INVESTING IN RENEWABLES. THE FUTURE STARTS HERE (AND WITH PRIVATE INDIVIDUALS)
By Francesco CALABRETTA
Cluster Leader Italy and Hungary Audax Renewables
We know. If you want the Energy transition starts seriously it is essential that public resources and investments but especially those of private individuals believe in renewables and their expansion. And that we go to compose a regulatory framework as shared as possible at a global level that favors the financing of projects for the generation of clean energy.
The Glasgow Climate Conference reaffirmed the need to invest. In addition to the commitment of the States to respect the obligations undertaken to pay the climate funds in full (the famous 100 billion dollars per year, a figure never reached since it was established at COP15) it is interesting to observe what has happened with the private sector. Gathered under the name of Glasgow Financial Alliance for Net Zero (GFANZ), 450 global banks and financial services companies have declared their intention to make available 130 trillion dollars to kick-start the ecological transition and achieve the objectives established in the Paris agreement.
The economic commitment, spread over 30 years (until 2050) is divided as follows: 57 trillion dollars will come from assets, 63 trillion dollars from banks, while 10 from pension funds.
A fundamental decision because without the contribution of the private sector it is impossible to imagine a real change. We had already spoken a year ago, citing the case of BlackRock and its desire to include sustainability among the investment criteria. But the examples in this direction, since 2019 onwards, have fortunately multiplied. And the trend data confirm it: in the first six months of 2021, the record figure of 174 billion dollars of investment in clean energy was reached, or +1.8% over 12 months (Bloomberg). Not only that. At the end of this year, renewables will be the single most important investment item in the sector energy with 367 billion dollars, or 70% of the total invested in new electricity generation capacity (IEA, World Energy Investment).
If it is true that the economic resources currently employed are not sufficient to guarantee a full Transition and that they will have to at least triple between now and 2030 to be in line with the new Net-zero scenario 2050, it is equally true that the moment is – to a certain extent – propitious.
The entry into force of the Taxonomy or classification of sustainable activities will lead to a profound change not only within the European Union, but also in relation to the rest of the world. It will be able to direct investors' choices, positioning itself as a real demarcation line between those initiatives that will be able to obtain funding because they comply with “green” criteria and those that, instead, will be excluded because they do not. Also in this case, the strategy adopted focuses on the involvement of private capital.
In Italy, the expansion cycle that we all hope to experience is also fueled by the resources of the so-called PNRR and specific contributions to the development of renewable energy. 23.7 billion euros are, in fact, a considerable economic endowment that should not be wasted if we want to start the much talked about “green revolution”, with the 72% of electricity from RES by 2030.
However, the many resources here have to deal with long and cumbersome mechanisms. bureaucratic (it is no coincidence that in Italy there was a Ministry dedicated to simplification ...), often the real obstacles to a full deployment of renewable energy on the territory. The almost deserted auctions are unequivocal evidence of this since between May and June the 12% and 5% of the available MW offer were assigned respectively. With the 800 MW installed every year in our country we are really too far from the goal of 7,000 per year for the next 9 years.
The experience of the Audax Renovables Group of which Audax Renewables is part of it is, in this sense, significant. It is an international reality that began this journey many years ago, when few believed in it. It did so by focusing on innovative financial systems such as PPA or through the issuance of “green” bonds has promoted the spread of renewable energy. Today, the Group invests directly in wind and photovoltaic farms, managing a portfolio of operating generation projects of 91 MW in wind farms in Spain, France and Poland and 55 MWp photovoltaic in Spain. In addition, it has 66 MW of wind energy under construction in Panama and 21 MWp in photovoltaic projects, plus a total of 87 MW under construction, and has a photovoltaic portfolio of 2,291 MWp in various stages of development between Spain, Portugal and Italy. It should be noted that it has recently obtained authorization to enter into operation of photovoltaic plants with a total power of 20 MWp (La Zarzuela I, II, III and IV), located in the Spanish region of Castile-La Mancha.
In conclusion, we can say that streamlining bureaucratic procedures is essential if we want to progress. Equally, without economic resources it is difficult to change the situation. Today, European funding in the form of PNRR and the Green Taxonomy can give an important boost to investments. However, it remains private initiative the determining factor in making change concrete, as the history of our Group clearly shows.
