Category: Finance

U.S. Renewable Energy M&A: Review of 2023 and Outlook for 2024

U.S. Renewable Energy M&A: Review of 2023 and Outlook for 2024

Apr 1, 2024 |

Entering 2023, renewable energy mergers and acquisitions (“M&A”) faced significant headwinds, including sustained high interest rates, inflationary pressures, supply chain constraints, government support program uncertainty and grid reliability. As a result, renewable energy deal volume declined significantly in 2023 from 2022 levels. Despite these challenges, investor optimism grew during the back half of the year with easing supply chain bottlenecks and legislative clarity on the $369 billion energy and climate spending earmarked by the Inflation Reduction Act (“IRA”).

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Green Hydrogen Economics in Southeast Asia

Green Hydrogen Economics in Southeast Asia

Mar 11, 2024 |

The cost of electricity makes up 30%–60% of the hydrogen levelized cost of energy (LCOE). As a result, when the LCOE of solar and wind power decreases to US$20 per MWh by 2030E, the cost of green hydrogen will fall to US$1.1–US$2 per kg by 2030E (IESR, 2022b). By 2050E the cost of green hydrogen could fall below US$1 per kg, with proton exchange membrane (PEM) electrolysis being even cheaper than alkaline electrolyser costs by then. 

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Renewable Energy Certificates in US: The Currency of the Clean Energy Market

Renewable Energy Certificates in US: The Currency of the Clean Energy Market

Feb 26, 2024 |

RECs play a crucial role in the renewable energy landscape, serving as essential instruments for verifying and substantiating claims of renewable electricity use. They drive the development of emissions-free renewable resources by providing critical financial support for projects. As an accessible and equitable option for a significant portion of electricity consumers, RECs are a key tool in promoting widespread access to the environmental benefits of renewable energy.

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Over $50 Billion Flow to Climate-Tech Startups in a Stormy Year

Over $50 Billion Flow to Climate-Tech Startups in a Stormy Year

Feb 17, 2024 |

Climate-tech companies raised $51 billion in venture capital and private equity funding across more than a thousand deals tracked by BloombergNEF last year. Though this was 12% lower than 2022, the slide was a fraction of the 35% reported for all startups by Pitchbook. Most of the funding went to low-carbon energy and low-carbon transport companies. From a deals perspective, BNEF’s Climate-Tech VC/PE Investment Database shows a 15% decline in the number of deals completed in 2023 compared to 2022.

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Green Financing Policies in Cambodia

Green Financing Policies in Cambodia

Jan 29, 2024 |

The Royal Government of Cambodia (RGC) has taken steps to include green financing in its sustainable growth strategies. The potential provider of green financing in Cambodia is Green Climate Fund. Banking and financial institutions play an important role in Cambodia and significantly ensure a good investment climate for large development or investment projects. The investment projects continue providing employment opportunities, income and developmental progress of Cambodia.

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Financial Considerations for Green Hydrogen Development

Financial Considerations for Green Hydrogen Development

Jan 15, 2024 |

Like renewables, which have experienced significant cost reduction over the last decades, the manufacturing cost of green hydrogen equipment is projected to fall steeply in the coming decades. Green hydrogen is expected to become one of the most cost-competitive hydrogen production technologies in the long run. In 2050, levelized production costs could fall below $1/kgH2 in Chile, and below US$1.1/kgH2 in north and sub-Saharan Africa, Mexico, China, Australia, and Indonesia.

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Climate Finance: What to expect at COP28

Climate Finance: What to expect at COP28

Dec 4, 2023 |

A key ambition of COP28 is to achieve a consensus on tripling the global renewable energy capacity and doubling energy efficiency measures by the end of the decade. This requires substantial investments, not only in these interventions but also in larger energy systems, transportation, agriculture, forestry and other critical areas.

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Growing Cost-Competitiveness of Green Hydrogen in MENA

Growing Cost-Competitiveness of Green Hydrogen in MENA

Nov 20, 2023 |

Gas-rich regions like the Middle East are strategically positioning themselves to leverage their natural advantages by venturing into the hydrogen market, targeting markets in Europe and Asia. Recent geopolitical developments, particularly the Ukraine conflict, have also unleashed a profound impact on gas prices globally. This has elevated the opportunity cost associated with producing blue hydrogen, whose production is tethered to gas pricing, amplifying the significance of pricing dynamics in the equation.

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Scaling Up the European Green Hydrogen Market

Scaling Up the European Green Hydrogen Market

Nov 5, 2023 |

Europe’s hydrogen market is beginning to take shape. After a decade of much debate, a meaningful hydrogen market and a multibillion-euro market for green hydrogen now seems to be emerging on the horizon. Meaningful demand is expected to emerge if planned regulations come into effect. Several industrial sectors, primarily current gray hydrogen consumers, may be willing to pay around or above €6/kg for green hydrogen by the end of the decade.

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Bridging the Gap: Climate finance strategies to achieve net zero

Bridging the Gap: Climate finance strategies to achieve net zero

Oct 29, 2023 |

According to CPI’s estimates, the global climate finance flows in 2021 reached about $850 billion, a 28 per cent year-on-year increase from 2020. The investment continued to rise, reaching $1 trillion in 2022. The rate of climate investment is lower than expected as these flows need to increase by 625 per cent by 2030 to meet the Paris Agreement goals. According to the report, with each year of inaction, this gap will continue to widen, leading to increased physical, financial and social risks.

