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Inflation Reduction Act Clean Energy drives EV adoption and renewable power, but grid interconnection, permitting, and supply chain bottlenecks slow wind, solar, and offshore projects, risking emissions targets despite domestic manufacturing growth and tax incentives.

Key Points

An IRA push to scale EVs and renewables, meeting EV goals but lagging wind and solar amid grid and permitting delays.

✅ EV sales up 50%, 9.2% of 2023 new cars; growth may moderate.

✅ 32.3 GW added, below 46-79 GW/year needed for climate targets.

✅ Grid, permitting, and supply chain delays bottleneck wind and solar.

A year and a half following President Biden's enactment of an ambitious climate change bill, the landscape of the United States' clean energy transition, shaped by 2021 electricity lessons, presents a mix of successes and challenges. A recent study by a consortium of research organizations highlights that while electric vehicle (EV) sales have surged, aligning with the law's projections, the expansion of renewable energy sources like wind and solar has encountered significant hurdles.

The legislation, known as the Inflation Reduction Act, aimed for a dual thrust in America's climate strategy: boosting EV adoption, alongside EPA emission limits, and significantly increasing the generation of electricity from renewable resources. The Act, passed in 2022, was anticipated to propel the United States toward reducing its greenhouse gas emissions by approximately 40 percent from 2005 levels by the end of this decade, backed by extensive financial incentives for clean energy advancements.

Electric vehicle sales have indeed seen a remarkable uptick, with a more than 50 percent increase over the past year, as EV sales surge into 2024 across the market, culminating in EVs comprising 9.2 percent of all new car sales in the United States in 2023. This growth trajectory met the upper range of analysts' predictions post-law enactment, signaling a strong start toward achieving the Act's emission reduction targets.

However, the EV market faces uncertainties regarding the sustainability of this rapid growth. The initial surge in sales was largely driven by early adopters, and the market now confronts challenges such as high prices and limited charging infrastructure, while EVs still trail gas cars in overall market share. Despite these concerns, projections suggest that even a slowdown to 30-40 percent growth in EV sales for 2024 would align with the law's emission goals.

The renewable energy sector's progress is less straightforward. Despite achieving a record addition of 32.3 gigawatts of clean electricity capacity in the past year, the pace falls short of the projected 46 to 79 gigawatts needed annually to meet the United States' climate objectives. While there is potential for about 60 gigawatts of projects in the pipeline for this year, not all are expected to materialize on schedule, indicating a lag in the deployment of new renewable energy sources.

Logistical challenges are a significant barrier to scaling up renewable energy, especially as EV-driven electricity demand rises in the coming years. Lengthy grid connection processes, permitting delays, and local opposition hinder wind and solar project developments. Moreover, ambitious plans for offshore wind farms are hampered by supply chain issues and regulatory constraints.

To achieve the Inflation Reduction Act's ambitious targets, the United States needs to add 70 to 126 gigawatts of renewable capacity annually from 2025 to 2030—a formidable task given the current logistical and regulatory bottlenecks. The analysis underscores the urgency of addressing these non-cost barriers to unlock the full potential of the law's clean energy and emissions reduction ambitions.

In addition to promoting clean energy generation and EV adoption, the Inflation Reduction Act has spurred domestic manufacturing of clean energy technologies. With $44 billion invested in U.S. clean-energy manufacturing last year, this aspect of the law has seen considerable success, and permanent clean energy tax credits are being debated to sustain momentum, demonstrating the Act's capacity to drive economic and industrial transformation.

The law's impact extends to emerging clean energy technologies, offering tax incentives for advanced nuclear reactors, renewable hydrogen production, and carbon capture and storage projects. While these initiatives hold promise for further emissions reductions, their development and deployment are still in the early stages, with tangible outcomes expected in the longer term.

While the Inflation Reduction Act has catalyzed significant strides in certain areas of the United States' clean energy transition, including an EV inflection point in adoption trends, it faces substantial hurdles in fully realizing its objectives. Overcoming logistical, regulatory, and market challenges will be crucial for the nation to stay on course toward its ambitious climate goals, underscoring the need for continued innovation, investment, and policy refinement in the journey toward a sustainable energy future.

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Alberta Renewable Energy Boom highlights corporate investments, power purchase agreements, wind and solar capacity gains, grid decarbonization, and job growth, adding 2 GW and $3.7B construction since 2019 in an open electricity market.

