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What will the opportunities be for investment after COVID-19? Glennmont insights webinar

July 20, 2020

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On Wednesday 15 June, Glennmont continued  their mini-webinar series titled ‘Glennmont Insights – Financing a clean energy future’. The one-on-one ‘in conversation’ events with key political and financial stakeholders taking place over the summer explore how we can bring forward the investment required to achieve decarbonisation targets as we emerge from COVID-19.

The second event was titled ‘What will the opportunities be for sustainable investment after COVID-19?’ and saw CEO of Glennmont, Joost Bergsma in conversation with chair of the Energy Transition Committee, former Director-General of the CBI and first Chair of the Committee on Climate Change, Lord Turner of Ecchinswell.

To begin, Lord Turner highlighted the differences between the financial crisis in 2008 and the current crisis caused by the COVID-19 pandemic – Lord Turner noted that in 2008 the world saw a reduction in consumption and investment, leading to large fiscal deficits and drastic measures to stabilise the economy. He added that the current crisis was unprecedented in that largely, “incomes are still being earned, but consumers can’t spend”, leading to a build-up of private funds with the potential to be invested. Lord Turner added that this environment, with support from Governments, is the perfect time to invest in green infrastructure – private investment in green technologies which in turn leads to job creation and a decarbonised economy.

Ahead of the Special European Council meeting this week,  on the EU’s proposed response to the crisis, Lord Turner described a balance between support packages that would create jobs immediately through projects such as decarbonising buildings, packages that had the capacity to invest in the creation of assets and infrastructure and also a focus on research and development to drive innovation in new clean technologies such as  onshore and offshore wind, solar and storage, blue and green hydrogen development, electrolysis, CCS and battery, which will help us move toward our zero carbon energy goals.

Lord Turner referenced the German support package for the automotive industry, praising their approach in supporting struggling sectors but weighting financial support to favour green ideas. Adding that state support of zero carbon  power has to be “ the biggest focus” as we aim to move from a 25 per cent zero carbon energy mix to 70 per cent by 2050, a leap from 320TWh to 800 in the UK.

On minimal risk investments, Lord Turner discussed the importance of FIT and CFDs in driving investment in clean energy. He outlined the relatively risk free nature of predictable projects such as wind and solar that have a record of activity and can generate a guaranteed return for investors. Lord Turner added that the market is calling out for more projects that combine generation and storage, allowing project managers to get better returns on their energy outputs, making for attractive investment prospects and an increase in the capacity of zero carbon power.

Bringing the event to a close, Joost asked Lord Turner to reflect on the last decade in the clean energy sector, and if he felt we had made ample progress since the CCC was founded. Lord Turner was positive that the advancements seen in clean energy technology have far surpassed what had been expected, adding that he hoped someone had destroyed the reports he commissioned as chair of the CCC because they drastically underestimated  what was possible. However, Lord Turner added that on the other hand,” the accumulation of the science suggests we’re running out of time”. He noted that data on rising global temperatures, the rate at which the Arctic is warming, the danger of reaching the tipping point for methane emissions and the rate of glacial decline all point to real difficulty unless we can accelerate the investment to achieve decarbonisation.

Lord Turner closed by saying that “the COVID-19 pandemic had managed to succeed in delivering a strong consensus that public and private funds must be used to accelerate this investment”, making the most of the now cheaper and more effective technology available to us.

Glennmont will continue play its part in support of the decarbonisation agenda and we would like to take this opportunity to thank everyone who signed up to listen to the discussion, and especially our speaker Lord Turner for his insightful contribution.

For the next instalment of the series, Founding Partner and Director of Glennmont, Peter Dickson will be speaking with Eric Usher who is head of the United Nations Environment Programme Finance Initiative on Tuesday July 28th at 10:00am BST.

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