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Marked Improvement: Report on global trends in renewables’ cost competitiveness

Marked Improvement: Report on global trends in renewables’ cost competitiveness

Oct 22, 2023 |

The global weighted average cost of power generation has significantly declined across solar PV, concentrated solar power (CSP), onshore wind, geothermal and bioenergy technologies. For instance, in 2010, the global wei­gh­ted average levellised cost of energy (LCoE ) of onshore wind was 95 per cent higher than the lowest fossil fuel-fired cost in 2022. Similarly, the global weighted average LCoE of new onshore wind projects was 52 per cent lower than that of the cheapest fossil fuel-fired solutions.

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Clean Hydrogen Financing in Asia

Clean Hydrogen Financing in Asia

Sep 25, 2023 |

Hydrogen is an emerging clean energy technology and energy vector with many proposed use cases. There will be uncertainties as regard to whether hydrogen will be the most economical clean energy solution for each of the proposed sectors and use cases considered in the analysis. Commercial risks also need to be taken into consideration.

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Asia’s clean energy investment needs and the role of blended finance

Asia’s clean energy investment needs and the role of blended finance

Sep 10, 2023 |

Blended finance is an international public–private funding mechanism aimed at mobilizing private funds for infrastructure investment in emerging and developing economies (EMDEs). However, expanding the scale of blended finance in clean energy will require innovative efforts from the international community to reform traditional development finance approaches.

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Unlocking Clean Hydrogen Investments in U.S. Climate Policy

Unlocking Clean Hydrogen Investments in U.S. Climate Policy

Jul 28, 2023 |

Two recent laws in the U.S. — the Inflation Reduction Act (IRA) and Bipartisan Infrastructure Law (BIL) — provide historic levels of investment in climate action and low-carbon technologies, including for the development and deployment of clean hydrogen. With over $9.5 billion in funding from the BIL and enhanced tax credits in the IRA, the stage is set for a rapid increase in hydrogen production and use over the next 5-10 years.

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US to increase in attractiveness for renewable energy investment: ACORE

US to increase in attractiveness for renewable energy investment: ACORE

Jul 10, 2023 |

Investment in the U.S. renewable energy and energy storage sectors in 2022 remained steady at $54.8 billion, while still falling short of the annual investment needed to achieve the administration’s objective for power sector decarbonization by 2035. The IRA has already increased companies’ participation in the market in 2023. All developers and most investors plan to increase their activity in the U.S. renewable energy sector compared to last year. Eighty-four percent of investors plan to increase their renewable energy investment by 5% or more.

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US Clean Energy Finance Trends 2023

US Clean Energy Finance Trends 2023

Apr 24, 2023 |

The U.S. renewable energy market is poised for unprecedented growth. The passage of the Inflation Reduction Act (IRA) in August 2022 presents many opportunities for developers and investors. The IRA contains $369 billion in investments to boost clean energy and curb greenhouse gas emissions. One of the biggest wins is the IRA’s long-term extension and expansion of federal tax credits.

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Sustainable Finance: Indian government concludes sovereign green bond sale of Rs 160 billion

Sustainable Finance: Indian government concludes sovereign green bond sale of Rs 160 billion

Mar 24, 2023 |

In February 2023, the Indian government concluded the sale of Rs 160 billion in SGBs. The first tranche was released in January 2023, raising a total of Rs 80 billion. Of this, Rs 40 billion was raised for a five-year tenor (2028) at a yield of 7.1 per cent. The remaining Rs 40 billion was issued for a 10-year tenor (2033) at a yield of 7.29 per cent. The second tranche of SGBs was released in February 2023, also for Rs 80 billion, divided into two tranches of Rs 40 billion each.

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Financing the Transition: Energy Supply Investment and Bank Financing Activity

Financing the Transition: Energy Supply Investment and Bank Financing Activity

Mar 5, 2023 |

In 2021, banks financed 81% as much low-carbon energy supply as fossil fuels – for every dollar of bank financing activity supporting fossil-fuel supply, 0.8 supported low-carbon energy. While financing is a different metric to capital invested, this ratio broadly reflected real-economy investment activity at 0.9:1. For every dollar invested in fossil fuel supply in 2030 this should be matched with four times as much being invested in low-carbon energy supply.

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<strong>Financing Hydrogen Export Projects</strong>

Financing Hydrogen Export Projects

Feb 12, 2023 |

This paper, for illustration, examines an Archetype project, using 1GW of solar generation to produce 250 ktpa green ammonia be sold at a fixed price of USD 770/tonne (just sufficient to meet the assumed cost of capital). This compares with a 5-year average price of a little over USD 600/tonne but over USD 1,300/tonne. Assuming a 20-year offtake contract and a 15-year loan (with a 3- 27 year construction period), the Archetype project can support a DER of around 65 per cent.

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Solar economics: The PTC vs. ITC decision

Solar economics: The PTC vs. ITC decision

Jan 8, 2023 |

Under the Inflation Reduction Act (IRA) signed into law in 2022, solar projects may now opt for either an investment tax credit (ITC) or a production tax credit (PTC). What’s at stake for solar developers across the country is making a choice between an upfront investment-based incentive versus a production-based incentive applicable for the project’s first ten years of operations. This decision of whether to opt for PTC or ITC is a balancing act that depends on three primary considerations: expected capacity factor, investment (capital and financing) costs, and bonus eligibility.  

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