A new report outlines pandemic-induced trouble for energy efficiency projects and cleantech.
The International Energy Agency released a report today that says the pandemic has sparked the largest ever drop in global energy investment, including for renewables, energy efficiency projects, and research and development on energy technology and innovations. More on the report after today’s tech headlines…
Today’s headlines:
🚜 AGRICULTURE: Minnesota entrepreneurs are working to advance the use of Kernza, a perennial grain developed by scientists at the University of Minnesota and Salina, Kansas-based nonprofit The Land Institute. Kernza is the first grain developed to be environmentally beneficial: It only needs to be planted once, so it reduces soil erosion, maintains soil quality, improves water quality, and puts carbon into soil. (Minne Inno)
🤝 PARTNERSHIP: The City of Chicago has partnered with local startup Rheaply (online marketplace platform company spotlighted in Centered last week) on the “Chicago PPE Market”, a program that launched this week to help facilitate getting personal protective gear to the city’s small businesses and nonprofits. (City of Chicago)
💰 FUNDING: Indianapolis-based Encamp, an automated platform for managing environmental compliance, has raised $3.1 million in series A funding. The funds will be used to expand platform development. (news release)
📜 LEGISLATION: The National Science Foundation would be revamped with a new name, a new tech and innovation arm, and an additional $100 billion in funding over five years, under bipartisan bills in both houses of Congress. The proposal is somewhat controversial because it could alter the foundation’s historical focus on basic research over commercial innovation. (Science)
Now, back to the International Energy Agency’s fifth annual report on energy investment flows, which examines all areas of fuel and electricity supply, efficiency, and research and development.
The data: IEA’s analysis at the beginning of the year predicted a 2% increase in energy capital expenditures in 2020 — the highest amount since 2014. But the pandemic created a sharp turn and IEA now predicts 2020 will end with a nearly $400 billion, or 20%, loss over 2019. That’s the largest energy investment decline on record.
Investments in renewable energy projects are expected to fall 10% this year. However, the report notes that unit cost reductions in recent years have led to a steady increase in clean energy technologies including solar photovoltaic, wind, and electric vehicles. Therefore, even though clean energy spending is expected to dip this year, the share is expected to rise in relation to total energy investments.
Investments in energy efficiency and end-use applications also are taking a hit, estimated to fall 10-15%. The report warns of overall serious implications for energy efficiency gains and clean energy transition projects.
What it means for the Midwest: The Midwest will certainly be hurt considering the amount of efficiency and renewable innovation that take place here. Investments in these types of Midwest cleantech projects likely will suffer proportionate to the IEA estimates, but there is also a chance that investment losses will be worse considering the amount of U.S. cleantech money concentrated on the West Coast.
The bright side: North America is called out as one of the two places (besides Europe) that holds many opportunities for newer sources of low-cost clean energy financing. For example, most institutional investors are in these two places, and 45% of them are in North America alone.
Government’s role: The report says governments play a large role in capital expenditure decisions to reduce energy demand. Leaders should demonstrate the importance of energy and sustainability by incorporating strategies into government policies that advance the clean energy concepts and innovations.
What’s next: IEA promised to release a report soon that would lay out ways for governments to quickly create jobs and jump-start economic activity through building cleaner, more resilient energy systems.
How is the pandemic affecting clean energy technology and innovation in your community? If you work in the industry, help me understand what’s going on out there. If you’re willing to share your story or observations, email katie@centered.tech or connect on Twitter @centereddottech.
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