Energy Finance

ENERGY FINANCE

Transitioning to a low-carbon energy system could provide plenty of opportunities for investors, businesses, and consumers alike. However, current business and regulatory models are ill-suited to take advantage of these new opportunities. CPI works with policymakers and business leaders to find solutions that make the transition to low-carbon energy an economic winner.

 

Our Focus

Led by Executive Director David Nelson, CPI’s energy finance program works with governments, utilities, companies, banks, investors, and foundations around the world to understand the true cost of the transition to a low-carbon energy system, to evaluate and improve policy, and to design new financial vehicles that can lower costs and align investment returns from low-carbon energy assets with investors’ needs. These actions can maximize the financial benefits of transitioning to a low-carbon energy system while minimizing the cost to public budgets and private balance sheets.

Key Projects

  • We have explored how the potential stranding of fossil fuel assets will affect different countries and regions and how policies can help reduce the cost of transition to low-carbon energy.
  • Our work on the transition to low-carbon electricity looks at how to scale up renewable energy through adjustments to current models of electricity generation, transmission, delivery, and finance.
  • Our analysis shows that creative policy solutions could reduce the cost of renewable energy support by as much as 30% in developing countries.
  • We assessed and quantified the potential for expanding institutional investment in renewable energy through direct investment, corporate investment, and pooled investment vehicles taking into account policy, financial and regulatory barriers.
  • Our case studies on large-scale renewable electricity generation projects in the United States and Europe evaluated how policy affects project economics, as well as the cost and availability of financing.

Energy Finance News

PUBLICATION

Flexibility: the path to low-carbon, low-cost electricity grids

April 25, 2017

Wind and solar have become established resources for low-carbon electricity around the world. Cost declines for those technologies now allow ...

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BLOG

How are European policymakers and investors embracing the ‘new normal’ in EU renewable energy policy?

December 7, 2016

Costs have declined dramatically in the renewable energy sector and deployment levels are at an all-time high. But why does ...

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PUBLICATION

European Renewable Energy Policy and Investment

December 6, 2016

Europe’s policy and finance environment has enabled some of the fastest deployments of renewable assets globally. In 2016, it ...

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BLOG

EU winter package brings renewables in from the cold

December 1, 2016

Christmas came early yesterday in Brussels, with the release of some heavy reading for the EU’s parliamentarians to digest ...

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BLOG

Millennials: the new power generation fueling the future with clean energy

October 12, 2016

You might expect wind industry executives at last week’s AWEA Wind Energy Finance & Investment Conference 2016 in New York to talk enthusiastically about the transition to clean energy. But over the last year, utility companies and Independent Power Producers (IPPs) have joined them – proclaiming that that the clean energy future has arrived now – much sooner than any of us thought possible.

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PUBLICATION

Beyond YieldCos

June 27, 2016

US-based YieldCos, such as Terraform Power and NRG Yield, raised equity worth $23 billion dollars by mid-2015, only to see their share prices fall by as much as 60% just a few months later. The rise and fall of new investment ideas nearly always provides valuable lessons, and the US YieldCos are no exception.

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BLOG

Two policy improvements to drive more renewable energy deployment through mini-grids in Uttar Pradesh, India

April 26, 2016

This post is co-authored by Stephen Comello, Associate Director of the Sustainable Energy Initiative at Stanford Graduate School of Business ...

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PUBLICATION

Driving Foreign Investment to Renewable Energy in India: A Payment Security Mechanism to Address Off-Taker Risk

April 18, 2016

As India prepares to meet its increasing energy demands, which will likely double by 2030, the government has set a path towards ambitious renewable energy targets of ...

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PUBLICATION

Policy and investment in German renewable energy

April 14, 2016

This report examines the availability of capital for renewable energy, the cost-effectiveness of different mixes of capital and investors used in meeting Germany’s medium and long-term deployment goals, and the potential impact of policies on this mix of investment.

