Its fellow investors include Canada's Caisse de depot et placement du Quebec.
Isla Binnie
Wed, August 16, 2023
FILE PHOTO: Power-generating Siemens 2.37 megawatt (MW) wind turbines are seen at the Ocotillo Wind Energy Facility as the spread of the coronavirus disease (COVID-19) continues in this aerial photo taken over Ocotillo, California
By Isla Binnie
NEW YORK (Reuters) - Invenergy Renewables, Blackstone and Canada's second-largest pension fund said on Wednesday they struck a deal with Bank of America to help buy wind and solar plants worth $1.5 billion, capitalising on a new tax structure included in President Joe Biden's landmark climate law.
Developers and investors are working on ways to take advantage of a provision in the 2022 Inflation Reduction Act(IRA) which gives companies tax breaks for funding the clean energy projects which can help wean the world off fossil fuels.
Invenergy said in a statement it agreed to sell tax credits worth $580 million to Bank of America, and put those funds towards buying 14 projects from American Electric Power.
Policymakers hope the new system will bring more money from fresh sources into renewables projects which have long relied on a limited group of large banks which can handle the process of buying equity stakes and taking the associated tax breaks.
This is the first large-scale transaction of its kind to be publicly announced, Bank of America's global head of sustainable finance Karen Fang said in the statement.
It "creates a financeable transferability product that will be used to scale the growth of renewable energy," Fang said.
Around $4 trillion will need to be spent on clean energy development globally each year by 2030 to allow the world's economies to cut greenhouse gas emissions to net zero, meaning no more than can be captured by natural sinks like forests or using technology, the International Energy Agency said.
Analysts at investment bank Credit Suisse have estimated the IRA could lead to the generation of tax credits worth $576 billion by 2031.
Treasury Department and Internal Revenue Service published rules on how to regulate tax credit transfers in June, and they are expected to launch an online registry by the end of 2023.
Private equity firm Blackstone has invested around $4 billion in Invenergy. Its fellow investors include Canada's Caisse de depot et placement du Quebec.
(Reporting by Isla Binnie; Editing by Marguerita Choy)
Wood Mackenzie: govts' 'unrealistic' offshore wind expansion target would require $100 billion by 2026
Reuters
Thu, August 17, 2023
Turbines of the WindFloat Atlantic Project, a floating offshore wind-power generating platform, are seen 20 kilometers off the coast in Viana do Castelo
(Reuters) - Government targets to increase wind power installations would see annual capacity additions reach 80 gigawatts (GW) per year by 2030, requiring $100 billion in secured investment in the supply chain by 2026, Wood Mackenzie said in a report.
The research and consultancy firm forecast annual capacity is more likely to increase by 30 gigawatts (GW) a year by 2030, which would require $27 billion of secured investment by 2026.
"The supply chain is struggling to scale up and will be an impediment to achieving decarbonisation targets if change does not happen," said Chris Seiple, vice chair, power and renewables at Wood Mackenzie.
"Nearly 80 GW of annual installations to meet all government targets is not realistic, even achieving our forecasted 30 GW in additions will prove unrealistic if there isn't immediate investment in the supply chain," Seiple said.
Wood Mackenzie noted that the low profit margins on offshore wind production and uncertainty about project timings resulting in very different supply-chain needs are making it hard to drum up investment in the sector.
According to the Statistical Review of World Energy report in June, global wind and solar power grew to a record share of 12% of power generation last year, surpassing nuclear.
Target setting and plans for power market infrastructure to support offshore wind need to extend beyond 2030 to scale up the offshore wind supply chain, analysts at Wood Mackenzie said.
(This story has been corrected to say that an investment of $100 billion, not $27 billion, would be required by 2026 in the headline and paragraphs 1 and 2)
(Reporting by Anushree Mukherjee in Bengaluru; Editing by Susan Fenton)
Reuters
Thu, August 17, 2023
Turbines of the WindFloat Atlantic Project, a floating offshore wind-power generating platform, are seen 20 kilometers off the coast in Viana do Castelo
(Reuters) - Government targets to increase wind power installations would see annual capacity additions reach 80 gigawatts (GW) per year by 2030, requiring $100 billion in secured investment in the supply chain by 2026, Wood Mackenzie said in a report.
The research and consultancy firm forecast annual capacity is more likely to increase by 30 gigawatts (GW) a year by 2030, which would require $27 billion of secured investment by 2026.
"The supply chain is struggling to scale up and will be an impediment to achieving decarbonisation targets if change does not happen," said Chris Seiple, vice chair, power and renewables at Wood Mackenzie.
"Nearly 80 GW of annual installations to meet all government targets is not realistic, even achieving our forecasted 30 GW in additions will prove unrealistic if there isn't immediate investment in the supply chain," Seiple said.
Wood Mackenzie noted that the low profit margins on offshore wind production and uncertainty about project timings resulting in very different supply-chain needs are making it hard to drum up investment in the sector.
According to the Statistical Review of World Energy report in June, global wind and solar power grew to a record share of 12% of power generation last year, surpassing nuclear.
Target setting and plans for power market infrastructure to support offshore wind need to extend beyond 2030 to scale up the offshore wind supply chain, analysts at Wood Mackenzie said.
(This story has been corrected to say that an investment of $100 billion, not $27 billion, would be required by 2026 in the headline and paragraphs 1 and 2)
(Reporting by Anushree Mukherjee in Bengaluru; Editing by Susan Fenton)
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