Reuters has reported that Siemens Energy is considering greater investment in the United States, as demand for grid infrastructure is likely to be higher as a result of the higher spending on power generation capacity following the introduction of the Inflation Reduction Act with its generous subsidies.

In particular, increased levels of renewables and batteries, as well as other equipment within the grid, are expected to mean that more state-of-the-art grid technology will be needed to manage highly variable operating conditions – an estimated US$2 trillion is to be spent by 2050. Chief Executive Christian Bruch told reporters that “What drives the U.S. market is the long-term predictability of subsidy conditions under the IRA. Any investor can fairly quickly do the maths on the back of an envelope to figure out the benefits…This is much simpler and clearer than in Europe.”

Whether increased investment in the USA means less investment in Europe is not clear, but Mr Bruch did say that the company would have to think carefully about where to allocate its resources. Presently, Siemens Energy supplies the USA (which accounts for around 15% of its business) from its bases in Europe and Latin America, though it has offices across the USA.

The news is another sign of the continuing power of the Inflation Reduction Act; the only note of uncertainty would be around a possible scaling-back of the Act should the Republican Party win the 2024 presidential election, though with such investment flowing into the USA, a new president may choose to stick with the subsidies.