Released November 23, 2015 | SUGAR LAND
en
Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Earlier this month, The Goldman Sachs Group (NYSE:GS) (New York, New York) increased its commitment to clean energy and climate mitigation by $110 billion in financings and investments by 2025.
Three years ago, the investment bank committed to investing and financing a total of $40 billion in clean energy projects, and through the end of September its investments and financings in those areas totaled $37 billion, Goldman Sachs said.
In announcing its new environmental policy framework on November 2, Kyung-Ah Park, head of the bank's Environmental Markets group, said: "Environmental issues have become increasingly relevant to our clients and our investors, and have become core to our business. We are leveraging the talents of our people and the breadth of our businesses to facilitate the transition to a low-carbon future and promote sustainable economic growth."
The new, $150 billion sum reflects investments the bank will make using its own funds, as well as financings it facilitates for its clients.
In announcing its expanded commitment to clean energy, Goldman Sachs Chairman and Chief Executive Lloyd Blankfein said the firm has long had a "commitment to harness market-based solutions to help support a healthy environment and address the problem of climate change."
He added: "We will continue to work towards deploying innovative financial mechanisms through an expanded investor base focused on environmental opportunities."
On the topic of climate mitigation, the bank's new environmental policy framework pledged: "We will expand our clean energy target to $150 billion in financings and investments by 2025 to facilitate the transition to a low-carbon economy. To increase access to climate solutions, we will launch a Clean Energy Access Initiative that will target the deployment of clean energy solutions, such as distributed solar and clean cookstoves, to underserved markets. We will look to facilitate the efficient development of carbon markets and other climate-related market mechanisms as opportunities emerge."
Specific types of projects Goldman Sachs could invest in, or facilitate financing for, could include solar power, wind power, hydroelectric generation, geothermal, advanced biomass, electricity storage, energy efficiency, electric vehicles and advanced lighting such as LEDs. The bank will not participate in coal-fired power projects in the U.S., unless they are equipped with technology to capture and store carbon. But in developing nations, the bank said in its environmental policy framework that it might invest in or arrange financing for "selective" coal-fired power projects that lack carbon-capture equipment where "access to affordable energy is necessary for economic growth and poverty alleviation."
Goldman Sachs did not rule out financings and investments in oil & gas sands and hydraulic fracturing projects, but noted those potential moves would be subject to enhanced due diligence.
By the end of this year, Goldman Sachs said it would be the first U.S. investment bank to be carbon-neutral across its operations and business travel. By 2020, the firm will target $2 billion in green operational investments and seek to source 100% renewable power for its global electricity needs.
While some portion of the $110 billion in incremental support will be directed at emerging markets, sources said the bank will not overlook the U.S. Doing business domestically has its benefits over emerging nations, but if the U.S. becomes a less inviting market for clean energy investments, the bank will focus its efforts overseas.
In the U.S., production tax credits (PTCs) for wind power ended in 2014, though developers will be eligible for a 30% tax credit if their projects are operating by yearend 2016. Solar developers have a similar 30% investment tax credit (ITC) that falls to 10% at the end of next year. Federal support for renewable energy has been critical to sustaining that sector after the financial meltdown of 2008 dried up most tax-equity investment. In a tax-equity deal, investors pay funds today to acquire the future tax credits of another firm.
U.S. wind-power developers have scheduled construction to begin on about 6,689 megawatts (MW) of new generating capacity this year, according to project-development data tracked by Industrial Info. However, Industrial Info expects a large majority of that planned construction activity--as much as 90% of it--to be pushed into 2016, according to Britt Burt, Industrial Info's vice president of global research for the Power Industry. Solar developers had scheduled construction to begin on about 2,283 MW of projects this year, but Industrial Info expects about half of that to be deferred until next year.
In the U.S., renewable energy project activity is expected to soar next year, as wind and solar developers try to take advantage of federal tax credits for their projects. Wind-power developers have scheduled a total of 25,536 MW of new projects to begin construction in 2016, and solar developers plan to kick off construction of about 6,462 MW of new generation projects next year, according to our project-development data. Industrial Info does not expect all of those 2016 projects will begin according to schedule.
