• 5 minutes Mike Shellman's musings on "Cartoon of the Week"
  • 11 minutes Permian already crested the productivity bell curve - downward now to Tier 2 geological locations
  • 17 minutes WTI @ 67.50, charts show $62.50 next
  • 9 hours The Discount Airline Model Is Coming for Europe’s Railways
  • 16 hours Pakistan: "Heart" Of Terrorism and Global Threat
  • 2 hours Desperate Call or... Erdogan Says Turkey Will Boycott U.S. Electronics
  • 2 hours Venezuela set to raise gasoline prices to international levels.
  • 14 hours Saudi Fund Wants to Take Tesla Private?
  • 1 day Starvation, horror in Venezuela
  • 5 mins Renewable Energy Could "Effectively Be Free" by 2030
  • 1 day Batteries Could Be a Small Dotcom-Style Bubble
  • 1 day Newspaper Editorials Across U.S. Rebuke Trump For Attacks On Press
  • 1 hour Are Trump's steel tariffs working? Seems they are!
  • 24 hours WTI @ 69.33 headed for $70s - $80s end of August
  • 16 hours Scottish Battery ‘Breakthrough’ Could Charge Electric Cars In Seconds
  • 8 hours Corporations Are Buying More Renewables Than Ever
Alt Text

IEA: The World Needs More Diverse Cobalt Sources

The International Energy Agency reported…

Alt Text

The Technology To Transform The Utilities Sector

The utilities sector is undergoing…

Alt Text

Grid Batteries Will Hurt Wholesale Power Generators

Unregulated U.S. power wholesalers face…

Jen Alic

Jen Alic

 

More Info

Trending Discussions

Money: A New (Decentralized) Shade of Green

Money: A New (Decentralized) Shade of Green

As America’s clean energy industry takes up position in a no-man’s land between subsidies and sustainability, the idea of “Green Banks” is being touted as a life-line that will push the industry into maturity, but it’s an idea that will only work on a state level and by empowering states to make their own clean energy decisions.

Green Banks are essentially clean energy finance banks formed at the federal or state level that operate as public-private financing institutions with the power to raise capital to support clean energy projects through loans and loan guarantees. These banks can issue bonds and sell equity and they can often offer cheap loans.

In the US, it is the state level that would likely take the lead in forming Green Banks, and the state of Connecticut has already taken the plunge with the establishment of the Clean Energy Finance and Investment Authority (CEFIA). Launched last year, CEFIA merges several clean energy funds whose revenues come from a utility system benefit fund and the Regional Greenhouse Gas Initiative, among others, with a financing authority repurposed as a clean energy investment bank. Presently, CEFIA is talking with solar photovoltaic stakeholders to boost the bundle, and according to the Brookings Institute, is close to making its first loans. 

In Germany and the United Kingdom, the idea of the Green Bank has also taken hold, with a clean energy development bank already boasting success in Germany, while the UK’s is only just getting off the ground. The UK’s version, however, is experiencing some setbacks in and a recession and deficit that is not falling as planned, the UK Green Investment Bank is behind on gaining borrowing powers. 

The idea is being put forward by the Brookings Institute, which issued an in-depth report on Green Banks last week as part of the Brookings-Rockefeller Project on State and Metropolitan Innovation.   

But the idea is not entirely new. In fact, the Export-Import Bank of the United States (Ex-Im Bank) and the Overseas Private Investment Corporation are similar endeavors that have successfully raised capital for energy and infrastructure in the past. The difference this time around is that Green Banks would be the purview of state governments rather than the federal government.

State budgets are challenged financially, so Green State Banks would be a sound solution that would allow states to leverage public money with private sector funds and, importantly, private sector experience.  The overall effect will be to cut clean energy’s dependence on federal subsidies and tax credits, which in turn will make them more competitive and hopefully push development into full maturity, all the while allowing states to make their own decisions. It is also much easier for states to forge public-private relations than it is for the federal government.

There is no single model that could work across states, however, so it is up to each state to design their own form of green banking. There are at least three models of banks that states could choose from depending on their specific circumstances and needs. The Connecticut model is a semi-public corporation that merges funds the state already has for clean energy with private investment in the bank. They could also take an existing infrastructure bank and add on a Green Bank to its services, or transform a grant authority into a lending authority in partnership with the private sector.

More to the point: How will this affect the consumer? According to Bill Ritter, Director of the Center for the New Energy Economy (CNEE) at Colorado State University, consumer purchased energy resources “have never fit well without our existing utility model” because “utilities charge consumers for energy on a monthly basis, having financed their investments over time. Yet, when a consumer purchases efficiency or generation resources, traditionally they need to make a one-time, large up-front expenditure and then see their savings accrue over time through a reduction in their utility bill.”

Green Banks, he argues, would give consumers more and better options. Specifically, they would allow consumers to replace a portion of their monthly utility payment with a payment for energy efficiency or solar power and thus “protect themselves against rising utility bills and increase the value of their home or business while lowering their utility costs at the same time.”

The bottom line is that green banking is a good idea, as long as it remains the purview of state governments rather than the federal government. At a time when clean energy is under attack and only on the cusp of maturity, state green banks could be the first feasible plan out there, and it’s likely to be attractive to a host of governors. The idea will gain even more traction if Congress fails to extend the production tax credit (PTC) this year. Without green banking, the PTC is the only way the clean energy industry will survive. Green banking is a more viable alternative that extending the PTC.

By. Jen Alic of Oilprice.com




Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News