Our country is once again in a race. But this time, the stakes are much higher than previous global clashes like the space race. Our planet is at risk, as it is under attack by greenhouse gas emissions. To win, the United States (U.S.) must reach the long-term net-zero emissions strategy by 2050 set at United Nations Framework Convention. Achieving it will require actions in many industries, especially in the energy and electricity generation sectors.
The generation of electricity is the second largest contributor to greenhouse gas emissions at 25%, according to the U. S. Environmental Protection Agency (EPA). Of the fuels used to generate power, natural gas is the leader at 38%, followed by coal at 22%, according to the U.S. Energy Information Administration.
Carbon Pollution-free is Mandated by 2035
Companies who use these fuels—like utilities—have a mandate to become carbon pollution-free by 2035. “Carbon sequestration will fall largely to them and the green, greener energy, and renewables,” according to Mary Turner, senior consultant, air permitting and compliance, at Verdantas, an environmental consulting company.
“The strategy supports more auditing and reporting for those companies,” Turner said. “It means more eyes on your operations, more scrutiny, which brings more audits and issues.” It will continue to become more challenging to comply with air quality standards from the EPA and other agencies. It will require capital investments by many companies in equipment and advaned pollution control technologies to meet compliance requirements. “You'll have to meet more stringent specifications for the quality of air exhausting from your emission sources and increase the monitoring frequency of many pollutants,” according to Turner.
"It will continue to become more challenging to comply with air quality standards from the EPA and other agencies." – Mary Turner, Senior Consultant at Verdantas
IRA Makes Available Assistance for Utilities Companies
Financial help is available for electricity-generating companies to reach emissions mandates, goals, and compliance from the Inflation Reduction Act (IRA). The law includes $550 billion in climate change funding with several provisions to accelerate clean energy deployment in the U.S. The bill extends and expands production tax credits (PTC) and investment tax credits (ITC) for a zero-emitting generation.
IRA provides a credit of up to 2.5 cents per kilowatt-hour (kWh) or up to 30% of eligible investment costs for new clean electricity generating facilities. It does it by extending existing PTC and ITC statutes through 2026 and then under a new clean electricity PTC and ITC thereafter. The bill speeds up the shift from coal to clean energy and supports a transition by providing $5 billion to back $250 billion in low-cost loans for utilities to reduce coal debt and reinvest in clean technologies. Another provision provides $9.7 billion in financial assistance for rural electric cooperatives to move toward clean energy sources.
For many utilities companies, the IRA will be a game-changer. It will not only reduce emissions but enable them to make improvements in energy security, reliability, independence, and sustainability. Getting the most out of the IRA opportunities for your company may take seeking help from a consulting company like Verdantas.
The experts at Verdantas are knowledgeable and experienced in deciphering, navigating, and using government programs. Plus, they have engineering, planning, science, and technology expertise. "We can help you with any compliance questions ahead of a clean energy project or an environmental audit," Turner said.
U.S. electricity-generating companies reaching net-zero, along with other initiatives like eliminating deforestation from its supply chain and transitioning to 100% renewable energy, will bring climate stability and a winning situation.
Wondering how you can get the most from IRA funding opportunities? Verdantas consultants are available to help you develop winning strategies and compliance regimens. Contact us to get a conversation started.
- United States Environmental Protection Agency, Sources of Greenhouse Gas Emissions
- Aug 24, 2022, Forbes.com, Inflation Reduction Act Benefits: Billions In Just Transition Funding For Coal Communities
- February 9, 2022, rhg.com, Assessing the Costs and Benefits of Clean Electricity Tax Credits,
- U.S. Energy Information Administration, Electricity Explained
- August 18, 2022, E Source, What does the Inflation Reduction Act mean for utilities?
- October 14, 2021, McKinsey & Company, Net zero by 2035: A pathway to rapidly decarbonize the US power system
- Deloitte, Low Carbon Emissions Hubs
Learn how we're helping our clients build a better tomorrow
Sign up to get relevant topics from Verdantas delivered right to your inbox