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A recent ÃÛ¶¹ÊÓƵ Decarbonization Conference brought together companies who are driving innovation and solutions in clean energy infrastructure, including next-gen nuclear, and other low-carbon alternatives like renewable natural gas (RNG), used for transport and sustainable aviation fuel (SAF), and the adoption of electric vehicles (EV) for commercial transportation. The panel discussions focused on what’s fueling the clean energy sector, as well as the investor opportunities presented by these new industries and technologies.

The panelists agreed that the pace of innovation in clean energy is impressive. Progress has been spurred by a regulatory push to lower carbon emissions, but also by technological advances that have made energy sources like RNG and nuclear more accessible, affordable and scalable.

The benefits of RNG, which is made from organic waste such as animal waste or manure, are multifaceted.

Furthermore, with energy demand expected to surgeÌý– in part related to the enormous requirements of power-hungry data centersÌý– there is increased public acceptance that sustainable sources must be an integral part of the energy mix. Ìý

Ongoing investment in the infrastructure for commercial EV charging has evolved significantly and provides an increasingly viable alternative for commercial transportation, with recent testing of medium and heavy duty trucks successfully scaling sub 100-mile routes¹. For harder to convert long-haul routes, the development of megawatt charging systems could significantly increase charging speeds, reducing disruption to journeys.Ìý

From next-gen nuclear including small modular reactors (SMRs) with the potential to make nuclear power more affordable – to the growing use of RNG as an alternative transportation fuel, the focus is squarely on finding targeted, nimble and cost-effective clean energy solutions.

And these new technologies are starting to bear fruit. There has been some movement in nuclear energy with a new plant in Georgia, US, that has recently become operational. Also, retail giant Amazon now utilizes a number of RNG fueling stations to power their fleet of delivery trucks and Pepsi Co has deployed electric trucks for long-haul, heavy loads in California as they electrify their fleet. While many challenges remain – such as problems with supply chain issues, and for nuclear, environmental considerations, historical reticence and, the lack of a skilled workforce – our panelists also cite real progress in improving standardization and market-wide efficiencies.

It was generally agreed that the primary challenge is for policy and regulation to keep pace with the fast-moving universe of low-carbon options. On the regulatory front, in the US, clean energy providers benefit from several tailwinds, such as tax credits and other incentives for alternative fuels contained in the Inflation Reduction Act (IRA). These subsidies and financial enticements are expected to help companies increase their scale and reach while also boosting their appeal to private sector investors. Additionally, recently released US government guidelines for voluntary carbon credit markets (VCMs) should encourage demand for carbon credits (via RNG), particularly if the increase in power demand from data centers is partially met with higher carbon emission fuels.

At the state level, California’s Air Resources Board (CARB) has helped spur investment in commercial EV infrastructure in the region, with requirements for roughly 1.8 million medium and heavy duty commercial fleets to implement zero-emission vehicles by 2042².

Looking ahead, investors—as well as the clean energy companies themselves – are eagerly awaiting the implementation of IRS Code 45Z (expected in 2025), which provides credit for electricity produced from renewable sources, such as wind and geothermal. 45Z guidance continues to be a focal point, with some panelists noting that the length of the credit needs to be extended beyond three years due to the reconciliation process. In broader terms, the outcome of the upcoming presidential election in the US could impact the scope and impact of tax credits and incentives in this space, and will determine what changes, if any, will be made to the IRA.
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Against the backdrop of rising energy demands and growing public support of carbon-free energy, the last 10-15 years have seen a clear shift from government funding of renewable energy projects towards public/private partnerships and private capital.

In the nuclear energy space, small-footprint solutions like modular nuclear reactors hold great potential to accelerate the transition away from fossil fuels, while the rapidly increasing energy needs of data centers (largely fueled by the explosion of AI) has garnered a lot of attention and could prove to be a key catalyst for a push towards renewable energy sources. While many of these carbon-free energy solutions are still in the early stages and withÌýbusiness models for electric-trucking and charging-as-a-service still being defined and challenges still to overcome, the upside for further innovation and progress is substantial.

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1.ÌýÌýTesting conducted in the North American Council for Freight Effeciency in Sept 2023

2. "How quickly can trucking decarbinze? California is about to find out", Canary Media, May 2023