The Clean Energy Future Blog

By Coalition for Green Capital

Follows recommendation by National Academies of Science 

WASHINGTON—A bill to create a national green bank has gained bipartisan support in the U.S. House of Representatives. Last week, Rep. Brian Fitzpatrick (R-Pa.) became the first Republican to cosponsor H.R. 806 introduced by Rep. Debbie Dingell.

Sponsors of the Senate bill include Sen. Chris Van Hollen (D-Md.), Sen. Ed Markey (D-Mass.), Sen. Richard Blumenthal (D-Conn.), Sen. Brian Schatz (D-Hawaii) and Sen. Martin Heinrich (D-N.M.). 

About the bill
Under the bill, $100 billion would be used as seed capital to drive nearly $500 billion in investment to build clean energy infrastructure and put more than 4 million people to work in four years. Forty percent of the funds must go to communities disproportionately affected by environmental pollution, climate change impacts or economically reliant on a fossil fuel-based industry. 

A network of a dozen state and local green banks have identified more than $21 billion in projects ready to go if funding was available. 

Supporters
Earlier this month, the National Academies of Science recommended that Congress fund an institution based on the green bank model. In its report, it wrote, “Private sources of capital are unlikely to be sufficient to finance the low-carbon economic transition, especially during the 2020s when the effort is new. To ensure industrial competitiveness and quality of life, the United States should establish a Green Bank to mobilize finance for low-carbon infrastructure and business in America.

In January, two independent reports by the Analysis Group and The Brattle Group found that a national Clean Energy Accelerator would have an outsized impact helping the United States recover from the economic effects of the COVID-19 pandemic and also speed up the country’s deep decarbonization and Environmental, Social and Corporate Governance (ESG) efforts.

President-elect Joe Biden included the Accelerator in his climate plan and Vice-President Elect Kamala Harris co-sponsored the Senate effort. In 2020, nearly 100 organizations sent a letter to Congressional leaders supporting the effort. 

Need for action
With 16 million Americans still receiving unemployment benefits due to the COVID-19 pandemic and studies showing that up to 42 percent of those jobs will not return, Congress must urgently make long term investments that create jobs and build a cleaner future.

Learn more about the effort at https://coalitionforgreencapital.com/accelerator/  

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By Coalition for Green Capital

FOR IMMEDIATE RELEASE
Feb. 3, 2021
press@coalitionforgreencapital.com

Would create 4M good-paying jobs, $21B in projects ready to go

Passed by House twice in 2020; included in Biden Climate Plan 

WASHINGTON—As Sen. Chris Van Hollen (D-Md.), Sen. Ed Markey (D-Mass.), Sen. Richard Blumenthal (D-Conn.), Sen. Brian Schatz (D-Hawaii), and Congresswoman Debbie Dingell (D-Mich.) reintroduced the Clean Energy and Sustainability Accelerator Act with $100 billion of funding, the Coalition for Green Capital (CGC) today urged Congress to pass the legislation as part of its COVID-19 relief and recovery efforts. Independent economic analyses have found that the Accelerator would create approximately 4 million jobs in four years and speed up the country’s decarbonization efforts. 

“During the last decade, the green bank model has proven to have an outsized impact in states, creating good-paying jobs and decarbonizing the economy. Now we need to replicate this model at the federal level to meet the urgent economic and climate challenges before our country,” CGC CEO Reed Hundt said. “With continued support from Sen. Van Hollen and Sen. Markey in the Senate and leadership from Rep. Dingell in the House, the bill passed the House twice last year. We are confident with their continued leadership we will get it passed by both chambers and signed by the president in 2021.”

“The Clean Energy and Sustainability Accelerator will be a critical catalyst for creating good jobs and increasing our health, wealth, safety and competitiveness. With a mandate to focus on underserved communities of color and the just transition for fossil fuel communities and workers, it’s a tool for moving small towns, suburbs and cities forward together,” said Doug Sims, Director of NRDC’s Green Finance Center.

