The Clean Energy Future Blog
By Coalition for Green Capital
The National Climate Bank Act released last week in the House by Rep. Debbie Dingell of Michigan is a landmark event for the green bank movement, showing broad momentum and support. News publications spoke with CGC Executive Director Jeff Schub for context and perspective on the new bill.
Smart Cities Dive focused on green banks at the city level, and the ways that a National Climate Bank could provide capital to help these institutions even better serve their communities. From Smart Cities Dive:
The smaller banks can help target investment in certain communities that need it, but the national bank would help mobilize investment on the necessary scale — and faster than the private sector could, CGC Executive Director Jeffrey Schub told Smart Cities Dive.
Utility Dive took a national perspective on the prospects of the legislation and explored how the National Climate Bank could directly finance projects as well as helping to capitalize state-level green banks like Michigan Saves. From Utility Dive:
Without a national bank commitment, green banks are limited from financing available innovations in emerging clean energy markets, like transportation electrification, Schub said. Local green banks could help finance charging infrastructure buildout and EV leasing in underserved communities, as well as battery swap structures and other “necessary” financial innovations on the transportation side, he said.
Check out both stories for important perspective on the National Climate Bank Act.
By Coalition for Green Capital
This post originally appeared on the site of CGC’s campaign for a federal Green Bank.
When it comes to the addition of new power generation, renewables have been rapidly gaining ground on fossil fuels. EIA has reported that wind and solar account for 64% of new planned capacity additions in 2019. This is a positive trend, but a pair of new reports from the Rocky Mountain Institute (RMI) shine a critical light on the other 34% of this pie: the continuing addition of new natural gas generation.
RMI’s reports find that economics now favor clean energy over nearly all new natural gas generation. This means that not only will consumers be paying higher-than-necessary power prices from day one of these projects’ operation, but investors in these projects face significant risks. By the 2030s, RMI estimates that even existing gas plants will have difficulty competing with new renewables. For plants being built today, that means that they’ll be in economic trouble well before they’re fully paid for. Investors in these facilities could stand to lose tens of billions.
To reach this conclusion, RMI didn’t just compare the costs of building a natural gas plant vs. a wind or solar farm. They did something more interesting: they created location-specific “portfolios” of clean energy technologies that represented the most cost-effective mix for that area. These portfolios included wind and solar, but also energy storage, energy efficiency, and demand flexibility resources.
In studying this mix of technologies, RMI makes a realistic projection based on trends that are already happening. The report cites recent examples, including this one where construction plans were changed:
In North Carolina, Duke Energy has effectively canceled a previously planned gas-fired power plant, in part because the utility was able to procure significant battery storage, EE, and demand flexibility resources to obviate the need for the gas plant through the end of its planning horizon.
Green Banks are already helping expand investment in these technologies at the state level. For example, energy storage has been a focus for new investment from the New York Green Bank; the state has announced that it “seeks to invest at least $200 million in storage related-investments, which will help drive down costs for the strategic deployment of energy storage at scale. Continued flows of capital, including from a National Climate Bank, will be important in spurring the growth of these clean energy portfolios and strengthening their ability to compete with fossil fuels.
By Coalition for Green Capital
Press Release: Sept. 9, 2019.
The Coalition for Green Capital (CGC) today submitted comments to North Carolina’s draft Clean Energy Plan in support of the establishment of a North Carolina Clean Energy Fund, and announced a partnership with the Nicholas Institute for Environmental Policy Solutions at Duke University to explore the creation and design of this institution around the Green Bank model.
Green Bank institutions may be referred to by various names, but share a set of characteristics including the mobilization of private investment through the provision of low-cost financing. North Carolina presents an exciting opportunity further exploration. The current draft of the state’s Clean Energy Plan, released in August, includes a recommendation from key stakeholders to “develop a green energy bank or statewide clean energy fund to catalyze the development and expansion of clean energy markets by connecting private capital with clean energy projects.” It calls on nonprofits, academia, and local government to determine how a North Carolina Clean Energy Fund could be established.
Responding to this call, CGC and the Nicholas Institute will work with local market participants and other stakeholders to identify the leading market gaps where a Clean Energy Fund could catalyze clean energy growth in the state. As CGC’s comments explain in further detail, a nonprofit approach may be a good fit for North Carolina. States such as Colorado and Michigan have opted to form their Green Banks as nonprofit entities to enable a faster creation process and greater flexibility in the sources of capital.
