James Morton Turner, Wellesley College; Joshua Busby, The University of Texas at Austin, and Nathan Jensen, The University of Texas at Austin*
The United States is in the midst of the biggest boom in clean energy manufacturing investments in history, spurred by laws like the bipartisan Infrastructure Investment and Jobs Act and the Inflation Reduction Act.
These laws have leveraged billions of dollars in government support to drive private sector investments in clean energy supply chains across the country.
For several years, one of us, Jay Turner, and his students at Wellesley College have been tracking clean energy investments in the US and sharing the data at The Big Green Machine website. That research shows that companies have announced 225 projects, totaling US$127 billion in investment, and more than 131,000 new jobs since the Inflation Reduction Act became law in 2022.
You may have seen news stories that said these projects are at risk of failure or significant delays. In August 2024, the Financial Times reported that 40% of more than 100 projects it evaluated were delayed. These included battery manufacturing, renewable energy projects and metals and hydrogen projects, as well as semiconductor manufacturing plants. More recently, The Information, which covers the technology industry, warned that 1 in 4 companies were walking away from government-supported grants for battery investments.
Workers assemble battery packs for electric vehicles in Spartanburg, South Carolina. New battery plants in the state will help move the supply chain closer to US EV factories. BMW
We checked up on all 23 battery cell factories announced or expanded since the Inflation Reduction Act was signed – almost all of them gigafactories, which are designed to produce over 1 gigawatt-hour of battery cell capacity. These factories have some of the largest employment potential of any project supported by the act.
We wanted to find out if the boom in US-based clean energy manufacturing is about to go bust. What we have learned is mostly reassuring.
The biggest battery factories are on track
While the exact investment totals are challenging to pin down, our research shows that planned capital expenditures add up to $52 billion, which would support 490 gigawatt-hours of battery manufacturing capacity per year – enough to put roughly 5 million new electric vehicles on the road.
While not all 23 companies have announced their hiring plans, these facilities are expected to support nearly 30,000 new jobs, with projects mostly in the US Southeast, Midwest and Southwest.
We wanted to know if these projects are on track or experiencing delays or problems.
To do that, we first reached out to local and state economic development agencies. In many instances, local and state tax incentives are supporting these projects. Where possible, we sought to confirm the project’s status through public data or formal announcements. In other instances, we looked for news stories to see if there is evidence of construction or hiring.
Of the 23 projects, our research shows that 13 appear to be on track, with total planned capital investments in excess of $40 billion and nearly 352 gigawatt-hours per year of capacity. Importantly, these include most of the biggest projects with the largest investments and projected production.
By our count, 77% of the total planned capital investment, 79% of the proposed jobs and 72% of the planned battery production are on track, which means that a project is likely to happen, roughly on time, and generally with their expected level of investment and employment.
Three projects are on the bubble. These have shown progress but experienced delays in construction or financing.
Five others show deeper signs of distress. We don’t yet have enough information to draw a conclusion on two projects.
An example of a project that is on track is Envision AESC’s battery factory in Florence, South Carolina. Its scale has been expanded twice since it was first announced in December 2022. It is now a US$3 billion investment intended to manufacture 30 gigawatt-hours of batteries annually to supply BMW’s factory in Woodruff, South Carolina.
In early October 2024, South Carolina Secretary of Commerce Harry Lightsey conducted a tour of the Envision site and posted a video. Construction on the plant started in February 2024, and 850 workers are working six days a week to finish the 1.4 million-square-foot facility by August 2025. Once it goes into full production, the project is expected to employ 2,700 people.
2024 election could end or accelerate the boom
But a lot hinges on what happens in the upcoming elections.
Our data suggests the real risk that these projects and projects like them face isn’t slow demand for electric vehicles, as some people have suggested – in fact, demand continues to climb. Nor is it local opposition, which has slowed only a few projects.
The biggest risk is policy change. Many of these projects are counting on Advanced Manufacturing Tax Credits authorised by the Inflation Reduction Act through 2032.
On the campaign trail, Republicans up and down the ticket are promising to repeal key Biden-led legislation, including the Inflation Reduction Act, which includes grant funding and loans to support clean energy as well as tax incentives to support domestic manufacturing.
While full repeal of the act may be unlikely, an administration hostile to clean energy could divert its unspent funds to other purposes, slow the pace of grants or loans by slow-walking project approvals, or find other ways to make the tax incentives harder to get. While our research has focused on the battery industry, this concern extends to investments in wind and solar power too.
So, is the big boom in US-based clean energy manufacturing about to go bust? Our data is optimistic, but the politics is uncertain.
James Morton Turner, Professor of Environmental Studies, Wellesley College; Joshua Busby, Professor of Public Affairs, The University of Texas at Austin, and Nathan Jensen, Professor of Government, The University of Texas at Austin
This article is republished from The Conversation under a Creative Commons license. Read the original article.
