German companies defy Trump: Green electricity from the USA is on the rise!

German companies defy Trump: Green electricity from the USA is on the rise!

The USA is emerging as potentially the largest market for clean technologies. Despite the political challenges posed by President Donald Trump's administrative measures, German companies like RWE are betting on the opportunities in the renewable energy sector in the United States. RWE plans to build offshore wind farms with a total capacity of three gigawatts, which is equivalent to the output of four to six coal-fired power plants. The lease agreements for the offshore areas that RWE has leased on the Atlantic and Pacific coasts run until the 2060s, which secures long-term investments. The construction costs of the planned facilities could be up to ten billion dollars, but political uncertainties are fueling concerns.

Trump had already banned the construction of wind farms in US waters at the beginning of his term and signed several executive orders on climate policy, which are described as “unleashing American energy”. These measures led to a temporary suspension of permits for new offshore wind projects and government leases, which is currently affecting many projects in the industry. Nevertheless, companies are happy about the support of local politicians, mostly Republicans, who offer an incentive for sustainable jobs.

The fight for renewable energies

Developments in renewable energy are promising, despite the Trump administration's cancellation of funding and weakening of climate regulations. Nordex, for example, is planning to produce nacelles for wind turbines in Iowa and to reopen an existing factory, despite the uncertainties associated with the funding stop. ThyssenKrupp Nucera is building a factory in Houston to produce green hydrogen. Daimler Truck is also working on low-emission alternatives to conventional diesel engines.

Support from the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA) forms the basis for numerous projects. However, Trump's order prohibited payments under these laws, jeopardizing the financial foundation of many initiatives. While companies are hesitant about their investments, they still sometimes place higher demands on permits and funding in order to realize their projects.

Economic and environmental impacts

There are also significant concerns about the environmental and economic consequences of the Trump administration's current climate policies. The US is the second largest emitter of greenhouse gases, and a report warns that a three degree Celsius increase in average global temperature could significantly reduce economic output. Extreme weather events have caused more than $2 trillion in economic losses over the past decade. Experts like Corey Bradshaw see current harmful climate protection measures as a risk to jobs and the entire economy.

Employment in the renewable energy sector grew more than twice as fast as the overall U.S. labor market in 2023, highlighting the importance of policy support for the industry. Trump's often ideologically motivated criticism of the previous models shows how hesitant the USA remains in implementing a comprehensive energy transition, despite falling costs for renewable technologies and stable consumption.

The dynamic development of the industry could be jeopardized by future regulations, which recently highlights the uncertainties surrounding German companies' projects. The question remains how the political environment will influence the future of clean electricity in the USA.

German companies are showing determination to further advance the renewable energy market in the United States - a challenge that is playing out in a rapidly changing political landscape.

For more information on the policy measures read Focus and DW.