The Clean Energy Future Blog

By Coalition for Green Capital

In Bjorn Lomborg’s recent New York Times op-ed, “The Poor Need Cheap Fossil Fuels,” the author asks readers to simply “face it,” and accept that the only way to bring electricity and its associated economic growth to the developing world is by burning carbon and pollutant-emitting fossil fuels.

This view represents a stale and unimaginative approach to problem-solving. It ignores the reality that many renewable technologies are already economically viable. The combination of these new technologies and creative investment policies can bring life-saving power and economic growth to the developing world without doubling-down on destructive policies.

First Lomborg is wrong when he assumes that environmental damage from carbon emissions comes in the future. China, which Mr. Lomborg holds up as a model of economic development, faces significant economic consequences from its electricity policies today, not just in the ever-coming future. China’s fossil fuel-driven economic growth is so environmentally ruinous that the estimated cost of this damage in 2010 was 1.54 trillion renminbi, or 3.5% of GDP.

Second, renewables are not an expensive panacea reserved only for future consideration. Rather, clean technologies like wind, solar and geothermal are economically viable today and are being deployed around the world to reduce carbon emissions. China, for instance, has the most installed wind power of any nation on earth. And a 2012 McKinsey analysis found that solar is the cheapest power source for consumers in developing nations without a centralized power grid. If Lomborg is looking for a cheap and reliable power source for the world’s neediest, why doesn’t he face it that renewables can be the answer?

Third, wealthy nations can ensure that renewable power becomes even cheaper through low-cost financing. Organizations like the IFCand OPIC, in partnership with private investors, provide critical low-interest loans, insurance, and guarantees to renewable projects in developing nations. These tools drastically reduce a project’s cost of capital and lower the price of the associated clean electricity. These public-private partnerships also draw in far more overall investment and stimulate economic activity.

Lomborg says that he supports the use of fossil-fuels “until we can make a global transition to a greener energy future.” But this transition won’t just happen as a matter of course. And it certainly will not happen by advocating damaging, counter-productive policies. Don’t passively excuse yourself from helping this critical effort. Examine the facts and contribute new approaches like the ones listed above.

Lomborg is right in one way, though. We do need to transition to a new power platform. Cheap, clean, and abundant energy should replace expensive, polluting, and inefficiently consumed power. Lessons should be drawn from the telecommunications sector, which experienced a rapid transition in information and communication technology in the 1990s. As described in Zero Hour: Time to Build the Clean Power Platform, the new book by Reed Hundt, former chairman of the Federal Communications Commission, new technology, regulatory reform and low-cost capital changed the platform for all modes of information consumption in less than a decade. We should use a similar approach to move to a cleaner, carbon-free power platform. And we cannot let those who want to repeat the mistakes of the past hinder this task.

CGC Vice President Jeffrey Schub responds to Bjorn Lomborg’s New York Times op-ed “The Poor Need Cheap Fossil Fuels” in his own op-ed “Clean Energy for the Developing World Today.” Please comment to join to discussion.

By Coalition for Green Capital

According to a new report published by the Department of Energy’s Lawrence Berkeley National Laboratory, installed prices of commercial and residential solar PV systems fell by about 6-14% between 2011 and 2012. The report shows that this drop in price stems from the reduced cost of PV modules. The remainder of the cost, therefore, is tied to the “soft costs” associated with solar PV installations. Soft costs include panel-mounting hardware, labor, taxes, permitting and zoning, and fees.

These soft costs also help explain why solar remains more expensive in the US than in other countries such as Germany Australia, and Italy. Germany, for example, hosts a single national market for solar with standardized processes and regulations. The US, however, has a fragmented regulatory system requiring complex policies, permitting, and zoning. These time-consuming and cumbersome requirements divert resources from solar installers and discourage them from expanding into new jurisdictions.

So how can green banks help? If one considers the cost of capital to qualify as a “soft cost,” green banks can effectively lower the soft costs associated with solar PV by making capital more accessible and affordable to installers. Furthermore, if the availability of inexpensive capital is able to attract enough investors and installers to expand the solar PV market, the policy, permitting, and zoning processes associated with solar installations should become better understood and less laborious.

Sources

“Tracking the Sun VI” – Galen Barbose, Naim Darghouth, Samantha Weaver, and Ryan Wiser, July 2013.

 “World Solar Prices Will Keep Dropping, but US Costs Will Stay Relatively High,” Henry Gass, August 15, 2013.  

By Coalition for Green Capital

A rise in sea levels threatens the viability of more than 1,400 cities and towns, including Miami, Virginia Beach and Jacksonville, unless there are deep cuts in heat-trapping greenhouse gas emissions, says an analysis out Monday. Prior emissions have already locked in 4 feet of future sea-level rise that will submerge parts of 316 municipalities, but the timing is unclear and could take hundreds of years, according to the paper in the Proceedings of the National Academy of Sciences. If global warming continues at its current rate through the year 2100, at least an additional 1,100 cities and towns will be mostly under water at high tide in the distant future.

“It’s like this invisible threat,” says author Benjamin Strauss,a scientist at Climate Central, a non-profit, non-advocacy research group based in Princeton, N.J., that’s funded by foundations, individuals and federal grants. He says these sea levels are much higher than what’s predicted this century — typically 1 to 4 feet — because climate change multiplies their impact over hundreds of years. He says many people have the mistaken notion that if greenhouse gas emissions stop, the problem of sea levels rising will go away. It won’t, he says, because carbon dioxide stays in the atmosphere for centuries — even millenniums — and contributes to two factors that raise sea levels: higher temperatures and the loss of Greenland and Antarctic ice sheets.