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BLOG

EU Curtailment Rules Could Increase German Wind Costs by 17% by 2020

April 14, 2016

This week, members of CPI’s Energy Finance team traveled to Brussels to present and discuss findings from our analysis ...

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PUBLICATION

Government Assets: Risks and Opportunities in a Changing Climate Policy Landscape

March 22, 2016

This paper helps policymakers and stakeholders better understand how issues around climate related policies affect national budgets. It also offers suggestions about how policymakers and stakeholders can develop appropriate strategies.

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BLOG

Two instruments for attracting foreign investment to renewable energy in India

March 17, 2016

As India prepares to meet its increasing energy demands, which will likely double by 2030, the government has set a ...

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PUBLICATION

Getting the most from your green: An approach to using public money effectively through green banks and other low-carbon financing

December 8, 2015

This document addresses the effective uses of public financial interventions for low carbon projects. It provides an overview of Climate Policy Initiative’s (CPI’s) approach
to determining the most efficient ways in which green banking and other public financial interventions could support the transition to a low-carbon economy.

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PUBLICATION

Slowing the Growth of Coal Power in China: the Role of Finance in State-Owned Enterprises

December 15, 2015

In the past few decades, China has experienced rapid growth in coal power, leading to the country’s increased CO2 emissions, which reached 8.25 billion tons in 2012 (IEA). Climate Policy Initiative examines the financing of Chinese coal power plants, beginning with an overview of the current state of the coal power sector, with the aim of exploring financing levers which could optimize electric power growth while also greening the system.

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BLOG

Instruments of Change: Raising Investments for India’s Climate Commitments

December 18, 2015

The international climate agreement that emerged from the Paris negotiations this past weekend marks a historical turning point for the whole world, but particularly for India.

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PUBLICATION

Slowing the Growth of Coal Power Outside China: The Role of Chinese Finance

November 25, 2015

In recent years, China has grown into a major provider of coal power finance in overseas markets, replacing financing by...

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BLOG

Institutional Investors Can Help India Meet Its Climate Action Pledge

October 8, 2015

Earlier this month, India announced its pledge for action on climate change beyond 2020, ahead of the United Nations summit ...

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BLOG

Three ways to attract domestic institutional investment for renewable energy projects in India

September 10, 2015

In order to achieve India’s renewable energy targets of 175 GW of solar and wind power by 2022, approximately ...

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PUBLICATION

Reaching India’s Renewable Energy Targets Cost-Effectively: A Foreign Exchange Hedging Facility

June 17, 2015

India has ambitious renewable energy targets for 2022, but because of the government’s limited budget, a cost-effective policy path is crucial to achieving those targets. Achieving India’s renewable energy targets cost-effectively faces two key barriers – a shortage of debt and inferior terms of debt.

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PUBLICATION

Reaching India’s Renewable Energy Targets: Effective Project Allocation Mechanisms

May 13, 2015

The Government of India has set ambitious renewable energy targets for 2022, in order to achieve its climate goals and enhance energy security. Given India’s budget constraints, a cost-effective policy path will be crucial to achieving these targets. One way to reduce the cost of government support needed to achieve its renewable energy targets is through the tariffs it uses to procure renewable energy.

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PUBLICATION

Reaching India’s Renewable Energy Targets Cost-Effectively

April 14, 2015

The Government of India has ambitious renewable energy targets, but limited financial resources to meet those targets. CPI examines how much it would cost the government to reach its renewable energy targets, by comparing the levelized cost of electricity from renewable energy to a baseline fossil fuel in absence of any subsidies – whether explicit or implicit; estimating the total cost of support for renewable energy under accelerated depreciation, which is the most cost-effective of existing policies; and investigating federal policy options to make this support even more cost-effective.

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BLOG

Adjustments to Indian renewable energy policies could save up to 78% in subsidies

April 21, 2014

Recently, the Government of India announced plans to award licenses for an additional one gigawatt of solar in the next ...

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