1. Financing Renewable Energy
An Update on Barriers and Proposed Solutions
By Kathleen Wade
U.S. State Department, Office of Global Change in charge of international climate change-related issues, including negotiations like in Copenhagen, worked with the Foreign Affairs Officer in charge of financial issues and did several projects for him. Each were short and distinct, but many revolved around renewable energy. Now we all know how important clean energy is, but it’s not diffusing fast enough and one of the main challenges is finding finance

2. Barriers to Investment
Risk is greater for renewable energy projects than traditional energy projects
Intermittency
Grid connection
Economies of scale
Perceived as a high-risk, low-return investment
Intermittancy- needs backup power supply if wind’s not blowing
Grid connection- infrastructure not in place, often needs to be in remote areas that may be far from the grid
Economies of scale- technology is still developing, so there is a learning curve for operators, because of this, operations tend to be small scale

3. New Financial Models boo
Public-private partnership to reduce risk. Private equity funds targeted specifically for renewable investments and supported by government policies.

4. New Policies Feed-in tariffs
Utilities required to purchase power from renewable sources at fixed rate
Rate rachets down over time to account for technological improvements
Reduces uncertainty in rate of return
Has worked awesome in Germany to stimulate the growth of wind power

5. International Partnerships
Attended by ministers from 24 countries, including all major emitters, 11 New intergovernmental initiatives related to green buildings, solar power, Carbon Capture and Storage technology, and rural cooking stoves
- Major Economies Forum, taskforces ranging from industry to vehicle emissions to solar power
Clean Energy Ministerial- July 19-20, 2010

6. Carbon Markets
Certified emissions reductions can be sold at market price
UN Clean Development Mechanism certifies offsets for European market
Not yet a significant source of finance for renewable energy
Bogota Columbia TransMilenio bus transit system, registered with the CDM
strict qualifications for CDM project, takes years to certify, but reforms may be made
Thinking certifying emissions reductions for whole sectors, which may encourage utilities to back clean energy projects, but carbon markets tied to Kyoto, which ends in 2012

7. Go Green?
Worlds of finance and clean energy must meet in order to spur low-carbon growth and assure a safe climate future