Previous discussions focused on the implementation challenges that come after and flow from the Inflation Reduction Act (IRA).  The murky picture of a few months ago has been changing with expanded analysis of just what the Act entails and how, and how long, raising as many questions as it has provided answers.  Recent news suggests that the scope could be much larger.  The Wall Street Journal reported that “a Goldman Sachs report projects its myriad green subsidies will cost $1.2 trillion—more than three times what the law’s supporters claimed.”  The funnel for this spending will operate through the Department of the Treasury rather than the energy regulatory institutions.  And there is more news unfolding about the scope of the duration of the major subsidies as Treasury issues new guidance on subsidy eligibility.  How will this expanded scale and better understanding of the mechanisms affect developments in energy and electricity markets?  Will choices for subsidies through investment tax credits versus production tax credits differentially affect the operation of markets?  How does the unfolding understanding of the details of the IRA affect the many implementation challenges such as the scope and type of transmission expansion?  Does the change in the scale and scope raise a new set of unintended consequences? 

Speakers:

Catherine Wolfram, Visiting Professor, Harvard Kennedy School; Deputy Assistant Secretary for Climate and Energy Economics, U.S. Treasury, 2021-2022

John Bistline, Program Manager, Energy Systems and Climate Analysis Group, EPRI

Joseph Bowring, President, Monitoring Analytics

Caleb Stephenson, Executive Vice President, Commercial Operations, Calpine

Suggested Reading:

John Bistline, Neil Mehrota, and Catherine Wolfram.  "Economic implications of the climate provisions of the Inflation Reduction Act."  Brookings Institution, March 2023.

EPRI.  "Power Plant Performance Standards and Tax Credit Interactions:  Impacts of Design Decisions and the Inflation Reduction Act on the U.S. Power Sector."  March 2023.