Key Points

Alberta's PPA-driven wind and solar surge adds 2 GW, cuts grid emissions, creates jobs, and accelerates private builds.

✅ 2 GW added since 2019 via corporate PPAs

✅ Open electricity market enables direct deals

✅ Strong wind and solar resources boost output

Alberta has seen a massive increase in corporate investment in renewable energy since 2019, and capacity from those deals is set to increase output by two gigawatts —  enough to power roughly 1.5 million homes. 

“Our analysis shows $3.7 billion worth of renewables construction by 2023 and 4,500 jobs,” Nagwan Al-Guneid, the director of Business Renewables Centre Canada, says. 

The centre is an initiative of the environmental think tank Pembina Institute and provides education and guidance for companies looking to invest in renewable energy or energy offsets across Canada. Its membership is made up of renewable energy companies.

The addition of two gigawatts is over two times the amount of renewable energy added to the grid between 2010 and 2017, according to the Canadian Energy Regulator. 

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“This is driven directly by what we call power purchase agreements,” Al-Guneid says. “We have companies from across the country coming to Alberta.”

So far this year, 191 megawatts of renewable energy will be added through purchase agreements, according to the Business Renewables Centre, as diversified energy sources can make better projects overall.

Alberta’s electricity system is unique in Canada — an open market where companies can ink deals directly with private power producers to sell renewable energy and buy a set amount of electricity produced each year, either for use or for offset credits. The financial security provided by those contracts helps producers build out more renewable projects without market risks. Purchasers get cheap renewable energy or credits to meet internal or external emissions goals. 

It differs from other provinces, many of which rely on large hydro capacity and where there is a monopoly, often government-owned, on power supply. 

In those provinces, investment in renewables largely depends on whether the company with the monopoly is in a buying mood, says Blake Shaffer, an economics professor at the University of Calgary who studies electricity markets. 

That’s not the case in Alberta, where the only real regulatory hurdle is applying to connect a project to the grid.

“Once that’s approved, you can just go ahead and build it, and you can sell it,” Shaffer says.

That sort of flexibility has attracted some big investments, including two deals with Amazon in 2021 to purchase 455 megawatts worth of solar power from Calgary-based Greengate Power. There are also big investments from oil companies looking to offset emissions.

The investments are allowing Alberta to decarbonize its grid, largely with the backing of the private sector. 

Shaffer says Alberta is the “renewables capital in Canada,” a powerhouse in both green and fossil energy by many measures.

“That just shocks people because of course their association with Alberta is nothing about renewables, but oil and gas,” Shaffer says. “But it really is the investment centre for renewables in the entire country right now.”

Alberta has ‘embarrassing’ riches in wind energy and solar power
It’s not just the market that is driving Alberta’s renewables boom. According to Shaffer there are three other key factors: an embarrassment of wind and solar riches, the need to transition away from a traditionally dirty, coal-reliant grid and the current high costs of energy. 

Shaffer says the strong and seemingly non-stop winds coming off the foothills of the Rockies in the southwest of the province mean wind power is increasingly competitive and each turbine produces more energy compared to other areas. The same is true for solar, with an abundance of sunny days.

“Southern Alberta and southern Saskatchewan have the best solar insolation,” he says. “You put a panel in Vancouver, or you put a panel in Medicine Hat, and you’re gonna get about 50 per cent more energy out of that panel in Medicine Hat, and they’re gonna cost you the same.”

The spark that set off the surge in investments wasn’t strictly an open-market mechanism. Under the previous NDP government, the province brought in a program that allowed private producers to compete for government contracts, with some solar facilities contracted below natural gas demonstrating cost advantages.

The government agreed to a certain price and the producers were then allowed to sell their electricity on the open market. If the price dropped below what was guaranteed, the province would pay the difference. If, however, the price was higher, the developers would pay the difference to the government. 

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Canada Coal Phase-Out Costs highlight Fraser Institute findings on renewable energy, wind and solar integration, grid reliability, natural gas backup, GDP impacts, greenhouse gas emissions reductions, nuclear alternatives, and transmission upgrades across provincial electricity systems.

Key Points

Costs to replace coal with renewables, impacting taxpayers and ratepayers while ensuring grid reliability.

✅ Fraser Institute estimates $16.8B-$33.7B annually for renewables.

✅ Emissions cut from coal phase-out estimated at only 7.4% nationally.

✅ Natural gas backup and grid upgrades drive major cost increases.