32 Comments
It's a great paper.
But geez ... It could have been written by the oil industry, i.e. "We're stuffed. We have to keep using fossil fuels. There is no other way." Okay, I exaggerate.
One of my main gripes with this kind of analysis - even good ones like this - is that they focus on the status quo far too much.
For example, the discussion of ethanol ('alcohol') & biofuels goes into the present manufacture. And let's be clear here - the present large scale manufacturing of these fuels only exists because of huge government subsidies. And the environment issues enormous, as the techniques used are really, really primitive because no one wants to invest in an industry that can only exist at the whim of a political elite. Without these subsidies, they couldn't compete with cheap fossil fuels (or the powers that ensure they remain cheap - looking at you USA that subsidizes their oil industry to the tune of billions every single year!)
When modelling the whole raft of energy alternatives to fossil fuels, with subsidies removed and the price of oil near double (or more) it's current value to account for the real environmental cost, a whole new status quo emerges.
Somewhat off topic, but don't look at the massive subsidies handed out to 'farmers' in most developed countries, either. They do this on 'national security' grounds. But lets be clear, it simply feeds the wealth of the landed gentry while ensuring countries which could produce the food are keep out of the market. Friggin' shameful!
Want another example of a woeful projection based on the current status quo? Take this gem.
"It was assumed that pumped hydro storage (PHS) was greatly expanded in 2050 (3.8 GW capacity, 520 GWh storage) compared to 2017 (1.4 GW capacity, 369 GWh storage)."
Wow. In 30 years we can only manage a doubling in pumped hydro storage? Seriously?
In 30 years it could be increased by 10 times, and most likely by far more if rare earth metals became even more expensive than is predicted!
FYI: pumped hydro doesn't need rare earth metals to store electricity. The energy source behind all hydro is our friend the Sun. (That's the huge ball of nuclear fusion we see in the sky every day. It's expected to still be there for the next million years. And scientists - not that many believe them anymore - suggest it could still be doing its thing for another 5 billion years. [humor])
Water-at-height is the most benign battery there is, or will ever be.
You don't have to convince me - I've done 17 years on micro-hydro (supplementing PV - but when the system crashes, including the manufacturing/sale of PV, and mine fade away, the micro-hydro will still be chugging away. I may not, of course...).
Did you see the nonsense the Listener allowed through subbing - the editorial-replacement guest piece? An emeritus persona, not of physics obviously, spouting on that MG are going away from lithium and heading for solid state (which apparently needs no resources to construct?????). As far as I know, it's still lithium (it has to be SOMETHING; there has to be an anode and a cathode and a go-between.
But no, solid state nothingness is the future. That slipped past all (if they have any) Listener scrutiny. Go figure...
They're only called rare because they are not found in rich seams. They're more scattered about in the ore and fairly abundant in the Earth's crust. China was a major producer and exporter because they undercut the rest of the world making extraction uneconomical until China cottoned on to the reality that the rest of the world would just use up all China's deposits before using their own. China actually imports some rare earth elements and restricts exports now.
It's not just rare earths - it's a host of other materials, including the (diverted) energy to extract, process and distribute them.
The base-line is that there is an EROEI below which the 'economy' as a whole, cannot maintain itself. We are traversing that point, globally. Can any of these 'green technologies' stand alone ex fossil support?
Not proven, not once. And we have to remember that these are 'rebuildable', not 'renewable' technologies: entropy applies (sure the original sun might be renewable, but the materials needed to harness it aren't.
So is the question whether we can scale EVs up to replace ICEs? No.
The question is: beyond fossil input, what can we long-term maintain. And EVs aren't on the list. Not even close. How much surplus energy can a real-time-solar-derived economy, spare after allocating enough to renew itself.
Do the Math | Using physics and estimation to assess energy, growth, options—by Tom Murphy
Surplus Energy Economics | The home of the SEEDS economic model – Tim Morgan
"And EVs aren't on the list. Not even close."
Certainly not using the battery tech that was developed 5+ years ago which is what we see in the current generation of EVs.
"So is the question whether we can scale EVs up to replace ICEs?"
A better question is should we? We should scale up the alternatives to ICEs that burn fossil fuels. And we should look very carefully at the silly reasons why vehicles are getting bigger and bigger, and require ever increasing amounts of energy to manufacture and operate.
Let's not forget - road vehicles are just a fraction of the direct consumption problem. However, they create an unholy 'energy abundance mindset' that facilitates consumption in every other area of our lives. E.g. town planning, "I'll just hop in the car to shop at my local supermarket".
No US and many other countries the rise continues. NZ sales has been devasted by the Coalition ideology sadly glues to ICE technology.
