(Bloomberg) — While the renewables boom is here to stay, the U.S. election in November could leave some CAA programs and regulations vulnerable to repeal, according to KKR & Co.’s global infrastructure chief, Raj Agrawal.
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“Many of our clients are asking whether we believe there is an election outcome that will lead to the repeal of the Inflation Reduction Act, which provides hundreds of billions of dollars in financing and tax incentives for clean energy innovation, R&D, and development,” Agrawal wrote in a note distributed to clients on Thursday. .
Although the IRA is unlikely to be completely eliminated, discretionary spending programs depend on who occupies the White House and Congress could consider revisions to the IRA tax code, Agrawal said in the memo.
Despite uncertainty over public financing and support, “investment in renewables represents a structural trend that will not go away,” he said, noting continued demand for clean energy. “Renewable energy capacity has grown over the past 22 consecutive years, and the IEA expects global capacity to grow more in the next five years than in the last century since the first renewable energy plant was built.”
Agrawal cited a “wave of consolidation” as well as the launch or growth of companies run by competitors as approved infrastructure as an asset class. Interest in the sector was amplified earlier this year when BlackRock Inc. to acquire Global Infrastructure Partners for approximately $12.5 billion.
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