Replacing coal-fired electricity with renewable energy will cost Canadian taxpayers and hydro ratepayers up to $33.7 billion annually, with only minor reductions in global greenhouse gas emissions linked to climate change, according to a new study by the Fraser Institute.

The report, Canadian Climate Policy and its Implications for Electricity Grids by University of Victoria economics professor G. Cornelis van Kooten, said replacing coal-fired electricity with wind and solar power would only cut Canada’s annual emissions by 7.4%,

Prime Minister Justin Trudeau’s has promised a reduction of 40%-45% compared to Canada’s 2005 emissions by 2030, and progress toward the 2035 clean electricity goals remains uncertain.

The study says emission cuts would be relatively small because coal accounted for only 9.2% of Canada’s electricity generation in 2017. (According to Natural Resources Canada, that number is lower today at 7.4%).

In 2019, the last year for which federal data are available, Canada’s electricity sector generated 8.4% of emissions nationally — 61.1 million tonnes out of 730 million tonnes.

“Despite what advocates, claim, renewable power — including wind and solar — isn’t free and, as Europe's power crisis lessons suggest, comes with only modest benefits to the environment,” van Kooten said.

“Policy makers should be realistic about the costs of reducing greenhouse gas emissions in Canada, which accounts for less than 2% of emissions worldwide.”

The report says the increased costs of operating the electricity grid across Canada — between $16.8 billion and $33.7 billion annually or 1% to 2% of Canada’s annual GDP — would result from having to retain natural gas, consistent with net-zero regulations allowing some natural gas in limited cases, as a backup to intermittent wind and solar power, which cannot provide baseload power to the electricity grid on demand.

Van Kooten said his cost estimates are conservative because his study “could not account for scenarios where the scale of intermittency turned out worse than indicated in our dataset … the costs associated with the value of land in other alternative uses, the need for added transmission lines, as analyses of greening Ontario's grid costs indicate, environmental and human health costs and the life-cycle costs of using intermittent renewable sources of energy, including costs related to the disposal of hazardous wastes from solar panels and wind turbines.”

If nuclear power was used to replace coal-fired electricity, the study says, costs would drop by half — $8.3 billion to $16.7 billion annually — but that’s unrealistic because of the time it takes to build nuclear plants and public opposition to them.

The study says to achieve the federal government’s target of reducing emissions to 40% to 45% below 2005 levels by 2030 and net-zero emissions by 2050, would require building 30 nuclear power plants before 2030, highlighting Canada’s looming power problem as described by analysts — meaning one plant of 1,000-megawatt capacity coming online every four months between now and 2030.

Alternatively, it would take 28,340 wind turbines, each with 2.5-megawatts capacity, or 1,050 turbines being built every four months, plus the costs of upgrading transmission infrastructure.

Van Kooten said he based his calculations on Alberta, which generates 39.8% of its electricity from coal and the cost of Ontario eliminating coal-fired electricity, even as Ontario electricity getting dirtier in coming years, which generated 25% of its electricity, between 2003 and 2014, replacing it with a combination of natural gas, nuclear and wind and solar power.

According to Natural Resources Canada, Nova Scotia generates 49.9% of its electricity from coal, Saskatchewan 42.9%, and New Brunswick 17.2%.

In 2018, the Trudeau government announced plans to phase-out traditional coal-fired electricity by 2030, though the Stop the Shock campaign seeks to bring back coal power in some regions. 

Canada and the U.K. created the “Powering Past Coal Alliance” in 2017, aimed at getting other countries to phase out the use of coal to generate electricity.

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California EV Adoption leads the U.S., with 37% of registered electric vehicles and 27% of charging locations, spanning Level 1, Level 2, and DC Fast stations, aligned with OCPI and boosted by CALeVIP funding.

Key Points

California EV adoption reflects the state's leading EV registrations and growth in private charging infrastructure.

✅ 37% of U.S. EVs, 27% of charging locations in 2022

✅ CALeVIP funding boosts public charging deployment

✅ OCPI-aligned data; EVs per charger rose to 75 in CA

California has consistently been at the forefront of electric vehicle (EV) adoption, with EV sales topping 20% in California underscoring this trend, and the proliferation of EV charging stations in the United States, maintaining this position since 2016. According to recent estimates from our State Energy Data System (SEDS), California accounts for 37% of registered light-duty EVs in the U.S. and 27% of EV charging locations as of the end of 2022.