A Clean Energy Fund in North Carolina could play a key role in achieving the goals of Executive Order 80, issued by Gov. Roy Cooper in 2018, which pledges to reduce North Carolina’s greenhouse gas emissions by 40% below 2005 levels. Several cities in the state—including Asheville, Charlotte, and Wilmington—have adopted even more aggressive clean energy goals.
CGC Director of Market Development Jill Bunting said: “CGC has been working for over a year with stakeholders to understand the potential role and pathway for a Clean Energy Fund in North Carolina, and is proud to begin a formal analysis of this opportunity in partnership with an in-state expert such as the Nicholas Institute.”
The partnership with CGC is the latest example of the Nicholas Institute sharing its policy expertise to support the goals of Executive Order 80. Nicholas Institute professionals are also advising state agencies in the development of key EO80 strategic plans, including the Clean Energy Plan, the North Carolina Energy Efficiency Roadmap, the Zero Emission Vehicles Plan and the Climate Risk Assessment and Resiliency Plan.
“Our goal at the Nicholas Institute is to deliver fact-based solutions and informed guidance to decision makers. A statewide clean energy fund, or green bank, provides a great opportunity to catalyze clean energy and energy efficiency investment in the state,” said Jennifer Weiss, senior policy associate at the Nicholas Institute. “We are excited to work with the experts at CGC to assess the potential of a Clean Energy Fund for North Carolina.”
The output of this work will be a public report identifying the market needs, priority investment opportunities, and proposed first solutions for a North Carolina Clean Energy Fund. A formal project kickoff is expected to be planned for later this fall, with a public report expected in the first half of 2020.
Read more:
- CGC’s Comments to North Carolina
- CGC white paper on the emerging popularity of nonprofit Green Banks
- Annual Industry Report of the American Green Bank Consortium
- Nicholas Institute primer – Beyond Financing: A Guide to Green Bank Design in the Southeast
About CGC
The Coalition for Green Capital (CGC) is a non-profit organization focused on accelerating the growth of clean energy markets through the creation of Green Banks. CGC offers a unique and proven capacity as the leading creator, advocate, and expert on Green Banks since 2009 and works directly to support the formation of Green Banks with governmental and civil society partners, and provide on-going consulting and guidance to operating Green Banks. For more information visit coalitionforgreencapital.com/.
About the Nicholas Institute
The Nicholas Institute for Environmental Policy Solutions at Duke University helps decision makers create timely, effective and economically practical solutions to the world’s critical environmental challenges. Through its five programs, the Nicholas Institute mobilizes objective, rigorous research to confront the climate crisis, clarify the economics of limiting carbon pollution, harness emerging environmental markets, put the value of nature’s benefits on the balance sheet, develop adaptive water management approaches and identify other strategies to attain community resilience.
CGC in the News: Democratic candidates are building momentum for a National Climate Bank
By Coalition for Green Capital
In an op-ed in The Hill, Coalition for Green Capital CEO Reed Hundt describes the momentum building towards a National Climate Bank, arising from the latest climate change plans issued by the Democratic presidential candidates.
The piece cites a new report from CGC finding that with $35 billion in initial capitalization, a National Climate Bank could mobilize up to $1 trillion in investment impact. A poll also has found widespread public support for a National Climate Bank.
The piece concludes:
“As images from Hurricane Dorian blanket the news, we cannot afford to leave any tool unused that could help us drive the clean energy transition more quickly. Bold plans for public investment can and should be paired with a Climate Bank to harness the power of the private sector on a trillion-dollar scale. If candidates are serious in their calls for an 100 percent clean energy system, it’s time to make the most of each dollar of funds, and it’s past time for delay.”
For more, see the full op-ed: Democratic candidates are building momentum for a National Climate Bank
By Coalition for Green Capital
Press Release: Sept. 5, 2019.
The Coalition for Green Capital (CGC) today released a new white paper illustrating how a National Climate Bank capitalized with just $35 billion could mobilize up to $1 trillion in total public and private investment. These investments could rapidly and cost-effectively accelerate the clean energy transition by providing financing to clean energy projects.
The structure of the proposed National Climate Bank is based on the National Climate Bank Act introduced in July by Senators Ed Markey (D-MA) and Chris Van Hollen (D-MD). The bill establishes an independent nonprofit institution with the goal of maximizing greenhouse gas reductions per public dollar, which would be capitalized with public funds and be chartered to operate for 30 years.
The idea of a National Climate Bank has also become a part of the 2020 Democratic presidential campaigns. Sen. Kamala Harris’ new climate plan endorses the National Climate Bank Act, and polling indicates widespread public support for the idea. Other candidates including Pete Buttigieg and Julián Castro propose similar finance institutions: the creation of a $250 billion Clean Energy Bank, and $200 billion Green Infrastructure Fund, respectively.
