Let’s talk about the Inflation Reduction Act - how much money and who benefits?
Peter Perri III
Investment Banking: Power, Climate, Infra || Energy Transition || Project Finance || M&A || Exit Strategies || Venture Capital || Private Equity || Helping Leaders Execute Great Deals & Make a Difference.
$370 billion for clean energy infrastructure?
Last month, the U.S. passed the largest piece of climate-focused legislation in the country’s history - amounting to a whopping $370 billion investment in clean energy?#infrastructure. By 2030, these investments will help the U.S. reduce emissions to 40% below 2005 levels. For those of us in the?#climate?and?#energy?sectors, this comes as a huge win - after much political debate, climate is finally getting the attention it deserves.?
Investing $60 billion in domestic renewable energy?
The Inflation Reduction Act includes a $60 billion investment in domestic?#renewableenergy?manufacturing, helping drive local production of?#wind?turbines,?#batteries,?#solar?panels, and other clean energy solutions. This investment provides manufacturers with necessary assurance of long-term financial support, reducing otherwise risky investments in new tech. With confirmed investment in clean energy for the foreseeable future, companies can focus on ramping up domestic production without fear of revenue loss.?
Making room for clean hydrogen at $3/kg
Green?#hydrogen?is the bright and shiny new thing in the energy community - and for good reason. Some estimates show that hydrogen could very well account for a quarter of the world’s energy supply by 2050. The Inflation Reduction Act will award producers up to $3/kg in tax credits for low carbon hydrogen, assuming certain requirements are met. By placing the price of green hydrogen on par with other energy sources, we can really begin to jumpstart the hydrogen economy.?
An optimistic look at biogas
Biogas has a promising future - produced from waste materials, this alternative fuel can replace natural gas and be used to power our vehicles. Biogas-producing operations, like landfills and anaerobic digesters, will receive additional tax credits, making?#biogas?more aligned with solar and wind energy. Going forward, this will increase business and investment opportunities for those in the biogas industry.?
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Tax incentives for clean energy and EV
The legislation offers a wide variety of tax credits to accelerate the adoption of low carbon?#technology. Clean energy companies will be given financial incentives to incorporate more renewable sources in the grid, including solar, wind and battery storage technologies. At the same time, individual consumers will be incentivized to install heat pumps, adopt solar, and purchase?#electriccars. For companies and investors targeting these sectors of the market, these tax incentives will help drive widespread adoption of their tech and boost revenue, all while driving toward the overarching goal of reducing national emissions.?
Tackling our methane problem (84X more potent than CO2!)
Did you know that methane is about 84 times more potent of a greenhouse gas than carbon dioxide over a 20 year timeframe? Unfortunately, this pesky gas is quite leaky, and is emitted throughout all phases of?#oilandgas?production. The Inflation Reduction Act sets hard limits on methane leakage from oil and gas industry, enforcing fees for offenders. There are several up and coming companies focused on exactly this issue - monitoring, locating, and fixing methane leaks at the source. We will likely see a boom in these types of services in the coming years.?
Oil and gas is here to stay?
Notably, the Inflation Reduction Act poses no real threat to?#oil?and?#gas, as previously feared by the industry. In fact, the legislation paves the way for future drilling, opening up 20 million acres of federal land and 600 million acres of ocean for oil and gas leasing. Without this provision, the Interior Department would be prohibited from releasing new right-of-way grants for solar and wind energy.?
For more of the latest energy news, be on the lookout for our next monthly newsletter.?
VP of KTC LLC
1 年Send me your contact information. We are the sales team for Ballard in the bus market and have sold over 100 40’ transit buses in the US. My phone number is 510-387-8098 [email protected]
Investment Banking: Power, Climate, Infra || Energy Transition || Project Finance || M&A || Exit Strategies || Venture Capital || Private Equity || Helping Leaders Execute Great Deals & Make a Difference.
2 年Thanks for your comment Gabe Pruett -- The way I look at it - politicians from both parties have constituents who support them and also have personal agenda goals. Yes, calling it the Inflation Reduction Act looks to me like spin since Fed policy is likely to have the real impact on inflation. In terms of a persuasion tactic alone, the name was smart. On the energy front, it does a lot of good in a surprisingly balanced way which is, I presume, part of the reason many centrists voted for it. I'm not qualified to comment on the rest of it beyond energy. I have personally supported politicians from both sides during my life and hope we can come together at some point around a common set of values.
CEO/Owner Anvil Environmental
2 年So basically you are saying the "Inflation Reduction Act" literally has nothing to do with inflation? So in all actuality this is just a massive spending bill the demorats are using to try and push their far left wing agenda which will actually cause more harm to the environment? Yeah this sounds like a great deal hahahahahaha!!!