The vehicle stock data encompass all registered on-road, light-duty vehicles and exclude any previous vehicle sales no longer in operation. The data on EV charging locations include both private and public access stations for Legacy, Level 1, Level 2, and DC Fast charging ports, excluding EV chargers in single-family residences. There is a data series break between 2020 and 2021, when the U.S. Department of Energy updated its data to align with the Open Charge Point Interface (OCPI) international standard, reflecting changes in the U.S. charging infrastructure landscape.

In 2022, the number of registered EVs in the United States, with U.S. EV sales soaring into 2024 nationwide, surged to six times its 2016 figure, growing from 511,600 to 3.1 million, while the number of U.S. charging locations nearly tripled, rising from 19,178 to 55,015. Over the same period, California saw its registered EVs more than quadruple, jumping from 247,400 to 1.1 million, and its charging locations tripled, increasing from 5,486 to 14,822.

California's share of U.S. EV registrations has slightly decreased in recent years as EV adoption has spread across the country, with Arizona EV ownership relatively high as well. In 2016, California accounted for approximately 48% of light-duty EVs in the United States, which was approximately 12 times more than the state with the second-highest number of EVs, Georgia. By 2022, California's share had decreased to around 37%, which was still approximately six times more than the state with the second-most EVs, Florida.

On the other hand, California's share of U.S. EV charging locations has risen slightly in recent years, as charging networks compete amid federal electrification efforts and partly due to the California Electric Vehicle Infrastructure Project (CALeVIP), which provides funding for the installation of publicly available EV charging stations. In 2016, approximately 25% of U.S. EV charging locations were in California, over four times as many as the state with the second-highest number, Texas. In 2022, California maintained its position with over four times as many EV charging locations as the state with the second-most, New York.

The growth in the number of registered EVs has outpaced the growth of EV charging locations in the United States, and in 2021 plug-in vehicles traveled 19 billion electric miles nationwide, underscoring utilization. In 2016, there were approximately 27 EVs per charging location on average in the country. Alaska had the highest ratio, with 67 EVs per charging location, followed by California with 52 vehicles per location.

In 2022, the average ratio was 55 EVs per charging location in the United States, raising questions about whether the grid can power an ongoing American EV boom ahead. New Jersey had the highest ratio, with 100 EVs per charging location, followed by California with 75 EVs per location.

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Lithuania Wind Power Investment accelerates renewable energy expansion with utility-scale wind farms, solar power synergies, streamlined permits, and grid integration to cut imports, boost energy independence, and align with EU climate policy.

Key Points

Lithuania Wind Power Investment funds wind projects to raise capacity, cut imports, and secure energy independence.

✅ 700-1000 MW planned across three wind farms over 3 years

✅ Simplified permitting and faster grid connections under new policy

✅ Supports EU climate goals and Lithuania's 2030 energy independence

The current unstable geopolitical situation is accelerating the European Union countries' investment in renewable energy, including European wind power investments across the region. After Russia launched war against Ukraine, the EU countries began to actively address the issues of energy dependence.

For example, Lithuania, a country by the Baltic Sea, imports about two-thirds of its energy from foreign countries to meet its needs, while Germany's solar boost underscores the region's shift. Following the start of the Russian invasion in Ukraine, the Lithuanian Government urgently submitted amendments to the documents regulating the establishment of wind and solar power plants to the Parliament for consideration.

One of Lithuania's priority goals is to accelerate the construction and development of renewable energy parks so that the country will achieve full energy independence in the next eight years, by 2030, mirroring Ireland's green electricity target in the near term. Lithuania is able to produce the amount of electricity that meets the country's needs.

Ramūnas Karbauskis, the owner of Agrokoncernas Group, one of the largest companies operating in the agricultural sector in the Baltic States, has no doubt that now is the best time to invest in the development of wind power plants in Lithuania. The group plans to build three wind farms over the next three years to generate a total of about 700-1000 MW of energy, and comparable projects like Enel's 450 MW wind farm illustrate the scale achievable. With such capacity, more than half a million residential buildings can be supplied with electricity.

According to Alina Adomaitytė, Deputy General Director of Agrokoncernas Group, the company plans to invest 1-1.4 billion Euros in wind power plants in three different regions of Lithuania.

"Lithuania is changing its policy by simplifying the procedure for the construction and development of wind and solar parks. This means that their construction time will be significantly shorter, unlike markets facing renewables backlogs causing delays. At present, the technologies have improved so much that such projects pay off quickly in market conditions," explains Adomaitytė.

