A half-day workshop with case study as part of the Berlin Energy Transition Dialogue (BETD) 2020
Global installed capacity of photovoltaic (PV) systems in 2018 increased by 26% relative to the previous year to a level of 509.3 TW. For the eighth year in succession, PV outpaced all other types of renewable energy technologies in terms of annual investment volumes, making it the most dominant and important renewable energy technology. Compared to wind energy, PV already is the cheapest energy generation source in most southern and high solar irradiation countries.
Emerging markets have to supply the increasing power consumption of their population and economy. This requires huge investments. Despite many public programmes and initiatives, it is the private sector with debt and equity providers that needs to step forward and develop and realize renewable energy projects.
Focus
This workshop is designed for interested practitioners that want to better understand:
- Relevant bankability aspects of the PV technology and the financing approach for photovoltaic projects,
- Main risks associated with PV projects and common mitigation techniques from the finance provider’s perspective.
- Step-by-step cash flow planning process for a sample project and its financial assessment using project finance ratios
Governments and financial supervisors are increasingly recognising the importance of sustainable finance in achieving financial stability and meeting the goals of the Paris Agreement. Green and innovative finance models and a shift away from carbon-intensive assets are a vital funding stream for investments. Green standards could help identify which projects are in line with the energy transition and to align investments accordingly.
Buildings account for more than 30% of global final energy consumption, and are thus some of the largest consumers of energy in the world. With future demographic increases forecast, this figure is set to rise. Currently, the main focus of building policies is often on new buildings. However, the potential lies, at least in the Northern hemisphere, in existing buildings. And this sector is in dire need of fresh money for investments in renovation.
In a parallel set of events, there is growing discussion in international public banks, such as the European Investment Bank, on the need to help large-scale investors and pension funds diversify their portfolios. Insurance companies are in fact hit in two ways by climate change, firstly by more significant damages to insured properties and secondly by the loss of profitable dividends such as investments in the oil sector.
Linking these two processes, what can be done to redirect global private investments to the building sector?
Pricing greenhouse gas emissions is a way to put a price tag on the costs of their negative externalities in order to reduce and remove market distortions. Tools range from voluntary compensation, via taxation and special levies and fees to different trading schemes, and their implementation varies geographically. A border-adjustment tax would help adjust prices across the variety of schemes to avoid carbon leakage and resulting market distortions. What impact do different CO2 pricing mechanisms and adjustment taxes have on global trade?
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