His dire projections suggest that the billions of dollars in damages from last year’s Superstorm Sandy are a harbinger of the future. “The current trend in carbon emissions likely implies the eventual crippling or loss of most coastal cities in the world,” writes Strauss, who directs Climate Central’s program on rising sea levels. To calculate U.S. cities at risk, he looked at elevation data and 2010 Census population figures. He blended that with a finding, published last month in a PNAS paper led by Anders Levermannof the Potsdam Institute for Climate Impact Research, that each degree Fahrenheit of global warming translates to 4.2 feet of sea-level rise in the long run (as much as two millenniums.)

“This is probably the most unique and novel way I’ve seen of talking about a longer time frame,” says Peter Ruggiero, a coastal engineering scientist at Oregon State University. He says it’s “useful,” because most analyses look only at this century, and “the world doesn’t end in 2100.” Yet he says there are huge “uncertainties” projecting so far into the future, and the paper has “a bit of fuzziness” because its estimates on the number of people who could be affected assume no change in coastal population or land features. The estimates also do not account for potential engineering solutions.

Some climate scientists say the findings may be counterproductive. Looking at such a distant tomorrow “could scare people about something that might not happen for centuries,” says Jayantha Obeysekera of the South Florida Water Management District, a regional government agency. He says such long-term projections may not be helpful to U.S. planners who tend to focus on the next few decades.

Strauss’ analysis says 3.6 million Americans live in the 316 municipalities — including New Orleans, Atlantic City and Fort Lauderdale and Miami Beach — that are already considered at risk, because half of their populations live below the future high tide level that prior emissions have locked in.

Florida is the most vulnerable state by far, Strauss says, adding that Louisiana, New Jersey and North Carolina also face enormous difficulties. Unless major change occurs, he says, more than 100 cities in each of these states could be threatened.

Strauss says tragedy can be avoided or mitigated with deep global pollution cuts followed by technology that sucks CO2 from the atmosphere. Such bold steps, he says, could help preserve hundreds of coastal communities.

If current emissions continue, his analysis projects the year when global carbon emissions will lock hundreds of U.S. cities into the eventual sinking — below the high-tide line — of the land that now houses half their residents: Galveston, Texas (2030); Miami (2040); Norfolk, Va., (2044); Coral Gables, Fla. (2044); and Virginia Beach (2054).

 Source: Wendy Koch, USA Today, “Study: Sea-level rise threatens 1,400 U.S. cities,” July 29, 2013.

By Coalition for Green Capital

CGC would like to congratulate Richard Kauffman – the Chairman of Energy and Finance for New York and a close friend of the Coalition – who testified in front of the Senate Energy and Natural Resources Committee last Thursday in favor of green banks and other important mechanisms for clean energy finance. He said: “State green banks can help solve clean energy financing gaps. After all, it makes sense for states to play a role in clean energy finance: projects are local, building codes are local, and a substantial part of utility regulation is also done at the state level. However, while states can address some of the financing gaps, they cannot address them all: we need federal leadership.” The Committee leadership was very receptive to his points and we hope to see them manifested in new federal legislation clean energy deployment in the near future. Way to go, Richard!

Watch the full webcast of the hearing or download the testimonies here.

By Coalition for Green Capital

CEFIA continues to receive press covering the announcement of the brand new Solar Lease II.

A recent article published by Breaking Energy praises CEFIA’s decision to partner with a group of private banks to invest around $60M in aggregate in solar PV and solar thermal hot water systems at residences and businesses. The article calls attention to several aspects of the program that differentiate it from traditional solar finance options. Specifically, CEFIA’s program lowers costs to taxpayers and customers, fosters competition among installers, and offers homeowners a worry-free solution for solar by including a one-of-a-kind insurance package provided by Assurant.

CGC is proud to have supported CEFIA from the start and expects a sunny future for the green bank.

Read the full article here. 

By Coalition for Green Capital

Connecticut’s Clean Energy Finance and Investment Authority (CEFIA) closed on a $60 million deal on Friday that will finance leases for over 2,000 rooftop solar systems for residential and commercial customers. CEFIA contributed $9.5 million to the deal, which attracted more than $50 million from private banks including US Bancorp, First Niagara Financial Group, and a number of local and regional firms.

Like any traditional residential rooftop solar PV lease model, CEFIA’s Solar Lease II enables the green bank to act as an aggregator, pooling many smaller leases in order to take advantage of federal incentives such as the investor tax credit and accelerated depreciation. In this case, US Bank will provide upfront capital as tax equity and receive the 30% ITC as part of its payment. CEFIA also provides a credit enhancement by using public funds as a loan loss reserve for senior debt providers. CEFIA’s Solar Lease II is an excellent example of how a green bank can leverage scarce public resources to attract the maximum amount of private capital into the renewable energy industry.

Another unique aspect of the program is the insurance package offered under the Assurant Warranty Management and Insurance Plan. The insurance deal bundles property, casualty, and liability insurance. Unlike many insurance plans and warranties, the insurance package incorporated into the Solar Lease II will extend for the entire 20-year lease period.  

By offering a financing alternative to solar leases from industry leaders such as SolarCity and SunPower, the deal is expected to boost competition and reduce the cost of solar systems. The green bank has approved about 40 smaller companies to use the financing that the state has made available. CEFIA hopes that the increased competition will ultimately drive down costs and make solar more accessible to a wider range of homeowners and businesses.

CGC is proud of CEFIA’s hard work and looks forward to seeing the results of this great new Solar PV Program!

  Want to learn more? Check out these articles: CEFIA – Press ReleaseBloomberg – “US Bancorp, Niagara Providing Funds for Connecticut Solar”The Courant – “CT Green Bank Closes On $60M Solar Lease Financing”