Financing renewables could be one click away

Where do things stand now, two years after the Paris Agreement was signed?

Despite the decision of the United States to withdraw from the Paris Agreement, many indicators are now set to green.

Political mobilisation is increasing. France, which is organising the One Planet Summit, wants to confirm its leadership on the climate and the environment. Europe too, which is discussing at the moment the adoption of ambitious renewable energy targets (increasing to 30% the share of renewable energies in end demand) and energy efficiency (a 30 to 40% increase in energy efficiency by 2030).

Other non-governmental actors are also spearheading the movement. The big cities, represented in coalitions such as C 40 or the Covenant of Mayors, are making strong commitments on reducing CO2 emissions, energy efficiency and supporting renewable energies.

Clean technologies are becoming mature. For example solar energy: In 2008, solar power was delivered at approximately €700 per megawatt-hour (MWh). In August 2016, Chile announced a new record low contract price to provide solar power for less than €30/MWh.

The capital is available. Many investors are looking to invest their funds in clean technologies. ENGIE alone has issued 5.2 billion euros of green bonds since 2014.

However, we are still a very long way from what is needed. At the current pace, temperatures will increase from between 3 and 3.5° C by the end of the century.

It is urgent to speed things up. To do so, we must remove all the barriers to a mass adoption of clean technologies.

In particular, we must make up for the shortcomings of the renewable energies market which is preventing supply and demand from meeting. It is a fact that investors are reluctant to invest in areas where the regulatory framework is uncertain and there are inadequate guarantees. Similarly, they are still showing little interest in small-size projects such as micro-grids, which however will be an important way of structuring the electrification of isolated areas in Africa and Asia. However, to keep to the objectives of the fight against global warming, will require 15 to 20 times more investments in renewable energies in these regions of the world.

It is to structure the market and to remove these barriers that we created the Terrawatt Initiative project in 2015 at the COP 21.

Terrawatt Initiative will soon set up a platform to link, within a framework agreed by the countries, all of the key stakeholders in order to satisfy public needs for renewable energies. This platform, which targets 20GW of installed solar capacity, will, in particular:

• aggregate the demand and make it viable by helping countries establish a common legal purchasing framework and a mutual guarantee mechanism (Common Risk Mitigation Mechanism) that leverages Official Development Assistance;
• improve the flow of information between all the market actors;
• structure attractive guaranteed investment products for private institutional investors by aggregating and securitising the financial flows from green assets on a large scale.

This platform can become the benchmark platform, the Amazon of all the infrastructure and assets of the green economy, and thereby allow mass investment in these technologies.

The awareness-raising phase is over and now is the time for action. It is precisely thanks to innovative approaches like the Terrawatt project, between public and private actors and NGOs that we will collectively be able to win the fight against global warming – the greatest challenge of the century and that of our generation.