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.

The DOE has deployed funding for direct air capture, events not to miss, and more things to know this week. Photo via Getty Images

3 things to know this week: 2 energy appointments, DOE doubles down on funding, and more

hou knew?

Editor's note: It's a new week — start it strong with three quick things to know in Houston's energy transition ecosystem. The United States Department of Energy doled out some big money last week, two new energy innovation leaders to know, and an event not to miss this week.

DOE grants millions for carbon capture

A handful of direct air capture projects with ties to Houston just received federal funding. Photo via Getty Images

Last week, there were two different DOE funding stories on EnergyCapital — both about federal funding for direct air capture (DAC) projects.

A subsidiary of Houston-based energy company Occidental snagged a roughly $600 million federal grant to establish a hub south of Corpus Christi that’ll remove carbon emissions from the air. The U.S. Department of Energy’s Office of Clean Energy Demonstrations grant, awarded to Occidental subsidiary 1PointFive, will go toward building the South Texas Direct Air Capture (DAC) Hub. It’ll be located on about 106,000 leased acres within a Kleberg County site at the iconic King Ranch. The hub will comprise 30 individual DAC projects. Read more.

Around the same time, four carbon capture projects with ties to the Houston area were announced to have collectively received more than $10 million in funding from the DOE. Chevron, Fervo Energy, and more were involved in those grants. Read more.

HOU to know in energy transition

Two recent appointments were announced last week. Photos courtesy

Two Houston organizations looking to advance the energy transition named new leaders last week.

Activate named Jeremy Pitts as the Houston managing director this month. The nonprofit, which announced its new Houston program earlier this year, was founded in Berkeley, California, in 2015 to bridge the gap between the federal and public sectors to deploy capital and resources into the innovators creating transformative products. Pitts will lead the program locally, including working with the inaugural cohort, to be determined later this year for 2024. Read more.

After a months-long search, Greentown Labs named its next leader. Kevin Knobloch, who served as chief of staff of the United States Department of Energy in President Barack Obama’s second term, will be CEO of Greentown Labs, effective September 5. In his role, Knobloch will oversee both Greentown locations in Houston and Somerville, Massachusetts, outside of Boston. Read more.

Upcoming events to put on your radar

Plan the rest of your August accordingly.

This week:

  • August 22 — The 2nd Annual Renewable Energy Leadership Conference, hosted by Rice Business Executive Education, voices from leading renewable energy companies, the DOE, and capital providers will gather to discuss the impact the IRA has had on Houston and beyond, and what to expect going forward.
  • August 22-23 — SPE Energy Transition Symposium's goal is to deliver a prominent and dedicated energy transition event by collecting and disseminating the knowledge from industry leaders, technical experts, academicians, practitioners, financial community and ESG leaders, and together through collaboration, advance the conversations, technology and exchanges that will move our industry forward.

Later this month:

  • August 28-30 — Industrial IMMERSIVE Week attracts the most industrial, energy, and engineering tech professionals making investment, strategy and tactical decisions, or building, scaling and executing pioneering XR/3D/Simulations, digital twin, reality capture, edge /spatial computing, AI/ML, connected workforce & IIoT projects within their enterprise.
  • August 30-31 — Carbon & ESG Strategies Conference, presented by Hart Energy, will highlight carbon capture and storage projects and technologies onshore and offshore, direct air capture, enhanced oil recovery, responsibly sourced gas, renewable natural gas, federal funding challenges and insurance issues, ESG initiatives, regulatory concerns and much more.

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Houston innovation leaders secure SBA funding to start equitability-focused energy lab

trying for DEI

A group of Houston's innovation and energy leaders teamed up to establish an initiative supporting equitability in the energy transition.

Impact Hub Houston, a nonprofit incubator and ecosystem builder, partnered with Energy Tech Nexus to establish the Equitable Energy Transition Alliance and Lab to accelerate startup pilots for underserved communities. The initiative announced that it's won the 2024 U.S. Small Business Administration Growth Accelerator Fund Competition, or GAFC, Stage One award.

"We are incredibly honored to be recognized by the SBA alongside our esteemed partners at Energy Tech Nexus," Grace Rodriguez, co-founder and executive director of Impact Hub Houston, says in a news release. "This award validates our shared commitment to building a robust innovation ecosystem in Houston, especially for solutions that advance the Sustainable Development Goals at the critical intersections of industry, innovation, sustainability, and reducing inequality."

The GAFC award, which honors and supports small business research and development, provides $50,000 prize to its winners. The Houston collaboration aligns with the program's theme area of Sustainability and Biotechnology.

