Gates: Inflation Reduction Act driving growth in energy tech
U.S. government incentives to promote investments into nascent technologies such as green hydrogen will have a “healthy” impact, even as they risk distorting the trade in electric cars between Europe and the U.S., Bill Gates said.
Speaking in a podcast interview with the head of Norway’s $1.3 trillion sovereign wealth fund, Nicolai Tangen, Gates extolled government policies for pushing the green transition.
“There is essentially no market for green hydrogen today,” the Microsoft cofounder and philanthropist said.
The idea that for the next decade, “European governments will fund some projects in Europe, the U.S. will fund some — I think that’s healthy. It will create a market,” he said.
“For the next ten years, having that there is great for the entire world.”
While technologies such as solar and wind power now provide cheaper energy than fossilfuel alternatives, they’re not consistently available.
To ensure a successful green transition, they need to be combined with technologies such as green hydrogen, carbon capture and storage, and industrial battery systems, which are still in their infancy.
The $374 billion provided by the U.S. Inflation Reduction Act to support climate- and energyrelated technologies is expected to jump-start innovation geared at addressing the challenge of reducing emissions.
Green hydrogen is “still about four times more expensive than it needs to be,” Gates said, adding that tax credits in the IRA will “drive massive activities” and reduce the “green premium” — the price difference between an existing product and its future climate-neutral counterpart.
“If we innovate to get that green premium to be very small, ideally zero or even negative, then the adoption on a global basis, not just rich countries but also middle income countries, will happen pretty naturally,” Gates said.
Still, Gates voiced disappointment that the IRA “distorts somewhat” the trade in electric vehicles and components between Europe and the U.S.
“We should have free trade in everything having to do with cars,” Gates said.
“That competition is good for both regions and I hope this thing can be refined so it’s not distorting anything about the electric-car market.”