“Clean energy is our future and I’m proud to see continued leadership from Michigan’s Rep. Dingell to make it a priority,” said Mary Templeton, president and CEO of Michigan Saves, the nation’s first nonprofit green bank. “Our organization works hard to make sure everyone—no exceptions— has access to the benefits of energy efficient improvements so I’m very pleased to see considerable focus on underserved communities facing climate impacts.”

The nonprofit Clean Energy and Sustainability Accelerator would use the proven green bank model to fund clean energy and climate-related projects. A $100 billion capitalization from Congress will drive nearly $500B of total investment with private co-investment and create nearly 4 million jobs in 4 years. Forty percent of the funds must go to communities disproportionately affected by environmental pollution, climate change impacts or economically reliant on a fossil fuel-based industry. 

Authorized projects include renewable power, building efficiency, grid infrastructure like transmission, industrial decarbonization, clean transportation, reforestation and climate-resilient infrastructure. Because the dollars are repaid over time, they can be recycled to make additional investments in the future. 

Yesterday, the National Academies of Science recommended that Congress fund an institution based on the green bank model. In its report, it wrote, “Private sources of capital are unlikely to be sufficient to finance the low-carbon economic transition, especially during the 2020s when the effort is new. To ensure industrial competitiveness and quality of life, the United States should establish a green bank to mobilize finance for low-carbon infrastructure and business in America.”

In January, two independent reports by the Analysis Group and The Brattle Group found that a national Clean Energy Accelerator would have an outsized impact helping the United States recover from the economic effects of the COVID-19 pandemic and also speed up the country’s deep decarbonization and Environmental, Social and Corporate Governance (ESG) efforts.

Last year, the U.S. House of Representatives twice passed funding for an Accelerator that would help achieve the decarbonization and ESG goals discussed above while also helping to create and fund state and local green banks like the one outlined in today’s reports. President-elect Joe Biden included the Accelerator in his climate plan and Vice-President Elect Kamala Harris backed the Senate effort. In 2020, nearly 100 organizations sent a letter to Congressional leaders backing the effort. 

Green banks currently exist in over 14 cities and states across the country and have supported over $5 billion in investment in clean energy projects in their states and local communities, and much of this investment has been targeted toward low- and moderate-income households and communities. View a list of projects that have been supported by already existing state and local green banks.

With 16 million Americans still receiving unemployment benefits due to the COVID-19 pandemic and studies showing that up to 42 percent of those jobs will not return, Congress must urgently make long term investments that create jobs and build a cleaner future.

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By Coalition for Green Capital

New report notes that private capital alone isn’t sufficient to meet goals

Necessary for deployment of current clean energy technology 

Key Points: 

• Private sources of capital are unlikely to be sufficient to finance the low-carbon economic transition, especially during the 2020s when the effort is new.
• To ensure industrial competitiveness and quality of life, the United States should establish a Green Bank to mobilize finance for low-carbon infrastructure and business in America.
• In order to ensure that capital is available for this transition, the committee calls for the establishment of a Green Bank to mobilize finance with at least $60 billion ($30 billion initially with an additional $3 billion per year through 2030].
• U.S. companies have to compete globally with German, British, Indian, and Chinese firms, among others, all supported by government-backed financial institutions that have a specific public policy mandate. The German KfW, UK Green Investment Bank, China Development Bank, and Industrial Development Bank of India are a few examples.
• The United States currently has no domestic independent development, investment, or Green Bank at the federal level, but it has periodically used them in the past.
• At least nine states have established Green Banks or funds, ranging from the Connecticut Green Bank to the Colorado Clean Energy Fund. There are also a number of local funds that serve specific communities, such as the Solar and Energy Loan Fund (SELF) in Florida. These investments also mobilize private sector investment into a project by reportedly three to six times the amount of public sector dollars at work (NREL, 2017).
• The committee recommends that a federal Green Bank be established with a specific public mission to finance low- or zero-carbon technology, business creation, and infrastructure. The rationale for an independent Green Bank as opposed to an entity like a Clean Energy Deployment Administration is to allow it to operate more nimbly than would be the case if the Green Bank was a federal entity. 

