How did the IRA affect energy transition project development? Experts discussed the positive impacts — as well as the challenges still to overcome. Photo courtesy of Renewable Energy Alliance Houston

It's been officially a year since the Inflation Reduction Act was enacted, so it's no surprise that looking at the IRA's impact dominated the discussion at a recent industry event.

The second annual Renewable Energy Leadership Conference, presented by Renewable Energy Alliance Houston and Rice Business Executive Education, featured thought leadership from 20 experts on Tuesday, August 22. While some panels zeroed in on hiring and loan options for energy transition companies, the day's program kicked off with a couple panels looking both back and forward on the IRA.

When looking at the IRA's impact, the experts identified a few key things. Here's what they said at the conference.

Going beyond tax credits and regulation

Greg Matlock, EY's global energy and resources industry tax leader, kicked off the IRA discussion after John Berger, CEO of Sunnova, gave a keynote address.

Matlock set the scene for the IRA, explaining that previous legislation incentivizing clean energy changes mostly stayed within regulation and tax credits. Credits as a tax policy fail to incentivize organizations that are, for various reasons, are tax exempt or are already paying insignificant taxes. The fundamental switch of the IRA was to a "want to" rather than a "have to."

"Everyone has had aspirations, but with aspirations without capital, it's hard to get movement," Matlock says. "But what the IRA did was create a liquidity in the market and added access to an investor base. Now you're pairing aspirations and capital, and now you're seeing movement in the market."

The IRA, Matlock continues, also got the ball rolling on expanding requirements for tax incentives. Previously, a specific technology has to be clearly identified to be qualified for a credit. Moving forward, the IRA improved this qualification process and in the future, there will be be technology neutral incentives.

One thing Matlock also highlighted was the limitations of tax credits — dollar for dollar credit.

"Two years ago, if you called an organization that was tax exempt (about) a project that generates tax credits, why would that want that?" Matlock says. "For the first time, you can sell federal tax credits — not all of them — for cash and tax free to businesses who are paying taxes."

Explaining that there are limitations, Matlock says this process had a significant impact encouraging movement in this space — especially from surprising sources.

"We're seeing companies that have absolutely no connectivity to our energy industry making investments through the purchase of tax credits to fund the development of projects," Matlock says.

A focus on carbon capture and hydrogen

Matlock continues to explain how carbon capture and hydrogen became two case studies for the impact of the IRA.

Prior to the IRA, over 16 countries incentivized hydrogen production, he explains, and the United States was not one of them.

"With the signing of the IRA, we went from the worst to the first," Matlock says.

Carbon capture development was directed more at traditional energy industries. The IRA enactment represented a switch for these companies from regulatory moves to incentivization, which has been more effective in general, Matlock says.

Over the past year, according to the American Clean Power Association, more than $271 billion in investment in clean energy projects has occurred since the IRA was enacted. When it comes to jobs, over 170,000 clean energy jobs have been announced since the IRA.

Problematic permitting and pricing volatility 

In a subsequent panel, the three thought leaders looked at the IRA a bit more critically. While the IRA spurred momentum, it also shined a spotlight on some of the industry's challenges.

"The IRA for developers has been very positive. It provided certainty and allowed developers and investors alike to plan long term," says Omar Aboudaher, senior vice president of development for Leeward Renewable Energy. "With that comes challenges, including exacerbating some existing problems with permitting."

Aboudaher explains that the IRA-inspired burst of projects has caused a lot more permits for the increase of development. And, he adds, there's not a concentrated effort. It's happening in silos on the various levels of government.

"On the permitting side, there's a big need to streamline permitting," Aboudaher says. "In some parts of the country, it can take 6 to 10 years to permit your project."

On the investor side, it's also a problem, adds Fred Day, managing director of investments at Brookfield Asset Management.

"Even though we have this IRA, a lack of permitting reform does create a bottleneck," he says.

Another challenge is a disconnect between supply and demand. While the IRA has incentivized solar energy generation per hour of energy, meaning that its cheaper than ever to make energy via solar panels, there's not yet the demand infrastructure for this energy. This incentivization structure has already been in place for wind power.

"I think it's going to be a real problem. It's a real problem with wind today," Doug Moorehead, COO of Broad Reach Power, says, explaining that there's volatility in pricing. "When the wind is high, prices are really low. When wind is low, prices are high."

All of this is leading to an imbalance of market demand and supply, he continues. Jessica Adkins, partner at Sidley Austin LLP and moderator, adds that there's built in volatility for solar since solar energy is confined to the time of day when the sun is out.

"Any time you're incentivize to produce regardless of demand, it's going to be an issue," Moorehead says.

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CenterPoint launches $65B capital improvement plan

grid growth

To support rising demand for power, Houston-based utility company CenterPoint Energy has launched a $65 billion, 10-year capital improvement plan.

CenterPoint said that in its four-state service territory — Texas, Indiana, Minnesota and Ohio — the money will go toward building and maintaining a “resilient” electric grid and a safe natural gas system.

In the Houston area, CenterPoint forecasts peak demand for electricity will increase nearly 50 percent, to almost 31 gigawatts, by 2031 and peak demand will climb to almost 42 gigawatts by the middle of the next decade. CenterPoint provides energy to nearly 2.8 million customers in the Houston area.

In addition to the $65 billion capital improvement budget, which is almost 40 percent higher than the 2021 budget, CenterPoint has identified more than $10 billion in investment opportunities that could further improve electric and natural gas service.

“Every investment we make at CenterPoint is in service of our approximately seven million metered customers we have the privilege to serve,” CenterPoint president and CEO Jason Wells said in a news release.

“With our customer-driven yet conservative approach to growth, we continue to see significant potential for even more investment for the benefit of our customers that is not yet reflected in our new plan,” he added.

