Finance for the European energy transition Sample Clauses

Finance for the European energy transition. ‌ Xxxxxx Xxxxxxxx (European University Institute), co-host of the conference, chaired the last session of the first day of the conference on green finance. It started with a presentation on "Mapping demand and supply" of green finance held by Xxxxxxxxxx Xxxxxx (Utrecht University). The INNOPATHS team firstly mapped the demand for finance in the energy transition. In most models, demand originated primarily from investments needed in RES, distribution and storage, although IEA identities also a strong call for finance on energy efficiency. Though there seems to be sufficient finance overall, the paper shows a qualitative mismatch. In particular, venture capital and funding for small and distributed sources is missing and could limit the scaling-up of new technologies. The policy design plays an integral part in enhancing finance. Beyond adjusting the use and parameters of feed-in tariffs, auctions, and quotas, policymakers should develop public investment banks to co-finance projects, to de-risk investments, lead the way and educate private investors. Xxxxxxx Xxxx (ETH Zurich) showcased "Dynamics of financing conditions and policy implications". In principle, for capital-intensive technologies, when the cost of capital increases, the component of the total technology cost that is served for financing increases, so the overall cost grows dramatically. The current situation with low-interest rates gives a competitive advantage for capital-intensive technologies, such as RES, which are also mature and more trusted by the finance sector. Thanks also to models, some policy insights have been identified. Firstly, policies need to be designed so as to enable private capital flow into low-cost project finance. The policy framework can impact costs also negatively (for example, by increasing the exposure to the market). Secondly, current low-interest rates are an excellent opportunity to support the post-COVID recovery and climate objectives. Thirdly, public funds and banks should provide the correct type of capital. Lastly, The European Green Deal represents an excellent policy framework to integrate finance with sectorial and technology policies. The discussion was led by Xxxxx Xxxxx (UCL). She was keen to gain a better understanding of where existing financing sources would need to be scaled up to fill the gaps: demand, category of investors, regions. Lack of finance appears on small tickets with low risk: such as energy efficiency and the scaling up of the first...