Agrokoncernas Group plans to build wind farms on its own lands. This has the advantage of allowing more flexibility in planning construction and meeting the requirements for such parks.

"Lithuania is a very promising country for wind parks. It is a land of plains, and the Baltic Sea provides constant and sufficient wind power, and lessons from UK offshore wind show the potential for coastal regions. So far, there are not many such parks in Lithuania, and need for them is very high in order to achieve the goals of national energy independence," says the owner of the group.

According to Adomaitytė, until now the Agrokoncernas Group companies have specialized in agriculture, but now is a particularly favorable time to enter new business areas.

"We are open to investors. One of the strategic goals of our group is to contribute to the green energy revolution in Lithuania, which is becoming a strategic goal of the entire European Union, as seen in rising solar adoption in Poland across the region."

In addition to wind farms, Agrokoncernas Group is planning the construction of the most modern deep grain processing plant in Europe. This project is managed by Agrokoncernas GDP, a subsidiary of the group. The deep grain processing plant in Lithuania is to be built by 2026. It will operate on the principle of circular production, meaning that the plant will be environmentally friendly and there will be no waste in the production process itself.

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Clean Energy Investment is surging as renewables, electric vehicles, grids, storage, and nuclear outpace fossil fuels, driven by energy security, affordability, and policies like the Inflation Reduction Act, the IEA's World Energy Investment report shows.

Key Points

Investment in renewables, EVs, grids, and storage now surpasses fossil fuels amid cost and security pressures.

✅ $1.7T to clean tech vs just over $1T to fossil fuels this year.

✅ For every $1 in fossil, about $1.7 goes to clean energy.

✅ Solar investment poised to overtake oil production spending.

Investment in clean energy technologies is significantly outpacing spending on fossil fuels as affordability and security concerns, underpinned by analyses showing renewables cheapest new power in many markets, triggered by the global energy crisis strengthen the momentum behind more sustainable options, according to the International Energy Agency's (IEA) latest World Energy Investment report.

About $2.8 trillion (€2.6 trillion) is set to be invested globally in energy this year, of which over $1.7 trillion (€1.59 trillion) is expected to go to clean technologies - including renewables, electric vehicles, nuclear power, grids, storage, low-emissions fuels, efficiency improvements and heat pumps – according to report.

The remainder, slightly more than $1 trillion (€937.7 billion), is going to coal, gas and oil, despite growing calls for a fossil fuel lockdown to meet climate goals.

Annual clean energy investment is expected to rise by 24% between 2021 and 2023, driven by renewables and electric vehicles, with renewables breaking records worldwide over the same period.

But more than 90% of this increase comes from advanced economies and China, which the IEA said presents a serious risk of new dividing lines in global energy if clean energy transitions don’t pick up elsewhere.

“Clean energy is moving fast – faster than many people realise. This is clear in the investment trends, where clean technologies are pulling away from fossil fuels,” said IEA executive director Fatih Birol. “For every dollar invested in fossil fuels, about 1.7 dollars are now going into clean energy. Five years ago, this ratio was one-to-one. One shining example is investment in solar, which is set to overtake the amount of investment going into oil production for the first time.”

Led by solar, low-emissions electricity technologies are expected to account for almost 90% of investment in power generation, reflecting the global renewables share above 30% in electricity markets.

Consumers are also investing in more electrified end-uses. Global heat pump sales have seen double-digit annual growth since 2021. Electric vehicle sales are expected to leap by a third this year after already surging in 2022.

Clean energy investments have been boosted by a variety of factors in recent years, including periods of strong economic growth and volatile fossil fuel prices that raised concerns about energy security, and insights from the IRENA decarbonisation report that underscore broader benefits, especially following Russia’s invasion of Ukraine.

Furthermore, enhanced policy support through major actions like the US Inflation Reduction Act and initiatives in Europe's green surge, Japan, China and elsewhere have played a role.

In Ireland, more than a third of electricity is expected to be green within four years, illustrating national progress.

The biggest shortfalls in clean energy investment are in emerging and developing economies, the IEA added. It pointed to some bright spots, such as dynamic investments in solar in India and in renewables in Brazil and parts of the Middle East. However, investment in many countries is being held back by factors including higher interest rates, unclear policy frameworks and market designs, weak grid infrastructure, financially strained utilities and a high cost of capital.

"Much more needs to be done by the international community, especially to drive investment in lower-income economies, where the private sector has been reluctant to venture," according to the IEA.

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