Climate Bonds convenes Electrical Grid Group to develop low energy transmission, distribution and storage criteria for green bond investment

Formation of Technical Working Group first stage in Criteria development for key part of clean energy systems

Further step in Climate Bonds 2018 program to expand reach of the Climate Bonds Standard for green bond investment in new sectors

What’s it all about?

The Climate Bonds Initiative has announced the formation of a new Technical Working Group (TWG) to develop new Sector Criteria to stimulate investment in low-carbon electricity transmission, distribution and storage infrastructure (Electrical Grids).

Why Grids?

At present, most attention in the electricity sector has been focused on low carbon and renewable electricity generation assets. Consistent methodologies for assessing climate change risks to existing and future grid infrastructure are lacking.

Yet grids are changing. Microgrids, smart grids, super grids, distributed energy systems and new forms of storage are emerging as the nature of energy generation and energy management changes.

To accommodate large scale renewable energy integration, existing transmission must be updated and expanded and additional distribution and storage infrastructure is required. According to the International Renewable Energy Agency (IRENA), transforming the global electrical grid system will require investments of USD 9 trillion by 2050, – a doubling over current and planned policies.

The purpose of the Criteria will be to provide a science-based framework for determining when electrical grid infrastructure projects and assets are compatible with a low carbon, climate resilient economy, align with the Paris goal of limiting warming to less than 2 deg and are eligible to be Certified under the Climate Bonds Standard.

Our Technical Working Group (TWG)

The new TWG convenes expert representatives from nine organisations, including universities, NGOs, consultancies, multilateral banking institutions and industry associations, who have widespread and direct expertise of global electrical grids.

The work of the TWG in developing the Criteria will be pivotal to enabling investors, issuers, regulators and governments to assess the green credentials of projects and assets in the electrical transmission, distribution and storage sector. 

Current TWG members:  
  • Carel Cronenberg & Oleg Bulanyi, EBRD
  • Arni McKinley & Mark Barrett, UCL
  • Andreas Biermann, Green Climate Fund
  • Claudio Alatorre, IDB
  • Helen Jackson, Independent Consultant
  • Wenqin Lu, CECEP
  • Eric Hittinger, Rochester Institute of Technology
  • John Sinner & Federico Ferrario, EIB
  • Lorcan Lyons, Independent Consultant

New members are still welcome to join the TWG, if you are interested please contact Ujala Qadir and explain why you'd be a good candidate to participate.

IEA projections

According to the the International Energy Agency, around 40% of the global power sector’s investment needs up to 2040 will be taken up by extending the energy network, adding 75 million km of new line.

Defining the characteristics of low carbon and climate resilient electrical grid systems, compliant with a 2 degree climate scenario, is an integral part of both energy transition and attracting green finance.

The Last Word

As the Criteria are being developed by the TWG, they will incorporate feedback from an Industry Working Group (IWG) consisting of bond issuers from the electrical grids sector, investors, verifiers and other intermediaries. Once developed, the Criteria will be released for public consultation, hopefully in October 2018, and finally submitted to the independent Climate Bonds Standards Board for approval.

Stay tuned!

‘Till next time,

Climate Bonds

Disclaimer: The information contained in this communication does not constitute investment advice in any form and the Climate Bonds Initiative is not an investment adviser.  Any reference to a financial organisation or debt instrument or investment product is for information purposes only. Links to external websites are for information purposes only. The Climate Bonds Initiative accepts no responsibility for content on external websites.
The Climate Bonds Initiative is not endorsing, recommending or advising on the financial merits or otherwise of any debt instrument or investment product and no information within this communication should be taken as such, nor should any information in this communication be relied upon in making any investment decision.
Certification under the Climate Bond Standard only reflects the climate attributes of the use of proceeds of a designated debt instrument. It does not reflect the credit worthiness of the designated debt instrument, nor its compliance with national or international laws.
A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind, for any investment an individual or organisation makes, nor for any investment made by third parties on behalf of an individual or organisation, based in whole or in part on any information contained within this, or any other Climate Bonds Initiative public communication.