UH projects propose innovative reuse of wind turbines and more on Gulf Coast

Forward-thinking

Two University of Houston science projects have been selected as finalists for the Gulf Futures Challenge, which will award a total of $50 million to develop ideas that help benefit the Gulf Coast.

Sponsored by the National Academies of Science, Engineering and Medicine’s Gulf Coast Research Program and Lever for Change, the competition is designed to spark innovation around problems in the Gulf Coast, such as rising sea levels, pollution, energy security, and community resiliency. The two UH projects beat out 162 entries from organizations based in Alabama, Florida, Louisiana, Mississippi, and Texas.

“Being named a finalist for this highly competitive grant underscores the University of Houston’s role as a leading research institution committed to addressing the most pressing challenges facing our region,” said Claudia Neuhauser, vice president for research at UH.

“This opportunity affirms the strength of our faculty and researchers and highlights UH’s capacity to deliver innovative solutions that will ensure the long-term stability and resilience of the Gulf Coast.”

One project, spearheaded by the UH Repurposing Offshore Infrastructure for Continued Energy (ROICE) program, is studying ways to use decommissioned oil rig platforms in the Gulf of Mexico as both clean energy hydrogen power generators as well a marine habitats. There are currently thousands of such platforms in the Gulf.

The other project involves the innovative recycling of wind turbines into seawall and coastal habitats. Broken and abandoned wind turbine blades have traditionally been thought to be non-recyclable and end up taking up incredible space in landfills. Headed by a partnership between UH, Tulane University, the University of Texas Health Science Center at Houston, the city of Galveston and other organizations, this initiative could vastly reduce the waste associated with wind farm technology.

wind turbine recycled for Gulf Coast seawall.Wind turbines would be repurposed into seawalls and more. Courtesy rendering

"Coastal communities face escalating threats from climate change — land erosion, structural corrosion, property damage and negative health impacts,” said Gangbing Song, Moores Professor of Mechanical and Aerospace Engineering at UH and the lead investigator for both projects.

“Leveraging the durability and anti-corrosive properties of these of decommissioned wind turbine blades, we will build coastal structures, improve green spaces and advance the resilience and health of Gulf Coast communities through integrated research, education and outreach.”

The two projects have received a development grant of $300,000 as a prize for making it to the finals. When the winner are announced in early 2026, two of the projects will net $20 million each to bring their vision to life, with the rest earning a consolation prize of $875,000, in additional project support.

In the event that UH doesn't grab the grand prize, the school's scientific innovation will earn a guaranteed $1.75 million for the betterment of the Gulf Coast.

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This article originally appeared on CultureMap.com.

ERCOT steps up grid innovation efforts to support growing power demand

grid boost

As AI data centers gobble up more electricity, the Electric Reliability Council of Texas (ERCOT) — whose grid supplies power to 90 percent of Texas — has launched an initiative to help meet challenges presented by an increasingly strained power grid.

ERCOT, based in the Austin suburb of Taylor, said its new Grid Research, Innovation, and Transformation (GRIT) initiative will tackle research and prototyping of emerging technology and concepts to “deeply understand the implications of rapid grid and technology evolution, positioning ERCOT to lead in the future energy landscape.”

“As the ERCOT grid continues to rapidly evolve, we are seeing greater interest from industry and academia to collaborate on new tools and innovative technologies to advance the reliability needs of tomorrow’s energy systems,” ERCOT President and CEO Pablo Vegas said in a news release. “These efforts will provide an opportunity to share ideas and bring new innovations forward, as we work together to lead the evolution and expansion of the electric power grid.”

In conjunction with the GRIT initiative, ERCOT launched the Research and Innovation Partnership Engagement (RIPE) program. The program enables partners to work with ERCOT on developing technology aimed at resolving grid challenges.

To capitalize on ideas for grid improvements, the organization will host its third annual ERCOT Innovation Summit on March 31 in Round Rock. The summit “brings together thought leaders across the energy research and innovation ecosystem to explore solutions that use innovation to impact grid transformation,” ERCOT said.

“As the depth of information and industry collaboration evolves, we will continue to enhance the GRIT webpages to create a dynamic and valuable resource for the broader industry to continue fostering strong collaboration and innovation with our stakeholders,” said Venkat Tirupati, ERCOT’s vice president of DevOps and grid transformation.

ERCOT’s GRIT initiative comes at a time when the U.S. is girding for heightened demand for power, due in large part to the rise of data centers catering to the AI boom.

A study released in 2024 by the Electric Power Research Institute (EPRI) predicted electricity for data centers could represent as much as 9.1 percent of total power usage in the U.S. by 2030. According to EPRI, the share of Texas electricity consumed by data centers could climb from 4.6 percent in 2023 to almost 11 percent by 2030.

A report issued in 2024 by the federal government’s Lawrence Berkeley National Laboratory envisions an even faster increase in data-center power usage. The report projected data centers will consume as much as 12 percent of U.S. electricity by 2028, up from 4.4 percent in 2023.

In 2023, the EPRI study estimated, 80 percent of the U.S. electrical load for data centers was concentrated in two states, led by Virginia and Texas. The University of Texas at Austin’s Center for Media Engagement reported in July that Texas is home to 350 data centers, second only to Virginia.

“The U.S. electricity sector is working hard to meet the growing demands of data centers, transportation electrification, crypto-mining, and industrial onshoring, while balancing decarbonization efforts,” David Porter, EPRI’s vice president of electrification and sustainable energy strategy, said. “The data center boom requires closer collaboration between large data center owners and developers, utilities, government, and other stakeholders to ensure that we can power the needs of AI while maintaining reliable, affordable power to all customers.”