Power Sector Impacts of the Inflation Reduction Act of 2022
This paper investigates potential impacts of the Inflation Reduction Act on the power sector, which is the focus of many of the law's core provisions.
Abstract
The Inflation Reduction Act (IRA) is regarded as the most prominent piece of federal climate legislation in the United States thus far. This paper investigates potential impacts of IRA on the power sector, which is the focus of many core IRA provisions. We summarize a multi-model comparison of IRA to identify robust findings and variation in power sector investments, emissions, and costs across 11 models of the US energy system and electricity sector. Our results project that IRA incentives accelerate the deployment of low-emitting capacity, increasing average annual additions by up to 3.2 times current levels through 2035. CO2 emissions reductions from electricity generation across models range from 47 percent–83 percent below 2005 in 2030 (68 percent average) and 66 percent–87 percent in 2035 (78 percent average). Our higher clean electricity deployment and lower emissions under IRA, compared with earlier US modeling, change the baseline for future policymaking and analysis. IRA helps to bring projected US power sector and economy-wide emissions closer to near-term climate targets; however, no models indicate that these targets will be met with IRA alone, which suggests that additional policies, incentives, and private sector actions are needed.
Authors
John ET Bistline
Electric Power Research Institute
Maxwell Brown
National Renewable Energy Laboratory
Cara Marcy
US Environmental Protection Agency
Geoffrey Blanford
Electric Power Research Institute
Jamil Fabres
Evolved Energy Research
Allen Fawcett
US Environmental Protection Agency
Anne Hamilton
National Renewable Energy Laboratory
Jesse Jenkins
Princeton University
Ryan Jones
Evolved Energy Research
Ben King
Rhodium Group
Hannah Kolus
Rhodium Group
John Larsen
Rhodium Group
Amanda Levin
Natural Resources Defense Council
Megan Mahajan
Energy Innovation
Erin Mayfield
Dartmouth College
James McFarland
US Environmental Protection Agency
Haewon McJeon
KAIST Graduate School of Green Growth and Sustainability
Robbie Orvis
Energy Innovation
Neha Patankar
Binghamton University
Christopher Roney
Electric Power Research Institute
Greg Schivley
Princeton University
Daniel Steinberg
National Renewable Energy Laboratory
Nadejda Victor
National Energy Technology Laboratory
Shelley Wenzel
Energy Innovation
John Weyant
Stanford University
Ryan Wiser
Lawrence Berkeley National Laboratory
Mei Yuan
MIT Joint Program on the Science and Policy of Global Change
Alicia Zhao
Center for Global Sustainability, University of Maryland
