07/26/2023
The recent debate leading up to the extension of the nation’s debt ceiling brought renewed opposition to the IRA, with opponents taking aim at the $391B in tax credits made available by the legislation. Yet, when the Fiscal Responsibility Act of 2023 was signed on June 3, the unprecedented climate funding remained intact. Sources close to the discussions agree that the IRA was never really put on the negotiating table.
In passing this first test, the IRA has scored another victory in catalyzing the relatively nascent cleantech industry. While the policy landscape isn’t completely unchanged as a result of the debt ceiling deal – most notably a rollback of funding for the IRS, which will regulate and administer the vast quantity of tax credits – Biden’s key piece of legislation was mostly unscathed. The IRA’s effect on employment (and inflation) metrics is set to take shape in the coming months with $83B worth of projects announced since its passing and the introduction of permitting reform within this Fiscal Responsibility Act. Experts agree that the tax incentives are a key tailwind for domestic manufacturing jobs, notably in states like Georgia, North Carolina, and Tennessee. Adding further rigidity and actionability, the law’s accompanying IRS guidance has been emerging over the past weeks: prevailing wage and apprenticeship requirements, hydrogen PTCs, and PTCs for advanced manufacturing.
At NER we continue to accelerate the deployment of several disruptive low-carbon technologies that stand to take advantage of the IRA. Last month, we announced a performance warranty backstop program for Yilkins, whose patented drying and torrefaction technology standardizes the organic biomass supply chain. This program will allow them to scale directly into applications in several of NER’s core sectors: industrial heat and power, green hydrogen, and sustainable aviation fuels. We expect to see more and more such crafted insurance products enable sustainable solutions, now that the IRA is starting to take flight.
🤝 INNER CIRCLE: Changes on the Team
Britti Paudyal will be joining Richard Riley and Ben Cader-Beutel on the Business Development team this summer focusing on the current state of low-carbon project financing and potential new sectors for New Energy Risk. She brings a global perspective on the energy transition from her studies at Minerva University, where she is pursuing a degree in Climate Science while spending semesters in seven cities across the world.
From Britti: “Keeping up with industry trends in cleantech, project finance, and US federal developments aimed at reducing emissions has been an exhilarating experience. The opportunity to contribute to a low-carbon future is greater than ever, and I am pleased to be able to learn and respond to this need alongside a team that strives for excellence at NER.”
For those interested in helping us underwrite a greener future, keep an eye on our hiring page as we’ll be posting new positions soon.
🗨️ TALK NERDY TO ME: Musings From the Team
When we look up from our risk models, our team has a lot to say about topics that pique our interest and hopefully yours. (Keep up with our writing anytime on our blog.)
A Guide to GasificationBack in May our Managing Director of Technical Diligence, Brad Price, published his latest piece in a series about innovation in the process industry. Learn about the long history of gasification and how it is being refined and applied to a sustainable economy.
📰 GENERAL INTEREST: What Our Team Found Insightful
⚡️ Gridlock?
A summary of the organizational dynamics of grid reliability and the challenges of deploying vast quantities of intermittent renewable generation.
🔋 The Battery Belt
Canary Media’s US-manufacturing focus takes a look at the impact of the IRA – 44 weeks in – and key hotspots in the country going forward.
🌊 Tidal (not Jay-Z’s streaming service)
On The Interchange Recharged, insight into a nascent industry to harness energy from (the other) 70% of our planet’s surface. Minutes 16-19 articulate a common problem among breakthrough tech – sound familiar?
🍰 Let them eat cake
A baker’s guide to battery slurry rheology.
🌎 Political Risk Insurance From the World Bank
“The World Bank plans to offer insurance to investors in carbon offset projects in developing countries, to protect against the risk that government intervention could wreck their expected returns.”
📅 CONFERENCE CORNER: See You Out There
These are some of the events on our radar; let us know if you will be attending or what other conferences you would recommend:
Women in Insurance Tech – ALTAWORLD, Sept. 7-8, Boston
North American Biofuels, LCFS, and Carbon Markets Summit – ARGUS, Sept. 11-13, Monterey
RE+ – SPI and ESI, Sept. 11-14, Las Vegas
🎂 GARNERING MOMENTUM: Celebrating New Office Space in San Francisco