The share of electric and hybrid vehicle sales in the United States increased in the second quarter of 2024 (2Q24) after a slight decline in 1Q24. Combined U.S. sales of hybrid vehicles, plug-in hybrid electric vehicles, and battery electric vehicles (BEVs) increased from 17.8% of total new light-duty vehicle (LDV) sales in 1Q24 to 18.7% in 2Q24, according to estimates from Wards Intelligence
Anti EV because he cannot repair them. Basically its now an electronic device. There is enough electronics in a modern ICE to totally stuff a mechanic as it is and an EV would be a nightmare, what can he service ? The brakes ?. EV's are only a solution in rich countries with the likes of nuclear power stations and a whole load of renewables like wind farms. To run an EV in New Zealand you really need to put in your own Solar system at great up front cost which would pay for my petrol for years. I could put that sort of money in the bank and the interest would pay for my gas so what's the incentive ?
JJ - try thinking.
Energy underwrites money - which means your last posit is invalid. Grid electricity, ex fossil energy, would not exist. So your 'cheaper' merely means something is being improperly valued.
Actually, just about every finite or limited resource is improperly valued, and avoiding 'externality' costs, make that worse. Dollars, currently, are a long way from true valuation of resource stocks.
A slightly different perspective on US EV purchasing in the US.
https://wattsupwiththat.com/2024/11/01/electric-vehicles-a-tale-of-woe-…
Perhaps this is limiting any large increase.
Green energy boom as the government spends into the economy to support new technology, innovation and production of the future.
Meanwhile in NZ... crickets...
This goes hand in glove with the US gaining 2.1m jobs this year, while NZ loses 29k. Gee whiz if only NZ political parties actually had a plan that wasn't the time tested failure of austerity.
Indeed. But let's be clear - The oil industry is awash with subsidies too. The USA is a major culprit.
Were the oil subsidies removed, and the true cost of oil included in its price, green tech wouldn't need those subsidies except in the start-up phase. A good example of this is electricity generation using wind. It now stands largely on its own without direct subsidies (it still gets planning goodwill) and has become cheaper than fossil fuel generation in most developed countries.
Doesn't look all that rosy.
https://www.masterresource.org/offshore-windpower-issues/offshore-wind-…
LOL. Forgive me if I put that link into the 'anecdata' category. It's not uncommon for a few projects to run into problems. And offshore is more expensive to develop than onshore. But in most instances, offshore should produce more power, and more consistently. Golly, we might even learn more about it but our spectacularly short-sighted government wants seabed mining instead.
Strong 2023 offshore wind growth as industry sets course for record-breaking decade (Yes. I accept these guys have reasons to blow their own trumpet.)
If we constrain the discussion to the US as the article is about US battery manufacture for EVs and recognise that oil and gas have "subsidies" but then so will wind. It'll end up being a fight about subsidies. As far as I'm aware the "subsidies" are actually depreciation rates as well as other expenses incurred because drilling for oil and gas can't be equated to buying equipment for making widgets in a factory.
I'm sure some enterprising people have come up with a comparison of tax breaks and other incentives that are allowed for in both industries.
Hilarious considering fossil fuel subsidies are over $1 trillion a year: https://www.iea.org/topics/fossil-fuel-subsidies
I wonder why the US isn't included on the graph? Could be because their corporate welfare is better disguised.
Just an aside, when Musk said he could shave $billions off the Federal government's spending, I immediately thought of the US subsidies given to US oilers. Tesla would love that. But even eliminating them, and many other corporate benefits, won't get Musk to his claims. It would however be spectacularly disruptive to the US economy in the short term while beneficial to the global economy & environment in the longer term. Chances of Musk even getting to 20% of his claims? Close to zero.
Oil cannot run without subsidisation now - the EROEI has descended below that level (on average; there are still SGs like the aging Ghawar, which do good EROEIs).
But there isn't enough energy going into the system to parry entropy. keep the lights on, and repay the amount of debt being issued.
So the debt mounts - $3+ of debt for every $! of 'GDP' (an inadequate measure to start with).
So debt default - whether by jubilee, bankruptcy, of collapse - is inevitable. That is the question I asked of you, Chris, which you do not answer. The Michaux link has an obvious message; beyond peak fossil energy flow, debt is unrepayable in total, and less repayable per time from then on.
I've been pointing that out on this site for nearly 20 years...
Hmmm. This policy is as ridiculous as most of their policies. It's what people want to hear but miles away from what can realistically be achieved.
Last time I checked, the US was the largest producer of oil in the world. The problem is though - they can't produce it as cheaply as some other producers can. Ergo, producing more either won't happen or won't bring the US price down. I wish US voters actually checked the policies they so fervently back as too many are just hot air.
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