MONEY AND BIG SUN

Are institutional investors getting behind renewables?
Andrew Williams, 9 September 2010 (CSP Today)

"Mindy Lubber, President of Boston-based sustainable investor organisation Ceres, recently predicted that the vast majority of future funding for alternative energy companies will come from large institutional investors, pension and hedge funds and private equity firms, rather than from governmental support…There is now growing evidence of increased investment in clean energy in general, especially from socially responsible investors (SRI’s)… However, many institutional investors do not yet distinguish between the various types of solar power…

"A number of government programmes, particularly in the U.S., are boosting the investment appeal of [concentrating solar power (CSP)]...Renewable Portfolio Standards (RPS) and regional or state carbon-caps boost demand for all types of renewable energy, including CSP. California has been a major player in the CSP industry, thanks to [ambitious policies and plentiful sun]…"

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"Two examples of…[federal policies boosting CSP] are the US$1.45 billion loan guarantee for the Abengoa CSP plant in Arizona, and the US$1.37 billion loan guarantee for a BrightSource CSP plant in California. [Lubber says that opening federal lands, a national transmission upgrade and a price on carbon are still needed]…

"A recent Ceres report, The 21st Century Utility: Positioning for a Low-Carbon Future, claims that, in California, CSP and other solar technologies are already at or near grid parity [at which CSP generated electricity is equal in cost, or cheaper than, grid power], with CSP in Arizona and Nevada also getting close…[G]rid parity predictions depend on exactly what types of power are being compared and in which countries. They also depend on whether or not externalities arising as a result of conventional power are included in the calculations. [CSP peak power is already competitive]…"

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"It is difficult to predict where the bulk of investment in CSP is likely to come from in coming years. This is at least partly because it very much depends on what direction energy policy will take in the future…[but evidence] suggests that many institutional investors are now attaching growing importance to clean energy investments.

"As we edge ever further along the road to ‘peak oil,’ and governments across the globe increasingly turn their attention to viable alternative sources of power, it seems likely that this trend will gather pace in the coming years."