INVEST IN RENEWABLES. THE FUTURE STARTS FROM HERE (AND FROM PRIVATE INDIVIDUALS)
By Francesco CALABRETTA
Cluster Leader Italy and Hungary Audax Renewables
We know it. If you want that Energy transition starts seriously, it is essential that public resources and investments, but above all private ones, believe in renewables and their expansion. And that we create a regulatory framework that is as shared as possible on a global level that favors the financing of projects for the generation of clean energy.
The Glasgow Climate Conference reiterated the need to invest. In addition to the commitment of the States to respect the obligations undertaken in paying the climate funds in full (the famous 100 billion dollars a 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 $130 trillion available to kick-start the Ecological Transition and achieve the goals set out in the Paris Agreement.
The economic commitment, spread over 30 years (until 2050) is distributed 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 real change. We had them already talked about a year ago, citing the case of BlackRock and its desire to include sustainability among its investment criteria. But the examples in this direction, from 2019 onwards, have fortunately multiplied. And the trend data confirm it: in the first six months of 2021, a record figure of 174 billion dollars of investment in clean energy was reached, or +1.8% over 12 months (Bloomberg). Not only. At the end of this year, renewables will be the single most important investment item in the sector energy with 367 billion dollars, i.e. 70% of the total put into new electricity generation capacity (IEA, World Energy Investment).
If it is true that the economic resources currently used 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 Taxonomy o 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 one dividing line between those initiatives that will be able to obtain funding because they comply with "green" criteria and those that, however, will be excluded because they are not. Also in this case the strategy adopted focuses on the involvement of private capital.
In Italy, the expansive 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 "green revolution" that is so talked about, with the 72% of electricity coming 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 the full deployment of renewable energy in the area. The almost deserted auctions are unequivocal evidence of this given that between May and June, 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 Audax Renovables group of which Audax Renewables is part is, in this sense, significant. It is an international reality that began this journey many years ago, when few still believed in it. It did so by focusing on innovative financial systems such as PPA or through the issuance of "green" bonds it promoted the spread of renewable energy. Today the Group invests directly in wind and photovoltaic parks, managing a portfolio of operational generation projects of 91 MW in wind farms in Spain, France and Poland and 55 MWp photovoltaic in Spain. Additionally, it has 66 MW of wind power under construction in Panama and 21 MWp in PV projects, plus a total of 87 MW under construction, and has a PV portfolio of 2,291 MWp in various stages of development across Spain, Portugal and Italy. We would like to remind you that authorization has recently been obtained for the entry into operation of photovoltaic systems 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 processes is essential if we want to progress. Equally without economic resources it is difficult to change the situation. Today, Europe's funding in the form of PNRR and the Green Taxonomy can provide a major boost to investment. However, it remains private initiative the determining factor for making change concrete, as the history of our Group clearly shows.
