Author:        Published: 11/19/2019                  Utility Deep

The financial mechanisms are bringing investors to renewables and distributed energy as utilities, co-ops and munis move away from uneconomic legacy assets.

Hundreds of billions of dollars in untapped new money can finance the U.S. power system’s transition away from legacy fossil assets to renewables and distributed generation.

Utilities like Duke Energy and Xcel Energy have issued billions in green bonds to fund renewables development. Green banks in New York, Connecticut and other states are backing investments in distributed resources and energy efficiency. It appears much more institutional money wants in on the green opportunity.

“Green bonds are a capital-raising mechanism that a wide range of institutions could use to raise capital,” Coalition for Green Capital Executive Director Jeff Schub told Utility Dive. “A green bank is an institution [capitalized by public funds] that invests capital in clean energy projects. [They] are complementary, capital raising and capital deploying.”

Together, they can attract hundreds of billions in institutional and financial market money to fund utility investments in large-scale renewables and public sector investments in local distributed generation. They can also work together to support utility transitions away from high-cost legacy generation to lower-cost “green” generation, stakeholders told Utility Dive.