Category: Finance

Cost of geothermal to remain high in comparison to wind and solar

Over the past decade, the installation cost of geothermal power plants has increased, from USD2,620 per kW in 2010 to USD4,468 per kW in 2020. According to IRENA, geothermal is the second most expensive renewables type by installation cost, closely behind concentrated solar power’s 4,581 USD per kW in 2020.

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Clean Energy Financing in Africa

While Africa accounts for almost one‐fifth of the world’s population, it attracts less than 5% of global energy investment. This is spread unevenly across the continent. Ten countries accounted for 90% of private investment in energy and electricity infrastructure on the continent over the last ten years, South Africa alone accounting for nearly 40%. Total energy investment in Africa was already declining prior to the pandemic and fell even more quickly in 2020, by over 20%.

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Global new investment in renewables reached USD366 billion in 2021: REN21

Solar PV and wind power continued to dominate new investment in renewables, with solar PV accounting for 56% of the 2021 total, and wind power for 40%. The strong growth in solar PV investment in 2020 expanded further in 2021, rising nearly 19% to reach USD205 billion. Wind power investment fell 5% to USD147 billion, reflecting a sharp decline in offshore wind power investment (down 45%) and a smaller increase in onshore wind power investment (up 16%).

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 The Risks of Investing in Blue Hydrogen for Europe

Elevated gas prices and a future tight market means blue hydrogen is no longer a low-cost solution; IEEFA estimates that blue hydrogen costs published by the UK government last year are now 36% higher, calling into question continued policy support for development of the technology. Blue hydrogen is an extension of the gas value chain and does not make sense as an investment during a gas price crisis.

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Renewable energy as a catalyst for investment and growth in Vietnam

Several high-profile investors have entered Vietnam’s C&I market. The French utility group EDF and its local partner, investment fund VinaCapital, have committed USD100 million over the next three years for a pipeline of 200 MWp of C&I rooftop solar power systems. South Korean conglomerate SK Group has pledged USD200 million and a 250 MWp installation target in the next few years, with local partner Nami Energy.

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Wind and Solar Corporate PPA Prices Rise Up To 16.7% Across Europe

The survey looks at the range of offer prices for solar and onshore wind PPAs across 10 European markets. Solar PPAs are generally more expensive than wind by up to 10 euros/MWh in each respective market, although the average gap has narrowed from 6.7 to 4.5 euros since 2H 2020. This is because onshore wind prices rose slightly more on average (9.4%) than solar (5.7%) over that time.

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The new norm: ESG disclosures and science-based targets

Increased public financing is required to de-risk private investment and support the development of new infrastructure. Reforms to improve transparency of climate-related data will help underpin efforts to incorporate climate risks into financial regulatory frameworks and develop transition risk modelling among financial institutions, helping to align capital allocation decisions.

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How can finance help China’s heavy industries decarbonise?

Cutting emissions from high-carbon industries, such as steel and cement making, is crucial to China’s efforts to meet its dual carbon targets, of peaking by 2030 and neutrality before 2060. But low-carbon restructuring, and adopting and commercialising greener technologies, will be tough to do at scale. A recent report from the CBI found China needs to spend between 2.2 trillion and 12.5 trillion yuan change.

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Green infrastructure investment opportunities in Indonesia

Indonesia requires USD 154 billion of investments to achieve the renewable target of 23% by 2025, and public funding is expected to only cover 51% of this requirement. The pandemic may cause further setbacks, as portions of the public budget have been diverted. In this context, the role of the private sector becomes increasingly critical for Indonesia to achieve its 2025 target and enable a sustainable recovery.

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Green bonds market in India

Today, there are several investors that have dedicated funds to invest in green bonds, and the Indian government in­ten­ds to heighten the participation of inter­na­tional investors in the domestic bond market. It is expected that the government’s green bonds will set a precedent and are likely to open up the local market further. The issuance will be part of the government’s overall market borrowing of Rs 14.95 trillion in 2022-23, tho­ugh the issue size for the green bonds has not been specified yet.

