Which is the greatest challenge the world is facing in its journey to hit the 1.5 degree climate target?
Our goal is to have 100% clean power on our electric grid by 2035. That means we must deploy, deploy, deploy existing cheap clean energy sources like wind, solar and hydropower that are ready for installation today. In addition, we must act with urgency to commercialize the next generation of decarbonization technologies, such as clean hydrogen, carbon dioxide removal and enhanced geothermal in a manner that is sensitive to communities and their unique needs.
How do you expect the IRA to create a ripple effect and incentivize decarbonization in the U.S. and around the globe?
President Biden’s agenda (which includes the Inflation Reduction Act and the Bipartisan Infrastructure Law) is the most historic legislation any country has taken on climate and will collectively do most of the work necessary to not just meet the President’s aggressive climate goals, but also build a whole new clean energy economy.
Fatih Birol, Executive Director of the International Energy Agency, recently called the Inflation Reduction Act the “single most important action” for climate since the Paris Agreement. If the U.S. can act boldly, other countries may feel emboldened to do so as well.
These laws will provide over a half a trillion dollars in new clean energy investments, and most also require significant investment from the private sector. That level of investment will propel clean energy deployment and innovation like never before. It will significantly bring down costs for zero carbon technologies, which in turn will benefit not just the U.S., but the entire world.
How rapidly do you think the onshoring of supply chains will take place in the U.S. and where do you see your critical minerals supply chains shifting towards?
With massive incentives to invest in U.S. manufacturing from President Biden’s agenda, we are already seeing dozens of new onshoring investments from the private sector, like new clean energy factories and operations from companies like First Solar, Micron, Toyota, Panasonic and others. In the coming weeks, we’ll be announcing the first major manufacturing investments from the Bipartisan Infrastructure Law, spurring battery manufacturing and supply chain build-up across the county – including in critical minerals and materials, an area our Loan Programs Office has already been investing to kick-start. The IRA will add billions to this investment, across an array of clean energy technologies. So the onshoring is already taking place, and will only accelerate.
How will the IRA mitigate the risk that companies take when investing in new green technologies and innovation that may or may not bear fruit?
The IRA is expected to incentivize faster deployment of existing technology. But both the Bipartisan Infrastructure Law and the IRA invest as well in commercializing new, promising and vetted technologies. The new funding streams in BIL are competitively bid, peer reviewed by experts, require private sector matching dollars, and are actively overseen by subject area professionals. While chances are not every project will succeed, DOE is working to make sure that every project will be chosen and supported to maximize the likelihood of success.