Full recommendation below or read the full report online:

Although the transition might be achieved while spending only a fraction of GDP that the nation currently allocates to its energy system, the transition will be much more capital intensive than businessas-usual (Chapter 2). Private sources are unlikely to provide the needed capital, especially during the 2020s when the effort is new. To ensure industrial competitiveness and quality of life, the United States should establish a Green Bank to mobilize finance for low-carbon infrastructure and business in America.

Partial financing by a Green Bank would reduce risk for private investors and encourage rapid expansion of private source capital. Such a bank would underpin the broad economic and social transitions required to achieve net-zero emissions by midcentury. The new bank should lend, provide loan guarantees, make equity investments, cooperate with community banks to increase the availability of finance at the local level, and leverage private finance consistent with a national strategy to compete internationally in lowcarbon industries and transform the U.S. economy.

It should make particular effort be a source of credit for innovative small and medium-size enterprises that may be locked out of commercial markets owing to their size. The Green Bank can be a lead investor on big decarbonization projects that serve the public good, de-risking and leveraging larger commercial investors. It should address inequities in the financing system, working with local banks, co-ops, and rural and other marginalized communities. It can also play a countercyclical role by scaling up lending operations when private banks contract (Luna-Martinez and Vicente, 2012), which is essential to sustained and uninterrupted access to finance during the low-carbon transition.

U.S. companies have to compete globally with German, British, Indian, and Chinese firms, among others, all supported by government-backed financial institutions that have a specific public policy mandate. The German KfW, UK Green Investment Bank, China Development Bank, and Industrial Development Bank of India are a few examples. The German KfW is one of the largest development banks in the world, with assets exceeding €500 billion. It was initially the sole lender in Germany to solar companies, prior to financing from private banks. 

The China Development Bank holds assets exceeding $1 trillion and likewise has invested heavily in renewable energy and low-carbon infrastructure (GriffithJones et al., 2018). The UK established the world’s first green investment bank in 2012, which financed more than £12 billion of UK green infrastructure projects between 2012 and 2017. This bank backed the construction of the Rampion offshore wind farm and invested in four other offshore wind farms. In 2017, the UK government privatized the bank in order to access additional capital and pay off public debt. It was acquired by an Australian firm, Macquarie, and it now operates as the Green Investment Group. All of the taxpayer money was returned with a gain of £186 million, but the UK government announced in 2020 that it would create a new state-backed Green Bank in the UK.

The United States currently has no domestic independent development, investment, or Green Bank at the federal level, but it has periodically used them in the past. The War Finance Corporation was established during World War I to mobilize finance for the war effort, and in 1932, President Hoover created the Reconstruction Finance Corporation, which later became the capital bank for the New Deal (Omarova, 2020). 

However, federal agencies including DOE and USDA do have substantial programs to invest in domestic development through loans and loan guarantees, research grants, and loan and grant assistance. At the USDA for example, the Rural Energy for America Program administered by the Rural Business and Cooperative Service offers loans and grants to rural businesses and agriculture producers to adopt renewable and energy efficiency measures in their farm operations. 

At the subnational level, at least nine states have established Green Banks or funds, ranging from the Connecticut Green Bank to the Colorado Clean Energy Fund. There are also a number of local funds that serve specific communities, such as the Solar and Energy Loan Fund (SELF) in Florida. These investments also mobilize private sector investment into a project by reportedly three to six times the amount of public sector dollars at work (NREL, 2017). Legislation has been introduced into Congress for a National Climate Bank with an initial capitalization of $10 billion and an additional $5 billion per year for 5 years to reach $35 billion. The Coalition for Green Capital (2019) suggests this could mobilize up to $1 trillion dollars in investment. While an initial multi-billion-dollar capitalization for the Green Bank would be a significant investment of federal resources, it should be financially self-sustaining and assets should grow over time. There is no magic number for initial capitalization, but to enable the green recovery that is needed in the United States, it needs to be large enough to be adequate to the task and to compete with its counterparts.

