(Overview of the Making Solar Bankable Conference in Amsterdam held on 15 and 16 February in Amsterdam)
The exponential growth of solar power generation places the technology at the heart of the transition to clean energy, and while there are constant challenges and shortcomings, the message to the industry from investors and consumers alike is “Just do it!”.
Opening a two-day conference on Making Solar Bankable, Former UNFCCC Secretary Christiana Figueres said the solar sector should be congratulated on its significant impact so far, and described the renewable energy revolution as ‘unstoppable, irreversible and exponential’.
With the climate science behind the drive to clean energy now accepted, city authorities and corporates in particular are supportive of new technologies, while the rapidly evolving green bond market has given solar-focused issuers a deeper, cheaper source of capital.
Figueres said the conversation about access for off-grid rural communities ‘has not yet been won’, and she is increasingly concerned that undercutting bids at energy auctions – which have proved a highly successful market structure — might cannibalise the industry at the very point when it needs to expand quickly.
Governments also need to step up on issues of access, policy and trade, but broadly, all stakeholders were aware of the urgency to act. She told 500 delegates: “We know concrete models have to go to scale. We know we need cross sector collaboration to attract private capital. We have endless discussions about Blended Capital. Let’s just do it!”
A dynamic approach was also encouraged by Sean Kidney, CEO of the Climate Bonds Initiative, as he described how a simple and inclusive marketing concept had helped create a large, liquid and fast-growing green bond market worldwide, accessible to both rich and poor countries, supra-national and corporate issuers.
Some US$60-90 trillion is required in climate change mitigation or resilience measures in the next 20-30 years. Kidney suggested that capital now sitting in low yielding government bonds could be switched into higher yielding ‘green’ financial instruments if investor needs for liquidity and other measures are met. “There is risk appetite out there, and there is no shortage of money. Good deals will always find funders.”
Speakers at the Amsterdam event traced the evolution of the renewable energy sector and the increasingly evident slowdown in fossil fuel production, while noting the different regional energy priorities and preferences. Asia leads the world in the adoption of solar technologies and generation, with exponential demand in both developed and emerging economies.
In Africa, solar power is better established in some markets than others, but the continent as a whole is desperate for base load power that will support rapid industrialisation. Rural communities, meanwhile, prefer reliable, low-cost micro grids which meet their particular needs.
Solar cedes to hydro power across much of Latin America, with growth projections in markets like Chile, Argentina and Brazil not expected to change much in coming years. An outlier is Mexico, where there is rapid take-up of solar power. Policy support and legal reforms would accelerate interest, noted Jay Gallegos, General Director of Wind and Solar at CMI ENERGÍA.
The future shape of both technologies and markets proved a lively area of discussion. Yuri Van Geest, Author and CEO of Exoxo, described the ‘tsunami’ of change about to descend on the solar and other energy sectors, as artificial intelligence (AI), nanotechnology and quantum computing become mainstream.
New materials like graphene and nanophotonics will render ‘structures’ like solar panels obsolete, as coatable energy generators and storage solutions evolve. “The next generation will start with AI and then build the hardware around it. AI and deep learning will be the only way to compete in five years’ time. The challenge will be how to make the technology affordable, to democratise it.”
He believes blockchain will become the operating system for energy generation, which will decentralise at the edges, and Bitcoin or another cryptocurrency will form the payment infrastructure for peer to peer trading and lending, resource management and public access. Concerns remain about the stability, scale and sustainability of Blockchain, but proponents believe it already presents a viable alternative to existing payments systems.
A recurring theme throughout proceedings was the need for large scale utilities and off-takers to modernise, reform and participate in the transition to renewable energies, while policymakers and regulators were urged to standardise requirements and enforce them consistently. “Everyone wants business in new markets but we need a reliable delivery partner,” noted one speaker. “Everyone has to take some responsibility to make the whole chain work.”
The dynamism in the solar sector worldwide derives from the mission – to address and reverse the damaging effects of greenhouse gas emissions and man-made climate change through knowledge, partnership and leadership. There is no lack of commercial opportunity or innovation, as the technological advances are running ahead of traditional social, policy and financial structures. Public support for new, clean energy is increasing, making for a ready consumer base.
Social entrepreneur Jeremy Leggett described the solar revolution as ‘a great saga with dramatic storylines’. “The fossil fuel incumbency faces multiple existential threats because global society is waking up to the threat to civilisation.”
“My sense is that the industry is pushing at an open door,” said one delegate. “There are operational blockages, and some policy gaps, but it is clear that finance is not an issue. The message is that we just have to get out and do what we have been talking about doing for so long.”