The energy transition: why we hybridize financing – Sustainable finance

This winter’s energy emergency risks overshadowing the long-term transformation. To reconcile the two, financial solutions need to be hybridized.

How to finance yourself energetic transition when you have trouble paying your debts? For several months, it has been difficult for many companies to solve the equation in the context of exploding gas and electricity prices, rising raw material costs and recruitment difficulties. However, the combination of short and long term is the only way to change the situation.

A long-term transition despite the crisis

The urgency of changing course is no longer a matter of debate. The COP27 climate and COP15 biodiversity closed to 2022, and each is a reminder of the necessary mobilization of economic actors. The latter should record emergency measures in a mutation in a long run.

There are already some facing energy crises optimized their consumption for reduce bills, and it is important to start with these actions of vigilance and efficiency. To go further, we need to change the way we consume and produce energy, and even our business models. Whether it’s just to replace equipment or do business, the investment is important. to do this hybrid financing solutions is the best way to avoid economic stress.

Fund differently

The transition energy and environmental requires financing differently. It requires power investments now, offset by future savings. An industrialist looking to recover waste heat will incur significant costs to adapt their facilities, but will reduce fuel costs over time. New methods of financing must be compatible with the timing of energy savings and the timing of payments. Thinking in full cost terms allows you to take this into account, but also the carbon footprint, operating costs and maintenance.

This funding should also be able to support complex projects involving several private and/or public entities for implementation. conversions Ambitious. In order to maximize the energy potential of their area, a metropolis and industrialists can join forces within their activity zone and create a local energy loop. In order to see the light of day, such an initiative with large budgets requires a competent financing plan combining state aid, CEE awards (Energy Savings Certificates) and third-party financing, for example from the Decarbonization Fund or the Heat Fund. reduce or even cover the remaining costs.

Ultimately, succeeding in transition financing requires a combination of financial competence and technical competence to properly measure projects and deliver results. Leasing scale for charging stations will allow us to take advantage of rapidly improving technologies. For refrigeration equipment, the distributor will prefer to use an energy performance contract (EPC) to guarantee the reduction of energy consumption of its warehouses and thereby achieve the objectives of the third-tier decree.

Pragmatism of action

We need to plan to achieve the structural changes we need. Every company should start its approach with a inventoryidentify the easy and quick measures, the more ambitious and expensive ones, the preferred onesenergy efficiency and contributors to change energy mix, then determine the correct sequence of these operations. Savings from quick win measures (working on uses and optimizing existing ones) will help fund the following. Smartly combining government subsidies, private grants, third-party specific financing solutions and technical support will facilitate implementation.

Either way, we will have to pay. Either to eliminate the cause of our troubles, to foresee and implement the transition, that is drastically reduces our energy consumption and our greenhouse gas emissions. Or to accept the consequences of our inaction: rising energy bills, cascading climate damage, etc. The longer we wait, the more money we lose because we miss outpotential savings and increasing the cost of inactivity. We must innovate to achieve the sustainability and climate goals of our businesses. Hybridizing financing solutions with ambition and pragmatism is the way to start now.

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Marie-Sylvie Bertail is CEO of GreenFlex since 2020 after 7 years as DGA. GreenFlex is based on its multi-stakeholder model to support companies and territories in their transition from A to Z.

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