US At Risk Of Falling Behind RE Target Post-IRA: Report

A collaborative report on clean energy released by the Rhodium Group, in partnership with the Massachusetts Institute of Technology (MIT), states that despite reaching record levels of investment in utility-scale clean electricity generation and storage capacity in 2023, the US has a risk of falling behind post-IRA (Inflation Reduction Act) projections.

While renewable electricity has become cost-competitive with coal and natural gas, the report identifies non-cost barriers such as siting and permitting delays, grid interconnect queues, and supply chain challenges as significant hurdles to achieving full clean energy deployment and emissions reduction potential by 2030.

Drawing upon data from Energy Innovation (EI), the REPEAT Project at Princeton University, and Rhodium Group, the report forecasts a 37-42% reduction in US net greenhouse gas (GHG) emissions by 2030 relative to 2005 levels. It aligns closely with the IRA’s objective of a 40% reduction. However, it notes that current trends fall short of the capacity needed to achieve these targets, with an estimated 60 to 127 GW of capacity required to be added in 2024 alone.

In the realm of electric vehicles (EVs), while growth rates in Q4 and dealer inventory levels suggest a potential slowdown in 2024 compared to the remarkable 50% growth experienced in 2023, sustained year-over-year sales growth of 50% is projected. However, this growth rate, while significant, is not deemed essential to meet the legislation’s emissions reduction goals. The report anticipates a gradual decrease in the growth rate of zero-emission vehicle (ZEV) sales from 2024 to 2030.

Despite the positive trajectory in ZEV sales, the expansion of utility-scale clean electricity falls short of expectations. The report notes a record addition of 32.3 GW of zero-carbon electricity generation and storage capacity in 2023, primarily driven by solar PV, battery storage, and wind power. However, this pace of expansion is insufficient to meet projections aligned with emission reduction goals under the IRA and the Paris Agreement.

Looking ahead, the report emphasizes the need for accelerated clean energy deployment to stay on course with emission reduction targets beyond 2024. While acknowledging progress in certain areas, particularly in ZEV sales, it underscores the importance of addressing barriers and scaling up investments to realize the full potential of clean energy and transportation initiatives in the US.