The Inflation Reduction Act (IRA) of 2022 will help to finance struggling nuclear reactors and could save dozens of them from being shut down early thanks to a 10-year production tax credit.
The $433 billion IRA, which was negotiated chiefly by U.S. Sen. Joe Manchin (D-W.Va.) with Senate Majority Leader Chuck Schumer (D-N.Y.), has been touted by Democrats as a way to fend off rising inflation, trim the federal deficit, and reduce carbon emissions while bolstering investments in domestic energy production and manufacturing.
It seeks to spend about $369 billion toward energy and climate programs over the next 10 years, and Democrats project that it will raise $739 billion in new revenue.
Included in the proposed legislation is a “zero-emission nuclear power production credit” that provides (pdf) up to 0.3 cents per kilowatt-hour for energy produced from a zero-emission nuclear power facility, starting in 2024 and ending in 2032.
The proposed $15 per megawatt-hour credit for existing nuclear plants is estimated to cost $30 billion over a 10-year-period, Bloomberg reported, but it will gradually decrease as power prices rise above $25 per megawatt-hour, according to the Nuclear Energy Institute, which told Bloomberg that the credit program is a “historic step forward in addressing the economic hurdles our carbon-free nuclear plants have been facing.”
Such a credit program could help President Joe Biden in meeting his ambitious climate goals, which include reaching net-zero emissions economy-wide by no later than 2050.
The legislation is expected to be voted on by Senate lawmakers in the coming weeks.
However, while Democrats are hopeful that the IRA will help bring some relief to a buckling U.S. economy, critics are questioning whether it can achieve any of the goals it has laid out.
“This bill shouldn’t pass and become law. It’s going to cause a lot of pain for the American people,” Sen. John Barrasso (R-Wyo.) told The Hill on Aug. 2. “I don’t care about what pain it may cause members of the Democratic Party.”
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