January 2023
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The challenge presented by climate change will require the development and rapid scaling of a broad complement of solutions. While key enabling technologies, notably wind and solar power, have already been deployed at scale, achieving an affordable and reliable net zero power grid will require the development of additional technologies. Crucially, this next generation of clean energy technologies will need to progress from demonstration to diffusion at a much more rapid pace than we have seen previously.
This report presents and discusses financial mechanisms corporate buyers can use to support the development and deployment of clean energy technologies. We first discuss two well-established approaches – prizes and purchase commitments – before moving on to discuss more novel approaches, including novel variations on the basic structure of the advanced market commitment, novel financial hedges, new ideas related to tax equity and sponsor equity, and novel ideas designed to support early-stage R&D efforts.
Together with our companion report, A Model for Clean Energy Innovation, these two reports address how energy buyers can accelerate the development and availability of technologies that currently are not widely available or economically competitive but may be needed to achieve a low carbon energy future. |