CGC’s report compares the proposed Climate Bank with other relevant institutions including commercial banks, global development banks, and existing Green Banks. It studies the established track records of these institutions to set forth reasonable expectations for the techniques the Climate Bank could use and the results it could achieve, finding that $1 trillion in total investment impact is achievable from $35 billion in initial capitalization.
Reed Hundt, CGC’s CEO, said: “The National Climate Bank is an elegant policy solution that makes the most of every public dollar, without raising energy costs for consumers. With the impacts of the climate crisis becoming more apparent by the day, there’s no time to waste. We must mobilize a massive wave of investment to get big projects funded and transition the economy from carbon to clean. The Climate Bank provides a clear and practical way to do exactly that.”
This paper is the first in a series which will explore the proposed National Climate Bank, putting financial techniques and concepts into plain language and adding context and detail to the potential workings of the new institution.
The full report is available here: Mobilizing $1 Trillion Towards Climate Action.
For more information:
By Coalition for Green Capital
This post originally appeared on the site of CGC’s campaign for a federal Green Bank.
Ahead of CNN’s series of climate change town halls, the 2020 Democratic presidential candidates have been busy updating their climate change plans and proposals. The plans are wide-ranging, touching on labor, agriculture, environmental justice, research and development, national security, and more.
They have good reason for taking this expansive focus, as climate change is a challenge that touches every element of our economy and our future. However, one facet is particularly urgent: the clean energy transition.
The power sector has a limited time to fully transition from fossil to clean. Market forces are already having an effect, but they’ll need a boost if we are to avoid the worst impacts of climate change. A wave of investment must be directed towards financing new renewable generation and accelerating the retirement of fossil-fueled generation.
The 2020 Democrats have shown awareness of this urgency, and are increasingly gravitating towards the Green Bank model. Green Banks exist to address this problem, maximizing the greenhouse gas reduction impact of each public dollar by targeting projects on the edge of commercial viability and drawing in private investment. A recent CGC poll also found widespread public support for the idea of a National Climate Bank.
Overall, five of the top ten candidates either explicitly or indirectly support the expansion of the Green Bank model at a national scale. A more detailed look at each of their proposals follows here, focused specifically on how they would make use of this critical policy tool to mobilize investment.
Clean Energy Timeline: Sets a target to meet 100 percent of electricity demand with carbon-neutral power by 2030.
Clean Energy Investment: $10 trillion in combined public and private investment over the next 10 years.
Support for Green Banks: Yes, directly.Supports the creation of an independent nonprofit National Climate Bank, as proposed in the National Climate Bank Act introduced by Senator Ed Markey.
Quote: “To help communities fund clean energy projects, Kamala will mobilize private investment through mechanisms like a green bank as outlined in Senator Markey’s National Climate Bank Act. These types of finance strategies can reduce emissions and build climate resilience in communities across the nation by accelerating deployment and adoption of clean energy technologies like community solar, especially for low-income and middle class communities.”
Clean Energy Timeline: By 2035, sets a target of 100% renewable and zero-emission energy in electricity generation, with an interim target of 100% carbon-neutral power by 2030.
Clean Energy Investment: Federal investment of $3 trillion which will leverage additional trillions in private investment.
Support for Green Banks: Yes, indirectly. Takes up the policy mantle of Gov. Jay Inslee (whose plan included a National Climate Bank) and mentions how public investment could leverage additional private investment. Discusses expansion of federal financing programs like the Department of Energy’s Loan Guarantee Program. Does not mention a standalone National Climate Bank, although such an institution would not be inconsistent with these goals and principles.
Quote: “I’ll create incentives for private investment in energy efficiency and electrification in residential and commercial buildings, including through tax credits, direct spending, and regulatory tools. We’ll expand refundable credits for installing energy efficiency upgrades, and extend existing tax credits for wind and solar power. And we’ll make it easier for institutional capital to invest in portfolio-scale green construction and retrofits, scaling up clean energy in large commercial and residential projects.”
Clean Energy Timeline: Zero emissions from electricity generation by 2035.
Clean Energy Investment: Campaign estimated to Vox that the government could directly invest $1.5 trillion to $2 trillion.
Support for Green Banks: Yes, directly. Calls for the creation of an American Clean Energy Bank, capitalized with $250 billion, which would invest in clean energy project along the model of existing state and local Green Banks.
