“Shifting the Financing Playbook: The Future of Clean Energy Investments According to Tom Steyer”

In a recent address at the GreenFin 24 conference in New York, climate tech venture capitalist Tom Steyer highlighted the significant shift in financing trends between fossil fuel projects and renewable energy plants. Despite a century of deals that have made borrowing costs lower for fossil fuel projects, Steyer emphasized that the forcing function for future financing decisions will be driven by factors beyond just economics.

Steyer pointed out that renewable electricity accounted for a staggering 86 percent of new generation capacity added globally in 2023. However, investors still gravitate towards fossil fuel projects due to the perceived reliability of returns. Steyer criticized this mindset, stating that the forcing function for future financing decisions should be centered around the impact on human life, health, and economic welfare.

The long-term consequences of continuing to support coal or natural gas plants could have financial implications as well. Steyer drew parallels to the subprime mortgage crisis, suggesting that investors focused solely on economics could face accountability sooner than expected. On the other hand, renewable energy presents a significant growth opportunity in a world where energy demand is on the rise.

Steyer’s optimism extends beyond the U.S., as he sees potential for innovation in countries like China, India, Indonesia, the Philippines, and Vietnam. Vietnam, in particular, has made significant strides in adopting renewable energy, with solar, wind, and hydrogen accounting for a substantial percentage of electricity generation.

Despite the progress in renewable energy adoption, challenges remain, including the intermittency of solar and wind-generated electricity. Additionally, fossil fuels continue to receive substantial subsidies, amounting to $600 billion last year. Steyer remains hopeful about the transition to clean energy, emphasizing that the question is not if, but how fast the shift will occur.

Overall, Steyer’s insights shed light on the evolving landscape of energy financing and the growing momentum towards renewable energy sources. As the world grapples with the impacts of climate change, the shift towards clean energy solutions is becoming increasingly imperative.