What will be the big issues for sustainable finance in 2023? Luca Bonaccorsi at Transport & Environment points at four. Firstly, the EU Taxonomy defines what counts as “green” investment. There has been much criticism of the inclusion of gas, and critics will continue publishing their analyses of what is truly sustainable and what is greenwash. Next, ESG ratings have also been severely criticised. They are an investor’s main tool for capital … [Read more...]
How to tax renewable energy firms for windfall profits from high wholesale electricity prices
Should windfall taxes be imposed on renewable energy firms that have benefitted from the current high electricity prices caused by the increases in oil, gas and coal prices triggered by Russia’s invasion of Ukraine? If so, how, and how much? The IEA has conducted a study of the EU to try to uncover who has (and hasn’t) made extraordinary profits, and how much. Up front they say this is difficult to do as the majority of installed renewable … [Read more...]
Doubling clean energy investments from “natural” redirection of existing spend on infrastructure, buildings, fossils +more
Annual investments in clean energy stand at $1.4tn, now greater than investments in fossil fuels ($1tn). But that needs to double by 2030. This steep climb will be made easier by the natural cycle of global investment, as well as the cost-benefits of abandoning fossil fuels for renewables and greater efficiencies, says Stephen Peake at The Open University. Each year, around a quarter of our GDP is anyway spent on new machinery, buildings and … [Read more...]
Distribution Grid Digitalisation – benefits, policy, cost & funding
About a third of European grids are over 40 years old. A rapid physical overhaul would be impossible, so the addition of a layer of digital technologies is the key to preparing them for the distributed and intermittent generation from renewable sources, the increased electricity demand from transportation, heat pumps and other sectors, and for ensuring energy efficiency at all levels. It’s why the EC expects about €584bn of investment in Europe’s … [Read more...]
Investing in Hydrogen: is there a “first mover advantage”?
Is there a “first mover advantage” – or not - for an investor in the new hydrogen economy? Michiel Korthals Altes offers a series of “tests” of investment decisions based on the following criteria: economics, climate efficiency, system optimum, price stability, regulation, technology, now and in the future. He concludes that until the sector reaches maturity, conversion inefficiencies make the production of hydrogen a poor choice for most … [Read more...]
Russia’s war is accelerating the clean energy transition, says IEA
The IEA’s World Energy Outlook 2022 is predicting that fossil fuels will peak in the next five years, “thanks to” Russia’s war and the resultant energy crisis. National climate promises are being turned into policies that improve energy security, which mostly means reducing dependence on gas. That means global energy demand growth to 2030 will “almost entirely” be met by renewables. Simon Evans at Carbon Brief takes an in-depth look at the … [Read more...]
EC Consultation: ESG ratings need regulation to fix inconsistencies and bias
There are multiple problems with ESG ratings and that’s why they need to be properly regulated, says Hazel James Ilango at IEEFA. Different ratings agencies have different methodologies that are difficult to compare. They can lack transparency and be biased due to industry, geographical location or company size. As for a company’s impact on the planet and society, it can be overrated or underrated due to the aggregation of Environmental, Social … [Read more...]
Ukraine’s post-war reconstruction must prioritise Renewables, for energy security and European integration
With Russia using energy as a weapon of war, Ukraine must prioritise domestic renewable generation to help ensure its future energy security, explain Joseph Majkut and Allegra Dawes at the Center for Strategic and International Studies. Ukraine’s reconstruction, which will cost hundreds of billions, must therefore include it in its strategy. Done right, it will also enable greater market integration with the European Union. Ukraine’s energy … [Read more...]
Industrial Policy: China’s always had it, the U.S. has rediscovered it, the EU now needs it too
China’s performance – both in and outside the energy sector – has always been driven by wide-reaching industrial policy. In the last few decades it has consistently delivered results. Meanwhile, the U.S. has kept shifting up the gears of its pro-U.S. interventionist industrial policy since Donald Trump: though socially right wing, he was a protectionist president whose ambition was to boost domestic industries. Today, president Biden’s “Inflation … [Read more...]
$78tn net gain for compensated global Coal phase-out, when social benefits are added
Is replacing coal with renewables too expensive? No, it’s the opposite, explain Tobias Adrian at the International Monetary Fund, Patrick Bolton at Imperial College London and Alissa Kleinnijenhuis at the Oxford Martin School who summarise their paper. When the social benefits are added, the net gain globally is around $78tn under a conservative estimate. That’s equal to 1.2% of current world GDP every year until 2100 – these are real economic … [Read more...]
Event Summary: Building GW-scale Offshore Wind in the Baltic Sea
Here we provide a written summary of the panel discussion “Wind of Change or Change of Wind? The future of Baltic Sea offshore investments” held on 12th September 2022 in Brussels. It’s a full summary of the 90 minute discussion (including audience questions), but it begins conveniently with a summary of the highlights. The Baltic Sea has the potential to develop over 90 GW of offshore wind capacity. The Russian invasion of Ukraine has delivered … [Read more...]
Hydrogen project pipelines need new ways of matchmaking investors and developers
What is required to catalyse private investment in the new hydrogen economy? Isabelle Huber at the Center for Strategic and International Studies has looked at a European Investment Bank survey of hydrogen investors in the EU to find some answers. One obvious challenge is the cost of moving to hydrogen. An example of dealing with this is Germany’s H2Global mechanism which uses government funds to bridge the gap. But another major problem … [Read more...]
Energy security concerns are building momentum for Nuclear
The IEA’s latest report on nuclear power recommends a doubling of capacity by 2050. It emphasises that, though many advanced economies are planning a decline, 32 nations have nuclear today and reactors are now under construction in 19 countries. It’s evidence of a momentum behind nuclear power that should be further stimulated by recent spikes in oil, gas and electricity prices, says the IEA. Russia and China remain nuclear advocates, which … [Read more...]
Record global clean energy spending, but it’s still not enough and costs are rising
Since 2020, clean energy investment has grown by 12% per year – it was only 2%/year during the five years after the 2015 Paris Agreement. That boost is the main reason why total global energy investment is set to reach $2.4tn in 2022, according to the latest “World Energy Investment” report from the IEA. It’s very good news that spending on solar PV, batteries and EVs is now growing at rates consistent with reaching global net zero emissions by … [Read more...]
Event summary: “45% RES by 2030: EU’s latest investment challenge to DSOs”
Sara Stefanini provides a written summary of our panel discussion held on Thursday June 30th 2022. It’s a full summary of the 90 minute discussion (including audience questions), but it begins conveniently with a summary of the highlights. Investment in and the modernisation of the electricity distribution grid is one the biggest challenges the EU has to overcome in the next decade. It’s a €400bn investment challenge by 2050 says Eurelectric, an … [Read more...]
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