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.

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Nov. 30, 2023


John ET Bistline, Maxwell Brown, Maya Domeshek, Cara Marcy, Nicholas Roy, Geoffrey Blanford, Dallas Burtraw, Jamil Fabres, Allen Fawcett, Anne Hamilton, Jesse Jenkins, Ryan Jones, Ben King, Hannah Kolus, John Larsen, Amanda Levin, Megan Mahajan, Erin Mayfield, James McFarland, Haewon McJeon, Robbie Orvis, Neha Patankar, Kevin Rennert, Sally Robson, Christopher Roney, Ethan Russell, Greg Schivley, Daniel Shawhan, Daniel Steinberg, Nadejda Victor, Shelley Wenzel, John Weyant, Ryan Wiser, Mei Yuan, and Alicia Zhao


Journal Article in Environmental Research Letters

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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.


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

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