We analyse US Inflation Reduction Act (IRA) incentives for electric vehicle battery technology and supply chain decisions. We find that the total value of available credits exceeds estimated battery production costs, but qualifying for all available credits is difficult. IRA cell and module credits alone bring estimated US battery production costs in line with China. In contrast, IRA material extraction and processing credits are modest. IRA’s end-user purchase credits are restricted to electric vehicles whose battery supply chains exclude foreign entities of concern, including China. This incentivizes diversification of the entire supply chain, but leasing avoids these restrictions. Lithium iron phosphate batteries have potential to more easily reduce supply chain vulnerabilities and qualify for incentives, but they have smaller total available incentives than nickel/cobalt-based batteries. Overall, the IRA primarily incentivizes downstream battery manufacturing diversification, whereas upstream supply implications depend on automaker responses to foreign entities of concern and leasing rules.
Correction to: Nature Energy https://doi.org/10.1038/s41560-024-01642-3, published online 16 September 2024.
As Europe’s renewable energy capacities expand, electricity systems face increased risks of energy droughts—periods of low production coinciding with high demand. We evaluate characteristics of electricity variability due to weather variations by calculating 1,600 years of daily production and demand. Focusing on five European countries—chosen for their energy mix including hydropower—we find that energy droughts result from processes that cause (temporally) compounding impacts in the energy and meteorological system. These can turn what might have been short-term droughts into prolonged high unmet energy demand. For instance, low reservoir inflows in spring quadruple the chance of prolonged energy droughts: reduced snowpack and rainfall lower hydro availability but also dry out subsoils, increasing the chance of heatwaves and therewith extending the energy problems into summer. We identify and quantify three compounding energy/climate conditions and the associated characteristics and risks of multi-year energy droughts, crucial for informing future energy system design.