Europe’s response to the US’ Inflation Reduction Act (IRA) has been a big talking point at Giga Europe, and one panellist said the simplicity of the IRA has been key to its success.
“The reason the Inflation Reduction Act is doing well versus the Green Deal Industrial Plan (Europe’s response) is because it is easy to understand,” said Richard Clark, global head of specialty materials and processes for Appian Capital Advisory.
Clark was speaking at the conference on mass production of batteries for the region, hosted by Benchmark Mineral Intelligence this week in Stockholm, Sweden.
“It’s US$35 per kWh if you’re a battery cell manufacturing company, it’s US$10 per kWh if you’re a cell module company, it’s US$7,500 if you drive an electric vehicle and it’s very clear what you need as the components to get that. Everybody understands it and there’s US$369 billion behind it.”
Try Premium for just $1
- Full premium access for the first month at only $1
- Converts to an annual rate after 30 days unless cancelled
- Cancel anytime during the trial period
Premium Benefits
- Expert industry analysis and interviews
- Digital access to PV Tech Power journal
- Exclusive event discounts
Or get the full Premium subscription right away
Or continue reading this article for free
“Europe completely can beat North America, but even European companies like Northvolt and Freyr have been looking at what they should be doing in North America versus Europe, because of how easy it is to understand. Europe has to simplify it and realise that if it isn’t simplified, it will be China and North America.”
Clark was speaking on the ‘Cathodes, Anodes & Battery Innovation Panel: creating a European hub for mid stream capacity & next generation battery development’ on day one of Giga Europe yesterday (12 March, pictured above).
In one of a few keynote speeches via video on day one, European Commission executive VP Maroš Šefčovič said the EU was ‘stepping up its game’ on providing the financial support and conditions for the bloc’s battery manufacturing ecosystem to thrive.
In the same session as Clark, towards the end of the day, investor Vertical Ventures’ Anthony Tse said that the USA has essentially adopted China’s playbook, the ‘carrot and stick approach’.
“You’ll get penalties if you don’t hit these targets but here’s a carrot if you do. Every country has the same ability to play with their balance sheet, and this will by no means be a cheap exercise for the US. Minimum estimates are that the Inflation Reduction Act will cost them around US$300 billion, I would say they’re lucky to get away with twice that, and closer to US$1 trillion,” Tse said.
“The Chinese, and others, are so used to saying a project can be done in two years. I’d love to see that in Europe, but just the paperwork can prevent that happening, so that can be streamlined.”
“The US has basically designed a structure, whereby they are saying to the industry ‘if you do this, you will get this. In China, they said ‘we’d like you to do this, and you must do this’ and the industry turned around and said ‘what’s in it for me’. In Europe, there’s a lot of pressure for the private sector to take on that financial burden for projects, whereas other parts of the world are looking at ways for government and private funding to work more closely together.”
Alongside its grants and tax credits for clean energy manufacturing, the Inflation Reduction Act also has tax credit incentives covering investment and production for downstream clean energy projects, including energy storage.
Energy-Storage.news’ publisher Solar Media will host the 5th Energy Storage Summit USA, 19-20 March 2024 in Austin, Texas. Featuring a packed programme of panels, presentations and fireside chats from industry leaders focusing on accelerating the market for energy storage across the country. For more information, go to the website.