"Goldman Sachs' deep commitment to clean power should be welcomed by renewable energy developers both in the U.S. and overseas," Burt said. "It's been said there's no shortage of good projects, only a shortage of funding. Goldman's commitment to clean energy should help with that."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
Three years ago, the investment bank committed to investing and financing a total of $40 billion in clean energy projects, and through the end of September its investments and financings in those areas totaled $37 billion, Goldman Sachs said.
In announcing its new environmental policy framework on November 2, Kyung-Ah Park, head of the bank's Environmental Markets group, said: "Environmental issues have become increasingly relevant to our clients and our investors, and have become core to our business. We are leveraging the talents of our people and the breadth of our businesses to facilitate the transition to a low-carbon future and promote sustainable economic growth."
The new, $150 billion sum reflects investments the bank will make using its own funds, as well as financings it facilitates for its clients.
In announcing its expanded commitment to clean energy, Goldman Sachs Chairman and Chief Executive Lloyd Blankfein said the firm has long had a "commitment to harness market-based solutions to help support a healthy environment and address the problem of climate change."
He added: "We will continue to work towards deploying innovative financial mechanisms through an expanded investor base focused on environmental opportunities."
On the topic of climate mitigation, the bank's new environmental policy framework pledged: "We will expand our clean energy target to $150 billion in financings and investments by 2025 to facilitate the transition to a low-carbon economy. To increase access to climate solutions, we will launch a Clean Energy Access Initiative that will target the deployment of clean energy solutions, such as distributed solar and clean cookstoves, to underserved markets. We will look to facilitate the efficient development of carbon markets and other climate-related market mechanisms as opportunities emerge."
Specific types of projects Goldman Sachs could invest in, or facilitate financing for, could include solar power, wind power, hydroelectric generation, geothermal, advanced biomass, electricity storage, energy efficiency, electric vehicles and advanced lighting such as LEDs. The bank will not participate in coal-fired power projects in the U.S., unless they are equipped with technology to capture and store carbon. But in developing nations, the bank said in its environmental policy framework that it might invest in or arrange financing for "selective" coal-fired power projects that lack carbon-capture equipment where "access to affordable energy is necessary for economic growth and poverty alleviation."
Goldman Sachs did not rule out financings and investments in oil & gas sands and hydraulic fracturing projects, but noted those potential moves would be subject to enhanced due diligence.
By the end of this year, Goldman Sachs said it would be the first U.S. investment bank to be carbon-neutral across its operations and business travel. By 2020, the firm will target $2 billion in green operational investments and seek to source 100% renewable power for its global electricity needs.
While some portion of the $110 billion in incremental support will be directed at emerging markets, sources said the bank will not overlook the U.S. Doing business domestically has its benefits over emerging nations, but if the U.S. becomes a less inviting market for clean energy investments, the bank will focus its efforts overseas.
In the U.S., production tax credits (PTCs) for wind power ended in 2014, though developers will be eligible for a 30% tax credit if their projects are operating by yearend 2016. Solar developers have a similar 30% investment tax credit (ITC) that falls to 10% at the end of next year. Federal support for renewable energy has been critical to sustaining that sector after the financial meltdown of 2008 dried up most tax-equity investment. In a tax-equity deal, investors pay funds today to acquire the future tax credits of another firm.
U.S. wind-power developers have scheduled construction to begin on about 6,689 megawatts (MW) of new generating capacity this year, according to project-development data tracked by Industrial Info. However, Industrial Info expects a large majority of that planned construction activity--as much as 90% of it--to be pushed into 2016, according to Britt Burt, Industrial Info's vice president of global research for the Power Industry. Solar developers had scheduled construction to begin on about 2,283 MW of projects this year, but Industrial Info expects about half of that to be deferred until next year.
In the U.S., renewable energy project activity is expected to soar next year, as wind and solar developers try to take advantage of federal tax credits for their projects. Wind-power developers have scheduled a total of 25,536 MW of new projects to begin construction in 2016, and solar developers plan to kick off construction of about 6,462 MW of new generation projects next year, according to our project-development data. Industrial Info does not expect all of those 2016 projects will begin according to schedule.
"Goldman Sachs' deep commitment to clean power should be welcomed by renewable energy developers both in the U.S. and overseas," Burt said. "It's been said there's no shortage of good projects, only a shortage of funding. Goldman's commitment to clean energy should help with that."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
