WASHINGTON (Reuters) - EDP-Energias de Portugal is optimistic about renewable power investments in the United States, despite President Donald Trump’s push to support coal and nuclear power plants and a tariff his administration slapped on imported solar panels, its chief executive said in an interview.
“U.S. renewables represent the growth engine of our company,” António Mexia, who since 2006 has run the power utility EDP (EDP.LS), one of Portugal’s biggest companies, said in an interview on Tuesday.
U.S. wind and solar power projects represented 65 percent of new investments last year at EDP’s renewables arm EDPR (EDPR.LS), and are expected to continue at that rate in 2018 and in 2019, Mexia said. EDPR operates renewable projects in 11 other countries in Europe and the Americas.
This month, EDPR and four other companies joined with a Northern California power provider to develop an offshore wind farm with advanced floating turbines, expected to have the capacity to generate between 100 to 150 megawatts (MW). The group is talking with fishing industry and Department of Defense representatives about locations for the wind farm.
Mexia said floating technology needs to be proven commercially, but tests for the last five years off the coast of Portugal have shown the floating turbines, which use technology similar to floating oil rigs, have survived waves up to 56 feet (17 m) high.
“Traditional offshore (wind power) surprised everybody and I am sure floating offshore will do the same,” Mexia said. The advantage of floating platforms, to be placed about 20 miles (32 km) offshore in deep water, is their increased efficiency, which he expects will reach between 50 and 60 percent of rated peak capacity. That’s up from about 37 percent efficiency, which the U.S. Energy Information Administration said was the wind power industry’s average in 2017.
EDPR also invests in U.S. solar power, but its latest project is carefully planned to begin operations after the phase out of a tariff on imported solar panels that Trump signed into law on Jan. 23. The 30 percent tariff on the panels drops to 15 percent a few years later before being phased out entirely.
EDPR has secured a 200 MW power purchase agreement on the solar project with Hoosier Energy Rural Electric Cooperative in Indiana, with the start of operations expected in 2022.
Mexia, who was in Washington for a summit of leaders of the global electric power industry, said he is confident wind power will thrive in the United States because there are nearly 1,000 U.S. plants and companies that make parts or source parts for turbines, ensuring the renewables sector has broad support nationwide.
Coal will have a role in the near future, he said, but eventually he expects it is an “industry that will disappear” despite efforts by the Trump administration to slash regulations on coal and to use subsidies to support struggling power plants that burn the fossil fuel.
Coal was an important resource domestically for EDP last year. EDP posted a weaker-than-expected 2017 profit after its revenue fell 6 percent as a severe drought in Portugal and Spain sapped its reservoirs for hydropower and forced it to resort to more expensive power generation including coal and combined cycle plants, the company said in March.
Despite the Trump administration’s policies to support coal and nuclear plants, Mexia sees the United States a preferable place to invest in renewables than many countries in Europe.
And Mexia is hopeful that Trump’s policies will not spark a U.S. trade war with China, that could affect EDP. The company’s biggest shareholder is China Three Gorges, a Chinese state-owned power company, which owns a nearly 24 percent stake.
“It’s a game where nobody wins,” Mexia said of trade wars.
Reporting by Timothy Gardner; Editing by Phil Berlowitz