The China Development Bank’s current assets equal $1 trillion, Germany’s KfW’s are $575 billion, and Brazil’s National Development Bank is worth $145 billion. A recent proposal for an American Development Bank called for an initial capitalization of $100 billion (Griffith-Jones, 2020). The recent establishment of the U.S. Development Finance Corporation came with authorization of $60 billion, so an initial capitalization of $30 billion in a U.S. Green Bank, rising to $60 billion, may be politically realistic. Equal authorizations would establish that the government cares just as much about domestic investments in green economic development as it does in overseas investments. The committee recommends that a federal Green Bank be established with a specific public mission to finance low- or zero-carbon technology, business creation, and infrastructure. The rationale for an independent Green Bank as opposed to an entity like a Clean Energy Deployment Administration is to allow it to operate more nimbly than would be the case if the Green Bank was a federal entity. 

An independent Green Bank formed by the federal government and capitalized with federal funds could forgive loans, something that most governmental entities cannot do. Its remit could be broader, encompassing the financing of other green industries and sectors (e.g., climate adaptation and resilience, fresh water supply), but it must at least devote at least two-thirds of its financing for the energy transition to achieve net-zero emissions by midcentury. Its objectives within the energy transition space would include fostering long-term domestic manufacturing capacity in clean energy and energy efficiency.

The committee recommends:

• Establishment of a federal Green Bank with a specific public mission to finance low- or zerocarbon buildings and technologies, business creation, and infrastructure.
• Congress should provide an initial capitalization of a minimum of $30 billion, followed by an additional $3 billion per year through 2030, resulting in a minimum capitalization of $60 billion by 2030. Cost: $60 billion.
• The bank must adopt good governance procedures and practices, including being transparent and abiding by environment and social safeguards and incorporating labor standards (and Buy American) requirements. 
• The staff of the bank must be trained not only in finance but also in engineering, science, technology, and policy so that the bank can make well-informed investment decisions.
• The bank must devote at least two-thirds of its financing to the social, economic, and infrastructural energy transition to achieve net-zero emissions by midcentury.
• The bank must report annually to Congress on its investments and their impacts, including total financing, firms supported, infrastructure created, jobs created, value added, and reduced or avoided GHG emissions.

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By Jeffrey Schub

Yesterday, President Biden issued a series of executive orders (EOs) to put the U.S. on the path to tackling the urgent climate and economic crises. He rightly outlined how tackling climate would create good-paying union jobs that provide more pathways to the middle class. 

But he realizes that there are challenges to this transition. First, we cannot forget about communities where fossil fuel plants served as an economic foundation for many families and the tax base for municipalities. Second, we must use the transition to correct the injustices that many minorities and poor families suffered due to the pollution from those plants. 

His EOs provide the framework for our country’s leaders, philanthropic community and private sector to build on. He created:

• the Domestic Climate Policy Office (CGC’s Jahi Wise is now a member),
• a new National Climate Change Task Force,
• a Civilian Climate Corps,
• the Justice40 Initiative,
• a new Interagency Working Group on Coal,
• Power Plant Communities and Economic Revitalization, and 
• a new White House Environmental Justice Interagency Council.

This creates the government infrastructure needed to make climate-focused decisions, prioritize needy populations, and enforce laws and administration priorities.

But for him to realize these goals and literally build a cleaner, better and more just future the missing ingredient is money. This powerful new climate-oriented government architecture needs trillions of dollars to put to work.

The president knows this. In his campaign climate plan, he included an “innovative financing mechanisms that leverage private sector dollars to maximize investment in the clean energy revolution.”

That’s where the Clean Energy Accelerator comes in.

Based on the proven green bank model that has been tested and put to work in more than a dozen states, Biden can combine public dollars with private dollars at a 1:3 ratio and cover nearly a quarter of the capital needed in his $2T climate plan.

The Accelerator will take the orders from framework to implementation. The Accelerator will be required to invest 40% of its capital in disadvantaged communities, exactly in line with the President’s target. This will reduce pollution, lower energy costs and create new jobs and businesses for those communities who are otherwise left out of the economic gains from the clean energy transition. (Our white paper provides a full analysis of how the Accelerator can help achieve environmental justice.) And the Accelerator will also be directed to invest in communities impacted by the climate transition to create new, good-paying jobs to replace those lost. 

