According to Harry Boyd Carpenter, who works as the managing director (M.D.) for the green economy as well as climate change at the EBRD (European Bank for Reconstruction and Development), overall prices for the business will trend downwards because there are minimal impediments to scaling up (EBRD).
Renewable energy still makes up a minor portion of the energy mix in most of the EBRD’s region. The EBRD offers technical assistance and project finance to renewable energy projects, engages in policy debate with energy market stakeholders, and assists governments in building favorable regulatory frameworks.
Owing to comparatively high investment costs for every kW installed, low energy rates in many countries, and inadequate institutional capabilities and regulatory frameworks, renewable energy investments have lagged. As a result, the EBRD has expanded its funding for biomass, wind, hydro, and solar projects. Many of the region’s power systems have reduced CO2 emissions as a result of this.
Greenflation, or the expenses associated with going green, is a problem, according to Vaibhav Chaturvedi, who is a fellow at the CEEW (Council on Energy, Environment, and Water).
“Throughout the world, underpinning commodity prices are going up,” he remarked. Metals used in energy transition technologies, such as nickel, tin, aluminum, copper, and cobalt, have seen price increases of 20 percent to 91 percent this year. Metals used in the energy transition’s price performance on LME in 2021.
Chaturvedi, on the other hand, considered the decreased cost of credit as a “significant leverage” to offset the rise in underlying expenses. The worldwide renewable energy market would more than double to approximately $2 trillion by the year 2030, from $881 billion in 2020, according to Allied Market Research.
Despite supply chain and inflation interruptions, Gauri Singh, who serves as the deputy director-general in charge of the International Renewable Energy Agency (IRENA), stated that lower finance costs resulted to a record output of 260 gigawatts (GW) of energy from the renewable sources last year. “Anything that poses a climate risk will not be sold for a low price. The market for renewables, on the other hand, is softening “Singh remarked.