Published on June 17th, 2015 | by Sandy Dechert14
$4 Billion Just Raised From Private Sector For Clean Energy
June 17th, 2015 by Sandy Dechert
It’s hard to keep a good man—in this case, recently bereaved Vice-President Joe Biden—down. Biden resumed official duties yesterday by hosting the Clean Energy Investment Summit at the White House. You may recall that to support the President’s Climate Action Plan, the White House launched a Clean Energy Investment Initiative in February to catalyze private-sector investment in climate change solutions, including innovative technologies with breakthrough potential to reduce carbon pollution. The summit was planned at that time. Said Biden:
“We’re announcing $4 billion in independent commitments by major foundations, institutional investors, and others to fund innovative solutions to help fight climate change, including technologies with breakthrough potential to reduce carbon pollution.”
Financing being an important component to success of the CAP, Biden’s announcement of the large sums already raised from hundreds of diverse organizations—for example, $500 million from the University of California, $500 million from Goldman Sachs, $350 million from the New Zealand Superannuation Fund, $200 million from the Alaska Permanent Fund, and $100 million from TIAA-CREF, as well as a large Sierra Club contribution—gives new impetus to urgent sustainability and climate change priorities.
It’s double the initial $2 billion goal set at the February launch, when the executive branch pointed out that “mission-driven investors–such as foundations, university endowments, and institutional investors–can play a catalytic role in accelerating the transition to a low-carbon economy.” In pursuit of both financial returns and a climate-oriented mission, the sponsors are launching several clean energy investment alliances to connect would-be investors and clean-energy firms. The new initiative will significantly reduce the transaction costs of investing in new and developing technologies, spread promising investment models, and increase their climate mitigation impact by providing an additional source of capital for transitioning to a low-carbon economy.
With his customary wry humor, Biden added:
“To state the obvious, I’m not an investment banker [or a climate scientist, presumably]. I wouldn’t go long on investments that lead to carbon pollution. I’d bet on clean energy.”
Biden pointed out that even China was beginning to understand the escalating health effects of carbon pollution. In addition to the private capital already raised and expected to come from these efforts, there’s $7.6 billion in federal spending on clean energy in President Obama’s proposed 2016 budget.
Energy Secretary Ernest Moniz also officially announced the opening of the new Clean Energy Impact Investment Center:
“Ingenuity is one of our country’s greatest assets. America’s entrepreneurs and innovators have a legacy of unleashing their creativity, grit, and imagination to invent, discover, and build solutions that not only contribute to our growing economy, but also solve some of the toughest challenges facing the nation. Investing in homegrown innovation, including the development of new, clean-energy technologies, is a crucial part of the fight against climate change–and is key to keeping America on the leading edge of the world’s transition to a low-carbon economy.”
From the DOE Clean Energy Investment Center fact sheet, DOE’s goals for the new program office:
- Single Point of Access for Information: Through dedicated, accessible internet and staff resources, the center will make information about DOE programs accessible and more understandable to the public, including to mission-driven investors. The center may also provide connections to points of contact and subject matter experts within relevant DOE programs.
- Technical Assistance: The center will share research and analysis produced by DOE and its National Laboratories on relevant developments in clean energy technology. Furthermore, the center will offer a mechanism for identifying the need for new technology analysis from DOE.
- Information on Early-Stage Projects and Companies: DOE currently has programs including the Advanced Research Projects Agency-Energy (ARPA-E), Small Business Innovation Research (SBIR), Small Business Technology Transfer (STTR), and others that help to fund and accelerate emerging early-stage technology projects and companies. The center will aggregate and make available existing, public information on entities currently engaged in partnerships with DOE.
- Connections to Additional Relevant U.S. Government Programs: The center will include information about energy and climate programs at other government agencies, including the Department of Agriculture, Department of Housing and Urban Development, Department of Transportation, Environmental Protection Agency, National Science Foundation, Small Business Administration, and the Treasury Department.
Two other important federal actions were also announced at the summit:
- The Treasury Department will facilitate issuance of guidance on impact investments by charitable foundations in clean energy technologies and other potentially mission-aligned sectors; and
- The Small Business Administration will improve financing options for private investment funds seeking long-term capital.