And it can help those who want and deserve to stay in their communities. As Biden’s national climate adviser Gina McCarthy said, “We’re not going to ask people to go from the middle of Ohio or Pennsylvania to ship out to the coast to have solar jobs.” The Accelerator is specifically empowered to make targeted investments, either directly or through a new network of state or local green banks. Money will flow where and how it is needed to meet the specific needs of each state and community. 

In Michigan, the state’s green bank has launched a new program to help low-income seniors in Ann Arbor.

“The program will go toward making physical improvements in low-income senior homes and to supporting social workers with providing the supporting services necessary to help seniors stay in their homes longer.” 

Making those improvements for low-to-moderate income families requires skills of all types. In fact, as this report shows, roughly half of the jobs created will be in non-technical roles.

While the private sector has stepped up its investment in green technologies, it’s nowhere near the level and speed that is needed. As we told the Washington Post this week, ““It’s not that private banks have never heard of solar or electric vehicles … It’s just that the speed of that private investment is far too slow.”

As the Administration and Congress look for economic recovery measures, creating a Clean Energy Accelerator like the one the House passed twice last year and that Vice President Kamala Harris sponsored when she was a senator can make the goals of the President’s executive orders achievable. 

By Coalition for Green Capital

“It’s not that private banks have never heard of solar or electric vehicles,” said Jeffrey Schub, executive director of the Coalition for Green Capital. “It’s just that the speed of that private investment is far too slow.”

By Steven Mufson

From a dorm room at Stanford University, two business school students designed a system of solar panels for the roof of a boarding school in Nairobi. It worked. The school saved money and replaced the diesel generator it had relied on when the power went off.

But students Christopher Hopper and Samuel Adeyemo realized they needed to speed up design, shade analysis and permitting. They needed software. They needed computers. And they needed to lean on technology to make the business a success. The year was 2012, and they were in the right place.

“We put our headphones on, and we’d code all day,” Hopper said.

In 2013, the pair launched Aurora Solar, a software firm that speeds up design, permitting and installation for rooftop solar arrays. Today, a climate business that began in the dorms at Palo Alto has designed panels for more than 4 million solar projects, its revenue has soared tenfold to about $50 million, and it boasts 100 employees and expects to double that.

The secret to their success? Climate financiers.

For years, big renewable energy projects have found it relatively easy to raise money. Many investors have been attracted to the glitz of Tesla, the steel turbines in windmills or the fields of photovoltaic panels.

But now, as the cost of renewable energy plummets and awareness of the magnitude of climate change grows, market forces are luring investors into all sorts of “green” finance, nearly doubling the size of green bonds and green equity funds. These investors are looking up and down supply chains and searching not only for established companies, but also for innovative ones at early stages of development.

Energize Ventures, a climate change oriented venture capital firm, had been tracking Aurora Solar’s progress and pumped in two rounds of funding to fuel its rapid expansion — the first for $20 million and, in November, another for $50 million. The money came from Energize Ventures, whose investors include mainstream companies such as General Electric, Caterpillar and a big Canadian pension fund with a renewable energy mandate.

“Every single asset manager is looking to get away from carbon projects,” said John Tough, managing partner of Energize Ventures. His firm, by contrast, has invested in software that detects anomalies or breaks in the system so utilities don’t have to comb through 2 million drone photographs of turbines or solar panels to identify a problem. And with more than 500 drone pilots working for each of three large American utilities, Energize Ventures also has invested in software for drones, Tough said.

The surge in climate financing comes at a key moment, with President Biden promising to commit $2 trillion of climate-related spending over the next four years. As difficult as it will be to secure those staggering sums, Biden’s plan still will provide only a small part of the investment needed to slow climate change.

The International Energy Agency estimates that global investment in low-carbon energy will have to increase 2½ times by 2030 from its current level of about $620 billion a year to meet targets in the Paris climate agreement.

Private capital is essential to meet those targets, and the money has started to flow.