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Energy Transition’s Big Dollars and Big Themes

Energy transition investment follows familiar patterns in global capital markets. Last year, energy transition and climate tech (renewable energy, energy storage, electrified vehicles and heating, hydrogen, nuclear power, sustainable materials and the carbon capture) attracted more than $900 billion. Energy transition investment alone reached $755 billion, up by a quarter over 2020 investment, double what was invested in 2015, and a more than 20-fold increase since 2004.

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U.S. Renewable Energy M&A: Review of 2021 and Outlook for 2022

In a year in which both global and U.S. M&A activity in aggregate reached record levels, renewable energy M&A contributed to the mix in terms of high deal volume and landmark transactions. The market for renewable energy assets, portfolios and platforms remained hot, despite industry headwinds that included disruptions to supply chains, trade developments that negatively impacted the sector and policy uncertainty.

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Green finance trends and opportunities in Thailand

Thailand is well-positioned to mobilize capital from the green bond markets to support green infrastructure investment. Within ASEAN, Thailand has a mature bond market. The Thai bond market has grown rapidly in the aftermath of the 1997 economic downturn and is the second largest among ASEAN bond markets (next to Malaysia), with an annual average growth of 10%.

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Finance for climate action is not on a par with the warming world

Overall, the majority of climate finance (61%, USD 384 billion) was raised as debt, of which 12% was low-cost or concessional. High shares of domestic flows dominated in Western Europe, US & Canada, and East Asia & Pacific, accounting for 76% of the global flows while, inversely, a higher share of international finance was observed in the developing regions of Sub-Saharan Africa and South Asia.

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Implementing the Clean Energy Investments in US Bipartisan Infrastructure Law

The Build Back Better Act contains the heart of President Biden’s domestic agenda, including over $500 billion in climate and clean energy provisions that are necessary for the U.S. to meet its climate goals. While the fight for the Build Back Better Act is not over, we also must ensure that existing federal funds are put to the best decarbonization uses possible. In November, President Biden signed the $1.2 trillion Infrastructure Investment and Jobs Act, also known as the Bipartisan Infrastructure Law.

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Capital Markets Can Power Southeast Asia’s Sustainable Pandemic Recovery

Asia and the Pacific as a whole was already behind schedule in terms of meeting the goals by 2030, and the pandemic has set the region back further. One way in which governments can compensate for this is to mobilize private capital for sustainable investments. In Southeast Asia, countries have already made significant progress in this area. In September 2021, the cumulative value of ASEAN-labeled green, social, and sustainability bonds issued in Southeast Asia reached $16.4 billion.

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China’s Green Finance Agenda

China has pledged to be carbon neutral by 2060. It’s a huge ambition and will require a vast amount of domestic and international investment. China’s statement that it will be carbon neutral by 2060 will require an estimated US$21 trillion in investment, according to research from Tsinghua University in Beijing. The Chinese green bond market is the second largest market outside of the US in terms of issue size and capacity.

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How finance is driving Australia’s green transition

Finance is playing a significant role in encouraging Australia’s push towards net zero, with companies that commit to climate targets finding it easier to attract investment and raise capital, according to Jo Spillane, Global Head of Private Capital Markets at Macquarie Capital. Spillane says that one of the main vehicles through which this is happening is Australia’s pension funds, or superannuation (super) funds as they are known locally.

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Renewable Energy Financing Mechanism in European Union

To support renewable energy projects and incentivise the uptake of renewable energy sources (RES) across Europe, the EU has established a novel RES financing mechanism (REFM), under which Member States will make voluntary financial contributions to support new renewable energy projects in EU countries interested in hosting such projects, through competitive tenders for investment or operating aid.

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Green Capex in Infrastructure

Increasingly we believe investors and broader stakeholders will look more closely at how much Green Capex is being funded and how funding, cost structure and innovation will impact execution towards Net Zero, Clean Water and broader Infrastructure goals. We expect Green Capex will primarily be funded by the private and public sectors, though for some products like residential solar, appliances and electric vehicles, individuals will play an important role.

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