Discussion on the impact and challenges of the Inflation Reduction Act (IRA), the US's role in the world and friction with allies and competitors, transferability of tax credits in the tax equity market, and the interconnectedness of sectors and convergence of opportunities in the energy transition.
Transmission is surprisingly absent as a funding priority under the IRA, which is a key misconception about the program.
Pump storage hydro and sectors like waste-to-value and water present investment opportunities not covered by the IRA.
Deep dives
Investing in infrastructure for decarbonization
CAI is a fund that invests in large-scale low carbon infrastructure to address climate risks and economic pressures. They focus on projects like pump storage hydro, solar, wind, and waste-to-value.
Misperceptions and challenges with the inflation reduction act (IRA)
Despite being thrilled with the IRA, Bill Green highlights three key misconceptions. Firstly, the absence of transmission as a funding priority is surprising. Secondly, the full treasury guidance and its nuances are yet to be seen. Lastly, the IRA is a tax credit program, not a grant or forgivable loan, which poses challenges for project completion.
Transferability, capacity, and exciting opportunities
Transferability under the IRA is still uncertain and there are concerns about tax equity capacity in the market. Amidst these challenges, pump storage hydro emerges as an exciting opportunity with the inclusion of up to 50% tax credits. Additionally, areas not covered by the IRA, such as waste-to-value and the water sector, present investment potential. The convergence of sectors like green hydrogen and digital infrastructure also creates new opportunities.
Bill Green, managing partner of Climate Adaptive Infrastructure, joins Todd Alexander in a wide-ranging discussion about how the renewable energy market may not be fully appreciating the impact of the Inflation Reduction Act, issues developers are having with financing and with how IRA funds are getting allocated, how the IRA has affected the global market, capacity of the tax equity market and areas that may be opportunities for investment.
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