Analyzing the Inflation Reduction Act and the Bipartisan Infrastructure Law for Their Effects on Nuclear Cost Data
Decarbonizing to meet aggressive climate change mitigation targets requires energy transition within all sectors. In the industrial sector, emissions will need to decrease by 65–90% by 2050 to avert global warming greater than 1.5°C (IPCC 2022). The Inflation Reduction Act (IRA), Bipartisan Infrastructure Law (BIL), and Defense Production Act (DPA) have clean energy requirements and provide financial incentives to accelerate the use of clean energy technologies in the industrial sector. It is important to note that IRA is the most extensive action ever taken by Congress and the U.S. government to combat climate change (US CBO 2021, 2022). The energy system provisions comprise most of the estimated climate and energy support. A better understanding of those provisions in the above mentioned acts and laws is crucial to assessing their impact on the equivalent energy costs to the power plant owners (impact on net revenue in $/MWh) across different energy technologies, market deployment potential offered to different energy technologies applications, and energy system research modeling. The purpose of the report is to shed light on IRA and BIL provisions with particular attention to impacts on the nuclear industry. The report also seeks to understand potential equivalent energy cost savings for nuclear energy technologies from other laws and programs in conjunction with IRA, BIL, loan program guarantees, and DPA. The report reviews recent legislation on energy policy and translates that policy to impacts on equivalent nuclear costs for the purpose of modeling policy in energy scenarios.