Despite the economic woes brought on by the pandemic, financial firms issued a record $357.5 billion of green and sustainable bonds in the first nine months of 2020, up 96 percent from the same period in 2019, according to Refinitiv, a consulting firm. The proceeds from the sale of the bonds are earmarked for projects related to climate change.

“Because capital markets pull future risk forward, we will see changes in capital allocation more quickly than we see changes to the climate itself,” BlackRock chief executive Larry Fink predicted Tuesday in his annual open letter. Fink said that while he expected the covid-19 crisis to “divert attention from climate,” in fact, “just the opposite took place, and the reallocation of capital accelerated even faster than I anticipated.”

From January through November 2020, investors in mutual funds and exchange traded funds invested $8 billion globally in sustainable assets, a 96 percent increase over the sum for all of 2019, Fink said. “We know that climate risk is investment risk. But we also believe the climate transition presents a historic investment opportunity.”

Big banks are scrambling to get in on it. HSBC maintains the top spot in underwriting green bonds, at 6.3 percent in the first nine months of 2020.

Goldman Sachs a year ago said it would devote $750 billion to clean-energy financing over the next decade, having already invested or financed $115 billion since 2006. And Henry Paulson, a former Goldman chief executive and U.S. treasury secretary, will become executive chairman of a new multibillion-dollar investment fund at the investment firm TPG devoted exclusively to combating climate change.

Many people are urging Biden to ask Congress for money to start green banks that could unlock even more private capital. (Supporters often call these institutions “accelerators” to make them more appealing to lawmakers.)

“It’s not that private banks have never heard of solar or electric vehicles,” said Jeffrey Schub, executive director of the Coalition for Green Capital. “It’s just that the speed of that private investment is far too slow.”

Another force in the financial world: the pension funds and money managers who want to woo individual customers who are alert to the threat of climate change. On Jan. 24, two of New York City’s big pension funds said they would divest themselves of $4 billion of fossil fuel stocks.

“No issue ranks higher than climate change on our clients’ lists of priorities,” said Fink, whose firm has more than $7 trillion under management. “They ask us about it nearly every day.”

He said that “not long ago, building a climate-aware portfolio was a painstaking process, available only to the largest investors. But the creation of sustainable index investments has enabled a massive acceleration of capital towards companies better prepared to address climate risk.”

“What’s even more encouraging is that the drivers [of the surge in climate finance] are the real economy,” not just investors, said Daniel Klier, the global head of sustainable finance at HSBC.

That means not only small start-ups like Aurora Solar, but also large companies like the cement and concrete maker LafargeHolcim, which in November floated an 850 million euro bond (just over $1 trillion) linked to cutting about half of its carbon dioxide emissions by 2030. If LafargeHolcim fails, the bondholders get higher interest payments in 2031. The concrete industry is one of the most greenhouse gas intensive in the world.

And Etihad Airways, a flagship airline of the United Arab Emirates, last October sold a $600 million five-year Islamic bond — which does not offer conventional interest in keeping with Islamic law — to help decarbonize its fleet and purchase carbon offsets. The loan carries penalties if the airline fails to meet its targets.

Big institutional investors also are jumping in.

In March, Prudential Financial became the first insurer to raise money with a green bond offering. It launched a $500 million bond issue devoted to investments that provide environmental benefits, including reduced greenhouse gas emissions and improved resource efficiency.

The realm of climate finance does have its own controversies. PepsiCo, for example, issued a $1 billion green bond, much of which went to buying recycled plastic. Many investors said that PepsiCo would have had to buy that recycled plastic anyway and that Pepsi was engaged in greenwashing. The bond offering was excluded from some green bond indexes.

The company, in a green bond annual report, countered that “by displacing virgin plastic with recycled plastic, PepsiCo can help to reduce plastic waste while lowering our dependency on non-renewable fossil resources and boosting the carbon and resource efficiency of our packaging.” It said it was lowering greenhouse gas emissions and saving energy.

Many investors also have steered away from financing green buildings at airports, asserting that they only lure passengers to planes that spew greenhouse gases.

