Increase in clean energy projects after passage of climate bill

Wind turbines at Mount Storm Wind Farm near Dominion Mount Storm Generating Station in Mount Storm, West Virginia on August 22, 2022. Chip Somodevilla/Getty Images

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Since the Democrats passed Inflation Reduction Act – which provides $369 for climate and energy spending, including incentives for renewable energy and programs to reduce pollution and address the disproportionate damage caused to disadvantaged communities by climate change – many companies have announced plans for expensive expenses clean energy projectsreported the New York Times.

Global investment in clean energy is expected to reach $1.4 trillion this year, according to the latest report from the International Energy Agency (IEA). Annual Report on global energy investment, accounting for nearly three-quarters of the overall increase in energy investment.

The average annual growth rate of global investments in renewable energy has increased from just over 2% in 2015, following the Paris climate agreements, to 12% since 2020.

“Renewable energy is at the heart of the positive trend; even though costs have increased in recent months, clean technologies such as wind and solar PV remain the cheapest option for new power generation in many countries, even before taking into account exceptionally high prices observed in 2022 for coal and gas. Renewables, grids and storage now account for more than 80% of total investments in the electricity sector,” the IEA report states.

One example of big business investing in renewable energy is the joint agreement between Honda and LG Energy Solution to build a $4.4 billion factory to produce batteries for electric vehicles (EVs), the New York reported. Times. The batteries will not be produced at the factory until 2025.

Mining company Piedmont Lithium also said it would build a lithium processing plant for use in batteries to reduce the United States’ reliance on refineries in China.

Additionally, First Solar intends to invest up to $1.2 billion for its fourth U.S. plant, largely thanks to incentives for renewable energy investment in climate legislation.

“We’ve seen a surge of interest from all kinds of companies,” said Isaac Chan, a partner at management consultancy Roland Berger which advises clients in the automotive industry, as reported by the New York Times. Chan said the climate package “improves the calculation to produce in North America instead of making electric vehicles in Asia and importing them.”

According to industry representatives and analysts, building the infrastructure needed to provide the country with renewable energy and meet its climate goals remains a challenge.

Farmers and landowners, as well as businesses and environmentalists, are concerned about power lines crossing farmland and offshore wind farms being installed near fisheries.

The raw materials needed to manufacture the batteries also present obstacles. While many provisions of the law aim to incentivize battery and vehicle producers to buy materials like lithium and nickel from North American distributors or U.S. trade allies, only There is only one lithium mine in the United States, operated by Albemarle, and it produces only a fraction of what is needed by the automotive industry. Lithium must also be refined overseas.

Albemarle’s goal of establishing U.S. refineries and other mining developments will be aided by funding for climate legislation, said Albemarle Vice President for Government and Community Affairs Ellen Lenny-Pessagno , as reported by the New York Times.

The Climate Bill’s requirements for how much of a battery’s raw materials and components must come from the United States or its trading allies are getting stricter over time.

Electric vehicles could end up being cheaper than gasoline-powered cars once supply chains are reworked and meet the provisions of the new law.

“This legislation is a real game changer. It will create jobs, reduce costs, increase America’s competitiveness, reduce air pollution,” the former vice president said. Al Gore, as reported by the Associated Press. “The momentum that will come from this legislation cannot be underestimated.”

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