European Investment Bank (EIB) cut lending to fossil plants, supports renewables

London-the European Investment Bank (EIB), the world's largest public financial institution, has announced that effective immediately, it no longer the most coal, brown coal and oil fired power plants in Europe its climate targets to meet as an aid for finance is.

The announcement comes on the heels of a similar announcement by the World Bank, which has said, that it support "only in rare cases." will power plants in the developing world for coal

At a meeting this week that the EIB Board of Directors agreed to introduce an emissions performance standard (EPS) for energy projects, investments in power plants for fossil fuels, which have not implemented the emission technologies, which is effectively blocked the emitting more than 550 g/CO2 per kWh, screen. Coal plants get more funding, if with carbon capture and storage (CCS) and power (CHP) or cogeneration, biomass co-fire technology in place.

The Board said that the standards, after an eight-month consultation over 80 industry associations, national committees and individual companies, are designed to strengthen support for investments in renewable energy and energy efficiency in Europe. Richard Willis, press officer of the EIB said REW, that the move "our ongoing focus towards renewable energies opens so far and reflects how we see our primary focus on investments in the coming years." Green as the WWF welcomed said the step but it does not go far enough, and some Member States had reportedly urged groups, the more stringent standards will be implemented immediately.

"In determining at what level the EPS set we nature of emissions across a range of technologies saw,", said Willis. "We have set a standard unanimously by all Member States which reflects current policy but the guidelines no longer still because we were asked that we review and consider also the exceptions that are in place to ensure we concentrate primarily on networks, renewable energy and energy efficiency."

Two exceptions to the standard, which it more financing for coal-fired plants, to the security of supply or allow "contribute to the alleviation of poverty and economic development", contribute in other regions of Europe, have been marked by green groups.

"We decided that the total new guidelines would be considered in the autumn of next year – this is normal that every initiative, which committed the Bank," said Willis. "We look to see if the level the difference between projects continue to the 550 g figure reflected, or whether technology improves, so we had a lower number, the more [] emission reduction and biomass investment would allow." He also speculated that "much stronger set" climate goals the next year's European elections most could follow the time ", which would be taken into account."

A number of Member States have highlighted the continuing importance of the gas as a transitional technology to a low-carbon economy, and the EIB said Willis recognizes this, although he didn't say what specific measures have been taken. But he said, "really, our main focus is for 90 per cent of our future commitments are in the areas of renewable energy, energy efficiency and grid networks to ensure that renewable energy can have an important role in Europe's energy mix." Investments in the network infrastructure is crucial, he said, and "no single Government or institution, who pay for it can alone; Companies are stretched. We can play a role as an important source of funding and a supporting role in providing technical assistance. As co-financier, we support about one-third of project funding on average, but can we contribute up to 50 percent, we can help, in other financial sources, often from other banks to bring, which is not such a big focus and exposure to renewable energy but are happy, with other much-needed capital for long-term investments to work."

Earlier this week signed a financing bank with Dutch grid operator TenneT for new grid infrastructure, linking the North Sea to Northern Germany and today the Bank and Spanish utility Iberdrola signed a loan agreement for €200 milliion for promoting the modernisation of the electricity network in Spain. Such net investment "is key to the use of not only existing investments in renewable energies, but also new investment as it comes forward", said Willis.

I am delighted, he concluded that "with regard to renewable energy, we realize that on a snapshot from year to year based on investment in the face of the different energy markets and regime varies. We are closely related to most of the larger projects but also always on the lookout for ways to work through intermediary banks to support smaller systems. We have a continuing role in other sources of financial support renewable energy: banks that can't our commitment on renewable energy to engage. We see this in major projects in the North Sea and in sub-Saharan Africa and elsewhere."

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What stops banks lending to energy efficiency projects?

Four years after the US credit market crashed, continue to fight energy efficiency projects to secure the financing.

What is the problem? A weak economy, of course. But if it leads deeper to energy efficiency, and renewable energy on-site - the problem.

It is not the lack of interest in green electricity. On the contrary, says Angela Ferrante, Director of the alternative energy solutions at Energi, a Massachusetts has Ruckversicherungs Gesellschaft, the insurance and risk-management products for the energy industry.

Installations are banks lending, projects, partly because the number of customers now knocking on their doors, who are interested in funding for energy efficiency and Solar Green.

"If they hear it from their customers, much convincing as hearing about green so and so in the newspaper it is" she said.

Also see the banks of energy efficiency as a new market opportunity. Energy efficiency is fast growth and strong Government support, especially in the expensive energy markets in California and the Northeast are experiencing.

"Banks with new rules face and try to see what products they in can diversify", Ferrante said.

But lenders are terrified when they begin to evaluate the risks associated with energy efficiency and on-site solar.

For example, energy efficiency and solar companies often based their sales pitch to the customer about the guaranteed energy savings. Many deals are structured in such a way that the customer for the geothermal energy with money on energy costs saved pays. What happens if something goes wrong and the energy savings do not materialize? Is the Bank for the loan may collect? And what serves as collateral? Is the loan in default, the Bank go into the House, Office building or factory and ribs from the solar panels, lighting, efficient engines or insulation? Probably not.

Energi tries, "green energy projects for lenders and energy developers with new products from insurance and warranty-de-risk". Such a product warranty insurance, energy savings backstops the promised energy savings, even for small contractors and energy service companies (ESCOs).

Larger ESCOs could such guarantees on their own due to their size and their clientele, the market often provide financially stable 'Mash'--urban/College/schools/hospitals. But it was difficult for smaller businesses and entrepreneurs to provide companies and households, to do the same.

In order for such insurance products could be "Game changer," said Kevin Kaminski, Energi senior Vice President for alternative energy solutions. Warranty insurance smaller energy companies have the same favourable conditions as the bigger players - offer your customers the option, and the smaller companies can take literally the deals of the Bank as a low-risk proposition.

Federal funding and incentives are scarce, is the green energy industry innovation in financing such as Energi probably more and more to see the products. Solar gardens are another example of the emerging innovation as well as real estate investment trusts and master limited partnerships (MLPs), a form now allows for oil and gas investment but non-renewable energies. To learn more about solar gardens and MLPs, see my article "U.S. renewable energy: new financial models" in the issue of November 2012 in Platts Energy Economist. More information on green energy and risk find Energi free Guidebook, ' risk reduction for reference Guild for new energy finance. "

ELISA Wood is a long-time energy efficiency energy markets, their free newsletter is available at RealEnergyWriters.com