“This award offers us a great opportunity to amplify the innovations of Houston’s clean energy and decarbonization pioneers,” adds Juliana Garaizar, founding partner of the Energy Tech Nexus. “By combining Impact Hub Houston’s entrepreneurial resources with Energy Tech Nexus’ deep industry expertise, we can create a truly transformative force for positive change.”

Per the release, Impact Hub Houston and Energy Tech Nexus will use the funding to recruit new partners, strengthen existing alliances, and host impactful events and programs to help sustainable startups access pilots, contracts, and capital to grow.

"SBA’s Growth Accelerator Fund Competition Stage One winners join the SBA’s incredible network of entrepreneurial support organizations contributing to America’s innovative startup ecosystem, ensuring the next generation of science and technology-based innovations scale into thriving businesses," says U.S. SBA Administrator Isabel Casillas Guzman.

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This article originally ran on InnovationMap.

Texas-based Tesla gets China's initial approval of self-driving software

global greenlight

Shares of Tesla stock rallied Monday after the electric vehicle maker's CEO, Elon Musk, paid a surprise visit to Beijing over the weekend and reportedly won tentative approval for its driving software.

Musk met with a senior government official in the Chinese capital Sunday, just as the nation’s carmakers are showing off their latest electric vehicle models at the Beijing auto show.

According to The Wall Street Journal, which cited anonymous sources familiar with the matter, Chinese officials told Tesla that Beijing has tentatively approved the automaker's plan to launch its “Full Self-Driving,” or FSD, software feature in the country.

Although it's called FSD, the software still requires human supervision. On Friday the U.S. government’s auto safety agency said it is investigating whether last year’s recall of Tesla’s Autopilot driving system did enough to make sure drivers pay attention to the road. Tesla has reported 20 more crashes involving Autopilot since the recall, according to the National Highway Traffic Safety Administration.

In afternoon trading, shares in Tesla Inc., which is based in Austin, Texas, surged to end Monday up more than 15% — its biggest one-day jump since February 2020. For the year to date, shares are still down 22%.

Tesla has been contending with its stock slide and slowing production. Last week, the company said its first-quarter net income plunged by more than half, but it touted a newer, cheaper car and a fully autonomous robotaxi as catalysts for future growth.

Wedbush analyst Dan Ives called the news about the Chinese approval a “home run” for Tesla and maintained his “Outperform” rating on the stock.

“We note Tesla has stored all data collected by its Chinese fleet in Shanghai since 2021 as required by regulators in Beijing,” Ives wrote in a note to investors. “If Musk is able to obtain approval from Beijing to transfer data collected in China abroad this would be pivotal around the acceleration of training its algorithms for its autonomous technology globally.”

Houston organization celebrates zero waste goal

earth day win

Discovery Green celebrated Earth Day with a major milestone this year — achieving it’s Zero Waste goal.

The nonprofit, along with Citizens’ Environmental Coalition and Houston Public Works, are announced that the 2024 Green Mountain Energy Earth Day, which generated more than 3,800 pounds of garbage, diverted the majority of that waste from landfills. "Zero Waste," as defined by the Environmental Protection Agency, is successfully diverting at least 90 percent of waste from the landfill.

On Earth Day, Discovery Green composted 2,200 pounds of waste and recycled 1,300 pounds of trash.

“Part of Discovery Green Conservancy’s mission is to serve as a village green for our city and be a source of health and happiness for all. Our goal is to sustain an exceptional environment for nature and people,” Discover Green President Kathryn Lott says in a news release. “We are beyond thrilled to have achieved Zero Waste certification.”

The achievement was made possible by volunteers from the University of Houston – Downtown.

Steve Stelzer, president of Citizens’ Environmental Coalition’s board of directors, acknowledged how rare the achievement is in a public space in a major city like Houston.

“Discovery Green Conservancy stepped up and made a commitment to weigh, measure and record everything. They should be congratulated to have done this at this scale,” Stelzer adds. “The Conservancy said they were going to do it and they did. It’s an amazing accomplishment.”

The 2024 event included:

  • 31,000 visitors in attendance
  • 60 + exhibitors
  • 100 + volunteers
  • 12 artists
    • 9 chalk artists
    • Donkeeboy and Donkeemom
    • Mark Bradford
  • 25 Mark Bradford artworks made of scrap presented in partnership with Houston First
  • 4 short films shown
  • 3,836.7 pounds of waste collected during Green Mountain Energy Earth Day