Some of the biggest green financing still goes toward helping to construct traditional renewable energy, which is desperately needed. Renewables, including hydropower, provide just 17 percent of the energy used by the U.S. electricity grid and nuclear an additional 20 percent. The nation needs more if it is to eliminate the grid’s reliance on oil, coal and natural gas, which provide 62 percent of its energy.

In April, as coronavirus cases started spreading across the country, a company called Invenergy put the finishing touches on its 100th sustainable energy project, a field of solar panels just outside the town of Camilla in southwest Georgia. Local per capita income is less than half the national average, so the investment and the new tax revenue were welcome there. Under a 30-year contract, Invenergy will sell all of the energy to the state utility, Georgia Power.

A handful of the big oil and natural gas companies, such as BP and Total, whose capital investment budgets dwarf those of most companies, are increasing their investments in solar and wind. Enel, a major Italian pipeline company, has an American green power arm that has invested in 67 renewable projects in 18 states with 5.7 gigawatts of installed energy capacity. Enel Green Power has been combining those with small, dispersed battery storage in case of emergency, said Giovanni Bertolino, the head of e-mobility at Enel X North America. One of its largest battery storage installations serves the Marcus Garvey Apartments in the Brownsville neighborhood of Brooklyn.

Some investors are so eager to back climate-related projects that they will invest in public companies that resemble empty shells; they do not have any businesses to start with but are looking for ventures to buy. The investments are the equivalent of blank checks written to experienced energy executives who will try to find and jump-start promising energy firms.

David Crane, a former chief executive of the utility NRG, is leading Climate Real Impact Solutions (CRIS), which has raised about $400 million. Unlike most private-equity firms, which tend to invest in anywhere from 10 to 30 firms, each public company run by people like Crane will choose just one promising enterprise.

“It’s a mechanism that allows rising companies access to attractive capital earlier,” Crane said in October.

But it’s a riskier business. Crane said he was assessing companies on the basis of earnings projections for 2027. Some companies cannot even deliver their products at a meaningful scale until 2023, and some do not have any revenue yet, he said.

On Jan. 22, CRIS made its first move, buying a share of a high-speed electric charging company, EVgo. At any EVgo location, motorists should be able to recharge up to 80 percent of their batteries in just half an hour, enough for shoppers or people pausing at highway rest stops. CRIS provided $230 million, and after adding other financing, EVgo received $575 million in cash to expand from its current 1,600 chargers at 800 locations.

EVgo also has had talks with big automobile companies, which want a bigger electric recharging infrastructure before agreeing to Biden’s urgings to produce and sell more electric vehicles.

“What we’re seeing is that the market has the appetite to accelerate the clean-energy revolution,” said Cathy Zoi, the chief executive of EVgo. A Clinton White House and Obama Energy Department official who has spent years in the private sector, Zoi said, “The imperative is to go faster.”

By Coalition for Green Capital

By John Downey

Plans for a nonprofit green bank in North Carolina are accelerating as Democrats take control of the White House and Congress, improving chances for federal investment in clean energy programs that could help fund it.

Jennifer Weiss, chairman of the recently incorporated North Carolina Clean Energy Fund, and her three fellow directors will meet next week for the first time since the U.S. Senate runoff election in Georgia on Jan. 5 flipped that chamber to the Democratic Party.

The directors have applied for 501(c)(3) status as a not-for-profit for the organization as they work on funding for what is hoped to be $100 million to $150 million in capitalization to underwrite or help establish small clean energy and energy efficiency programs that ordinarily fail to attract support of traditional financial organizations.

They are also looking for initial funding to pay for a director and staff for the nascent energy fund. Weiss says they are looking to possible foundation funding for a year to get the green bank off the ground.

“Once it is operating — making loans and collecting payments — we expect it to be self-sustaining,” she says.

Jennifer Weiss, a senior policy associate at the Nicholas Institute for Environmental Policy, is board chairman for the North Carolina Green Energy Fund.Enlarge

Jennifer Weiss, a senior policy associate at the Nicholas Institute for Environmental Policy, is board chairman for the North Carolina Green Energy Fund.

