation; the Reclaim Renewable Energy Act which disqualifies refuse-derived fuel and waste-to-energy as renewable resources; several bills on requirements for new transmission lines; and customer protections from rising utility rates.
House Economic Matters Committee Meeting Schedule
The Empowering New Energy Resources and Green Initiatives Toward a Zero-Emission (ENERGIZE) Maryland Act is one of the most likely energy bills to pass. It has support from democratic leadership in both houses of the state legislature. The bill supports small nuclear power plants by creating a requirement that 22.5% of the electricity consumed in the state must be from small, in-state, nuclear power plants or from renewable energy generation in excess of the current renewable resource requirements. The first small modular nuclear reactor (SMR) designs recently received federal approval, and Maryland hopes to utilize this new technology. The bill also seeks to increase solar and offshore wind development. The solar compliance payment will be kept at the current rate of six cents per kWh rather than continuing to decrease annually, which will support solar by keeping the price of solar energy higher. Offshore wind developers will face fees, dissuading companies from backing out of their projects.
ENERGIZE Act
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Maryland Energy Market Dynamics
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Last month, electricity and gas prices increased steeply, and they are expected to continue to rise. Gas and electricity prices were driven up by increased use from the persistent cold temperatures, and the elevated costs to operate natural gas power plants further raised electricity costs. Maryland’s heavy reliance on natural gas for electricity (38% of in-state electrical generation) meant the increased gas prices had massive impacts on electricity prices.
A lack of local energy generation is one of the main drivers of the anticipated increase in energy costs over the next few years, as hundreds of millions of dollars in transmission system upgrades are required to bring electricity into the state to meet increasing demand. Many of the bills on transmission line development and utility oversight are in response to the increasing electricity rates. Although, these bills can provide some customer protection they are unlikely to reduce energy costs since they do not address the underlying supply and demand imbalance in Maryland’s energy market.
See related article
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