Renewable energy resources have become a bigger part of the grid in recent years, competing with traditional generation sources. With flat load growth, falling costs and the expansion of the energy storage sector, this trend is only expected to rise.
One area to watch is increasing investments from international asset managers and other financial organizations, according to analysts.
The increased consumption of renewable energy from corporate offtakers is "really having a profound impact," Mona Dajani, Pillsbury partner and co-leader of the firm’s Energy and Infrastructure Projects Team and leader of the Renewable Energy group, told Utility Dive.
"There are banks and capital providers that are accelerating their investments under the banner of sustainable finance," she said. "It's infrastructure funds, it's foreign pension funds, it's foreign corporations like IKEA that are very strong in Europe."
"There seems to be more interest in not just the U.S. but in other areas besides Europe because [renewable energy] is so mature there," she said. This is based on cost declines, remaining tax incentives not available in other countries, trends for deployment growth and market instability in Europe from events like Brexit, according to Dajani.
Besides promoting a "level playing field in the tax code," renewable energy advocates are looking at how corporations are measuring their sustainability initiatives.
Environmental, Social and Governance scoring is a central metric investors rely on currently. Financial institutions, energy companies and the C&I sector are looking at ESG scoring and "adapting a universal climate benchmark to accelerate the transition to renewable energy," Dajani said. A number of organizations, including market analysts from Moody's to Dow Jones, are contributing to a scoring process to represent sustainability investment.
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