Renewable energy industry hopeful about Paris meet

‘Global warming’ is making it nice and warm for the renewable energy industry, which may be close to being granted its one big wish — cheap finance. This is likely to happen at Le Bourget, Paris, in December.

The year end will see negotiators from 196 countries gather at this Paris suburb to see if they can agree on something that could slow down global warming. If the talks succeed, all the countries — for the first time in history — will agree to bring down greenhouse gas emission.

This promises funding like never before. Although such promises have been made before, a few developments suggest it could be different this time. First, the long-promised Green Climate Fund is off the ground. Thirty-three countries have pledged $10 billion. “It is now open for business,” said Héla Cheikhrouhou, Executive Director of the Fund, on June 5.

The Fund aims to mobilise $100 billion a year from 2020, most of which will go to supporting clean energy projects.

Second, the so-called Global Apollo Programme, crafted by a group of scientists and businessmen, aims to mobilise $23 billion a year towards technology development for making renewable energy cheaper than coal-based power.

The funds will come from participating nations that would be called upon to pool in 0.02 per cent of their GDP. Third, investment funds pulling out of coal and oil, will be moved into green energy.

A number of institutional investors have announced such divestments — Rockefeller Brothers Fund, French insurer AXA, French banker Credit Agricole, Church of England, Stanford and Syracuse Universities.

But the biggest came last month, when Norway decided to pare its $900-billion sovereign fund’s exposure to coal, terming the investments a “climate risk and a future economic risk.” There are also enough renewable energy projects to absorb the growing green kitty. In 2014, the world added a record 128 GW of renewable energy capacity (37 per cent wind, 33 per cent solar), which was 45 per cent of all the power capacity built that year.

The International Renewable Energy Agency says 164 countries have set at least one renewable energy target, up from 43 countries in 2005. India’s renewable energy companies too see a connect with the Paris conference, especially on the funds front. Wind industry veteran and Managing Director of Enerfra Projects UB Reddy sees a “direct link”, “especially on the equity side”. “We look forward to the Paris Convention,” says Anil Sardana, MD and CEO, Tata Power, “to continue financing support of developing countries’ low carbon developments.”