‘Implementation Season’ Spurs Economic Growth – Infrastructure, Clean Energy

As our fearless leader says, [Energy] Secretary Granholm, this is implementation season and we are working really hard,” Vanessa Chan, Ph.D., Chief Commercialization Officer and Director, Office of Technology Transitions at the U.S. Department of Energy, told Politico’s “New Energy Economy” audience the other day. And it’s boosting the country’s economy overall, and ahead of schedule, economists say.

The new federal funding from the trifecta of the Inflation Reduction Act, Infrastructure Reinvestment and Jobs Act and the CHIPS and Science Act, estimated at a combined $3.5 trillion, is rolling out across the country and private sector economists say it’s driving significant economic growth. Even high interest rates and stubborn inflation fears are not holding sectors back. “We were expecting infrastructure spending to hit in 2024 and 2025, but it’s making its way through the economy much faster than that,” said Diane Swonk, chief economist for KPMG told the Washington Post. “We’re getting renewed strength from infrastructure spending and other stimulus that is adding to the economy in a big way.”

The new funding supports both rapidly expanding the use and manufacturing of existing technologies – such as electric vehicles, electric vehicle charging stations and batteries, solar panels, bridge and road repairs, airport upgrades, semiconductor chips, and wind power, to name a few, and is estimated by the White House at about $3.5 trillion in both public and private sector funding, across the country.

Chan said anyone can review the “adoption readiness level” framing they developed to evaluate projects, and track their progress in the DOE’s “commercial liftoff reports” (at liftoff.energy.gov), which she said are, “basically roadmaps of what it's going to take” to commercialize these technologies.

Addressing both the supply and demand sides of the economy

Heather Boushey, a Member of the White House Council of Economic Advisors and the Chief Economist of the Invest in America Cabinet, emphasized the administration’s focus on addressing the economy as a whole in these bills. In an exclusive interview that will air in September on Electric Ladies Podcast, Boushey said in part, “The bipartisan infrastructure law, what did it do? Well, it provided money for school districts across the country to transition to electric vehicle school buses. Awesome. Okay. Well, that's a little bit of emissions right there. And also, that helps with kids' asthma, because they don't have the emissions.” Then, she added, “the other thing in the bipartisan infrastructure law is recognizing that transportation's a system, right?,” which is why they included funding for roads, bridges, electric vehicles, and EV charging stations across the country.

Boushey explained their thinking in designing the legislation to be economically comprehensive as much as possible: “In the Inflation Reduction Act, there are all of these incentives to manufacture electric vehicles. So, support on the supply side and support on the demand side, giving consumers tax credits for new vehicles, and also tax credits for used electric vehicles.” (She said she regretted that their funding for childcare was deleted from the final bill, but that the Administration will not stop pushing for it.)

Ribbon cuttings and ground-breakings are occurring across the nation, and are so popular that Republican lawmakers who voted against the funding are now celebrating the new projects in their districts. As MSNBC reported, Rep. Kay Granger (R-TX), Rep. Ashley Hinson (R-Iowa), Rep. Rob Wittman (R-VA), and even Rep. Steve Scalise, #2 in the GOP House leadership, touted the infrastructure investment in his home state of Louisiana, which he voted against. Then there’s Alabama Senator Tommy Tuberville, who The Washington Post reported voted against the funding and is now seeking it out for his state (and holding up over 250 military appointments over his position to deny funding for travel for (mostly female) servicemembers seeking reproduction-related medical care out of the state where they are currently deployed).

Commercialization of new technologies building a new ecosystem and creating millions of new jobs

Then there’s billions of dollars for commercialization of new innovative technologies, which is where Dr. Chan’s office comes in. “The mission of my office is to figure out how do we commercialize technologies, and what that means is, moving from research to development, to demonstration to deployment. And it's really traversing that continuum,” she explained at the Politico event.

They are funding a wide range of technologies to build a new energy ecosystem, without picking favorites, Chan says, including hydrogen, nuclear, virtual power plants, industrial decarbonization and carbon management, and so much more. “What these are, are basically ways for the entire ecosystem, the public and private sector, to get together and say, ‘what do we actually need to do to bring these to market?’”

She added that they have half a trillion dollars from these bills to invest, but the goal is to have the private sector leverage it to do so much more. “The half a trillion (from the IRA, etc.) is needed to activate the 23 trillion in the private sector,” Chan added, “So, what my office is doing is trying to get everyone on the same page. The National Labs, the startups, the VCs, the large companies, everyone is needed collectively to get there and to have us all move together”

It's working. The private sector says these investments are “leading to faster and stronger private-sector investment”

All this investment is boosting economic growth and seems to be disarming the recession argument too. As the chief economist at EY-Parthenon told the Post, “the incentives contained in the IRA and IIJA are leading to faster and stronger private-sector investment, especially at a time when interest rates are as high as they are.”

Morgan Stanley’s chief economist, Ellen Zentner wrote that, “The economy in the first half of the year is growing much stronger than we had anticipated. The Infrastructure Investment and Jobs Act, which was signed into law in November 2021 … is driving a boom in large-scale infrastructure.”