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.

Ad Placement 300x100
Ad Placement 300x600

CultureMap Emails are Awesome

Gold H2 harvests clean hydrogen from depleted California reservoirs in first field trial

breakthrough trial

Houston climatech company Gold H2 completed its first field trial that demonstrates subsurface bio-stimulated hydrogen production, which leverages microbiology and existing infrastructure to produce clean hydrogen.

Gold H2 is a spinoff of another Houston biotech company, Cemvita.

“When we compare our tech to the rest of the stack, I think we blow the competition out of the water," Prabhdeep Singh Sekhon, CEO of Gold H2 Sekhon previously told Energy Capital.

The project represented the first-of-its-kind application of Gold H2’s proprietary biotechnology, which generates hydrogen from depleted oil reservoirs, eliminating the need for new drilling, electrolysis or energy-intensive surface facilities. The Woodlands-based ChampionX LLC served as the oilfield services provider, and the trial was conducted in an oilfield in California’s San Joaquin Basin.

According to the company, Gold H2’s technology could yield up to 250 billion kilograms of low-carbon hydrogen, which is estimated to provide enough clean power to Los Angeles for over 50 years and avoid roughly 1 billion metric tons of CO2 equivalent.

“This field trial is tangible proof. We’ve taken a climate liability and turned it into a scalable, low-cost hydrogen solution,” Sekhon said in a news release. “It’s a new blueprint for decarbonization, built for speed, affordability, and global impact.”

Highlights of the trial include:

  • First-ever demonstration of biologically stimulated hydrogen generation at commercial field scale with unprecedented results of 40 percent H2 in the gas stream.
  • Demonstrated how end-of-life oilfield liabilities can be repurposed into hydrogen-producing assets.
  • The trial achieved 400,000 ppm of hydrogen in produced gases, which, according to the company,y is an “unprecedented concentration for a huff-and-puff style operation and a strong indicator of just how robust the process can perform under real-world conditions.”
  • The field trial marked readiness for commercial deployment with targeted hydrogen production costs below $0.50/kg.

“This breakthrough isn’t just a step forward, it’s a leap toward climate impact at scale,” Jillian Evanko, CEO and president at Chart Industries Inc., Gold H2 investor and advisor, added in the release. “By turning depleted oil fields into clean hydrogen generators, Gold H2 has provided a roadmap to produce low-cost, low-carbon energy using the very infrastructure that powered the last century. This changes the game for how the world can decarbonize heavy industry, power grids, and economies, faster and more affordably than we ever thought possible.”

Rice University spinout lands $500K NSF grant to boost chip sustainability

cooler computing

HEXAspec, a spinout from Rice University's Liu Idea Lab for Innovation and Entrepreneurship, was recently awarded a $500,000 National Science Foundation Partnership for Innovation grant.

The team says it will use the funding to continue enhancing semiconductor chips’ thermal conductivity to boost computing power. According to a release from Rice, HEXAspec has developed breakthrough inorganic fillers that allow graphic processing units (GPUs) to use less water and electricity and generate less heat.

The technology has major implications for the future of computing with AI sustainably.

“With the huge scale of investment in new computing infrastructure, the problem of managing the heat produced by these GPUs and semiconductors has grown exponentially. We’re excited to use this award to further our material to meet the needs of existing and emerging industry partners and unlock a new era of computing,” HEXAspec co-founder Tianshu Zhai said in the release.

HEXAspec was founded by Zhai and Chen-Yang Lin, who both participated in the Rice Innovation Fellows program. A third co-founder, Jing Zhang, also worked as a postdoctoral researcher and a research scientist at Rice, according to HEXAspec's website.

The HEXASpec team won the Liu Idea Lab for Innovation and Entrepreneurship's H. Albert Napier Rice Launch Challenge in 2024. More recently, it also won this year's Energy Venture Day and Pitch Competition during CERAWeek in the TEX-E student track, taking home $25,000.

"The grant from the NSF is a game-changer, accelerating the path to market for this transformative technology," Kyle Judah, executive director of Lilie, added in the release.

---

This article originally ran on InnovationMap.