Assessing the Impact of the Inflation Reduction Act on Nuclear Plant Power Uprate and Hydrogen Cogeneration
On August 16, 2022, Congress passed the Inflation Reduction Act (IRA) to promote investment in new, carbon-free power generation and sustainable operation of existing carbon-free assets. Specifically, the IRA includes both a production tax credit (PTC – Section 45Y of the IRA) and an investment tax credit (ITC – Section 48E) which utilities may leverage to offset the costs of power uprate. Further, the IRA includes a provision (Section 45V) for a PTC associated with carbon-free hydrogen cogeneration. These tax credits, along with recent legislation efforts to decarbonize the country, have re-emphasized the importance of maintaining and optimizing the existing nuclear plant operating fleet. As a result, utilities are reexamining the possibility of uprating their existing nuclear assets to further maximize carbon-free electricity generation.