DUKE UNIVERSITY

The group is beginning to build a pipeline of potential projects it could support in the state, Weiss says. That could direct financing of clean energy initiatives in some cases. In others, the fund could provide loan loss reserves for banks and other traditional lenders to encourage them to offer financing for residential solar, high-efficiency heating and cooling equipment, insulation or other home energy upgrades. That is a tactic used in a number of the 15 green banks already operating around the nation.

By March, she says, the fund hopes to have clearer plans for the size and scope. It hopes to be operating within a year.

Weiss, a senior policy associate at Duke University’s Nichols Institute for the Environment, co-authored a report by the institute and the Washington-based Coalition for Green Capital in October, calling for the clean energy fund. Shortly after, Weiss and one of her coauthors — the program director for the coalition, Hannah Beinecke — filed incorporation papers for the fund.

But all involved acknowledged that the size — and possibly the success — of the proposed fund relied to a large extent on the outcome of the 2020 elections. Then-presidential candidate Joe Biden was calling for a $20 billion National Climate Bank to seed state green banks and promote private investment in them as part of his multitrillion-dollar infrastructure and growth plan.

Jeffrey Schub, executive director of the CGC, says the outlook for the climate bank — also called a “clean energy and sustainability accelerator” — appears bright as President Biden takes the reins of government. With the victories in Georgia, Democratic Sen. Chuck Schumer becomes the majority leader in a 50-50 Senate with Vice President Kamala Harris providing the tie-breaking vote.

Schub says it is not clear that all 50 Democrats in the Senate will support the climate bank and the broader infrastructure spending that Biden will propose. But he noted with satisfaction that, this week, West Virginia’s Sen. Joe Manchin, probably the most conservative red-state Democrat, talked of an infrastructure bill that could be in the range of $2 trillion to $4 trillion.

That is in addition to the $1.9 trillion emergency economic package that Biden is promoting. And it could indicate strong support for the broader infrastructure effort.

More important, Schub says, is the likelihood that some Republicans will back the climate bank measure, making it bipartisan and perhaps giving Schumer some breathing room in his own caucus.

The coalition is in the process of meeting with a number of number of Republican senators who have supported clean energy initiatives in the past. Schub says North Carolina’s Sens. Richard Burr and Thom Tillis are high on the coalition’s list.

Both have been consistent supporters of solar and other renewable energy efforts in North Carolina. Schub noted a December speech by Tillis in which the senator praised “leaders who refuse to believe climate-smart policies that support clean energy workers had to be a partisan issue.” Further, Tillis said, “to rebuild our post-pandemic economy, we can grow clean energy jobs, promote American innovation, and continue to lead on driving down our carbon emissions.”

Schub says it may be difficult to assemble the 60-vote majority needed for most matters to advance over an attempted filibuster. But he says the climate bank provisions in the infrastructure plan involve the kind of revenue and spending programs that can be decided under budget reconciliation rules. That would mean that a 51-vote majority would be sufficient to pass it, whether it came from a solid Democratic caucus plus Harris or strong Democratic support with help from willing Republicans.

He says North Carolina moved in advance of the Democratic victories, and so it is a leader among states that do not yet have green banks. Other states have more recently begun to move in the same direction — including Maine, which could help win support, for instance, from Sen. Susan Collins. South Carolina’s state energy office also has now recommended a green bank, making another two potential targets.

“The more states involved, the more opportunities we have to try to persuade senators to get on board,” Schub says.

In North Carolina, Weiss says, the energy fund would support Gov. Roy Cooper’s carbon reduction goals now being fleshed out as policy by the Department of Environmental Quality.

The energy fund board of directors had its first organizational meeting Dec. 16. Along with Weiss, directors are: Ajulo Othow, founder and CEO of EnerWealth Solutions; Melissa Malkin-Weber, sustainability director for the Self-Help Credit Union; and Tyler Norris, director of development for Cypress Creek Renewables.

“We are still in our infant stage,” she says of the fund. “But within the next six months, we will have a good idea on our first projects and what the money involved will be.”