Quote: “Building on the success of green banks in states, the American Clean Energy Bank will have $250 billion of initial capitalization. It will provide loans, grants, credit enhancements, and loan guarantees to finance clean energy technologies and energy efficiency, waste and water, and resilient infrastructure projects that create good local jobs, through which the bank can leverage up to six times more private-sector capital.”
Clean Energy Timeline: No specific timeline for the power sector. Economy-wide target is net zero emissions by 2050 and halfway there by 2030.
Clean Energy Investment: 10-year mobilization of $5 trillion directly leveraged by a fully paid-for $1.5 trillion investment
Support for Green Banks: Yes, indirectly. Calls for the creation of a new dedicated finance authority to spur investment in green infrastructure.
Quote: “As President, Beto will spur investment in infrastructure necessary to cut pollution across all sectors [including] [m]ore than $3 trillion through proven existing financing institutions, like the Rural Utility Service, and a new dedicated finance authority, which will have on its board not only the brightest minds in finance but also members of the unions that would help build this infrastructure.”
Clean Energy Timeline: All electrical power to be carbon-neutral by 2030 and be entirely clean, renewable, and zero-emission by 2035.
Clean Energy Investment: $10 trillion in federal, state, local, and private investments over the next decade.
Support for Green Banks: Yes, directly. Supports the creation of a new Green Infrastructure Fund, which would mobilize additional private investment into clean energy and infrastructure.
Quote: “Establish a $200 billion Green Infrastructure Fund. Investing in green infrastructure is critical to meeting climate goals and building resilient communities. The fund would support investments into climate resilience infrastructure through grants and loans that fund projects with strong union protections in construction, maintenance, and operation. This fund would aim to leverage an additional $600 billion in state, local, and private investments.”
Clean Energy Timeline: 100% clean energy by no later than 2030.
Clean Energy Investment: About $2.4 trillion directly to clean energy, energy storage, and smart grids, plus $3.1 trillion to building energy efficiency and electrification. Headlined as a $16.3 trillion plan.
Support for Green Banks: Little mention of mobilizing private investment; new power generation built under the plan would be fully publicly owned.
Quote: “The renewable energy generated by the Green New Deal will be publicly owned, managed by the Federal Power Marketing Administrations, the Bureau of Reclamation and the Tennessee Valley Authority and sold to distribution utilities with a preference for public power districts, municipally- and cooperatively-owned utilities with democratic, public ownership, and other existing utilities that demonstrate a commitment to the public interest.”
Clean Energy Timeline: No power-specific target. Economy-wide, net-zero emissions no later than 2050.
Clean Energy Investment: Federal investment of $1.7 trillion over the next ten years, leveraging additional private sector and state and local investments to total to more than $5 trillion.
Support for Green Banks: Unclear. Broadly discusses the idea of leveraging private sector investments, and supports measures like a Task Force on Coal and Power Plant Communities, which could mobilize investment into specific communities, although this is only a subset of what a Green Bank could do.
Quote: “To support coal and power plant workers and their communities, President Biden will make an unprecedented investment building upon the vision put forward in the Obama-Biden Administration’s Power+ Plan. And, he’ll establish a Task Force on Coal and Power Plant Communities, as the Obama-Biden Administration did for Detroit when the auto industry was in turmoil. For example, the Task Force will help these communities access federal investments and leverage private sector investments to help create high-paying union jobs based upon the unique assets of each community.”
Clean Energy Timeline: No power-specific target. Economy-wide, carbon-neutral by 2045.
Clean Energy Investment: Directly invest over $3 trillion dollars by 2030
Support for Green Banks: Little mention of new institutions that could specifically mobilize both public and private investment into clean energy projects. Clean energy investment is mostly described as direct federal investment via purchasing, grants, and tax credits.
Quote: “If we are serious about getting to net-zero emissions, we need to supercharge our investment in the kind of clean energy technology and infrastructure — wind turbines, solar panels, electric vehicles, and more —that will power our green economy. Cory’s plan will invest an additional $1.5 trillion by 2030 in clean energy, energy storage, and electric vehicles, spurring a huge market for these products and incentivizing American businesses to compete to create the highest quality and lowest cost options.”
Clean Energy Timeline: 100% zero-emission electricity by 2035.
Clean Energy Investment: $4.9 trillion over 20 years.
Support for Green Banks: $200 billion is allocated towards grid modernization, but it is unclear exactly how it would be used.
Quote: “In order to achieve 100% renewable electricity by 2035, we need to create an economic drive for utilities to invest in updating their infrastructure while motivating innovation. We can do this with a “Race to the Top” type competition where utilities compete to enact certain reforms and the winners receive federal monies to reduce the capital costs of their investment.”
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