After a vote-a-rama in the Senate and passage in the House, President Joe Biden signed the Inflation Reduction Act (IRA) into law. It’s not often that Congress returns to Washington during August district work periods to pass legislation—unless it’s important. In fact, President Biden called the legislation “one of the most significant laws in our history.”
While the IRA includes healthcare and tax provisions, it is also a historic investment in domestic energy policies designed to set the stage to reduce carbon emissions by roughly 40 percent by 2030. Discussing the IRA, President Biden said, “this bill is the biggest step forward on climate ever.” And at the center of this big step to address climate change is support for carbon-free nuclear energy.
The legislation ensures that existing nuclear reactors are able to provide reliable, clean energy for years to come with a new production tax credit (PTC)—the first of its kind for existing technologies. The PTC is a credit of up to $15 per megawatt-hour of electricity produced, and it will go into effect at the beginning of 2024 and last through 2032.
The IRA also encourages cutting-edge new nuclear with a clean electricity PTC that can be used for advanced nuclear and power uprates that enter service in 2025 or later. Going even further, and as an alternative to the clean electricity PTC, the IRA creates a clean electricity investment credit for zero-emissions facilities entering service in or after 2025. This provides a credit of 30 percent of investment in new zero-carbon electricity facilities, including nuclear. The legislation also makes a significant investment into High Assay Low Enrichment Uranium (HALEU) which will be critical to fueling reactors of the future.
The legislation also supports nuclear energy by expanding the Department of Energy’s loan guarantee abilities, creating a PTC for hydrogen production, and including an extension of the Advanced Energy Project Credit program.
Nuclear’s position in the “biggest step forward on climate ever” leaves no question—both existing and new nuclear are vital to our clean energy grid and economic future.
“The energy provisions in the Inflation Reduction Act send a clear signal that nuclear is essential to the transition toward a carbon-free economy that also provides long-term, quality clean energy jobs,” said Maria Korsnick, president and chief executive officer of the Nuclear Energy Institute. “The investment and tax incentives for both large, existing nuclear plants and newer, advanced reactors, as well as HALEU and hydrogen production, set nuclear energy on a level playing field, ensuring that nuclear can form the backbone of a stable electric grid that also includes large shares of wind and solar.
As demand grows for more clean energy generation, we are seeing utilities, corporations and the industrial sector looking at new nuclear to help meet their decarbonization goals. We are now on our way to meeting the incredible demand before us. The passage of the clean energy provisions in the IRA provides confidence to invest in not only nuclear's present but its future as well, opening a bright path toward the next generation of reactors. This extends beyond the U.S., with countries abroad also looking to new nuclear to meet their climate goals and ensure their energy security during this critical time.”
The IRA is game-changing legislation, and it shows the federal government’s commitment to addressing the threats of climate change. With the IRA now law, nuclear stands on an equal playing field with wind and solar—ready to deliver the solutions we need.
