To make a successful energy transition, we need to invest in essential infrastructure in the clean energy economy, as well as the transition efforts underway in traditional energy. This entails funding clean energy projects that will lower utility rates and offering innovative debt financing so that traditional energy can move away from fossil fuel equitably and efficiently.
Public funding is key to driving these changes. Like the subsidies for fossil fuels that, together with our nation’s international influence, keep our energy prices low, the energy transition requires public financing mechanisms to create new markets while maintaining our competitive advantage. Colorado already has a public option with dedicated financial instruments for these kinds of investments.
Two years in the making, the Colorado Clean Energy Fund is a publicly-backed fund designed to support businesses in every energy sector, carbon-based or otherwise. Congressional funding measures in Washington, D.C., and in Colorado’s legislature have already been introduced for the fund that need support from our representatives.
Supporting innovative financing and the CCEF is a crucial part of our state’s risk-adjusted economic recovery for three reasons:
First, they can lower utility bills for people and businesses, starting with people who need it most. At the moment, “about one in four Colorado households are behind on their power bills.” Where there are credit constraints, the fund can offer low-cost financing so residents can make energy improvements or install solar.
Likewise, most of Colorado’s commercial buildings are less than 10,000 square feet — not big enough to attract energy efficiency financing from the banks. But the CCEF can finance, aggregate and sell these projects to traditional lenders. Statewide, successful energy efficiency initiatives will also serve to lower our collective emissions and create thousands of jobs.
Second, the fund can invest in people and businesses directly involved in the energy transition. Most coal plants in the United States are no longer economically viable. Clean energy can be generated at a lower cost without public health concerns. Despite no longer being competitive, coal continues to be a major part of Colorado’s energy portfolio. So, to equitably speed the decommissioning process, the CCEF has multiple instruments to securitize their debt obligations. Like refinancing your home with a bank that doesn’t exist to maximize profits, they offer financing with lower interest rates and extended contracts. This will keep utility rates low. Energy will come from cheaper renewable sources while our coal towns are paid for their time in transition. The plants also have the option to be a part of that transition, using the debt financing to build clean energy infrastructure and continue to provide reliable energy.
Finally, the fund will accelerate our transition toward a clean energy economy, which means the creation of tens of thousands of jobs in our state alone. Before COVID, the clean energy sector was adding jobs twice as fast as the average job growth in the United States. Clean energy funds started in other states have shown that they drive job growth, and the reports associated with the national funding legislation predict 440,000 jobs will be created nationally in the first year.
The concept of a “clean energy fund” sounds like it would be mired in partisan politics, but the opposite is true. Existing funds around the country have been started by bipartisan coalitions to infuse capital into the energy transition because it creates real jobs in an industry that will define the global economy for decades.
We advocate on behalf of Signal Tech Coalition, a bipartisan group of business leaders who want to make Colorado a hub for the new energy economy: tech, jobs and investment. Together, we are advocates for initiatives where economically sound and people-driven policy intersect, and we focus on how innovation can solve our biggest problems. Right now, the innovation we need is financial, and Colorado is ready with the solution.
Federally, we need Sens. Hickenlooper and Bennet to co-sponsor the Clean Energy and Sustainability Accelerator Act. This bill will send the necessary cash into the CCEF, which can immediately begin to deploy capital.
We also encourage both our federal and state reps to host town halls with the communities that will be directly affected by the energy transition and ensure their voices are heard. Find out if unions are able to offer adequate job training programs. Listen and adjust policies accordingly.
In a recent webinar, Sen. Bennet said that “we need to be focused on combating climate change and how to help communities that are transitioning away from fossil fuels.”
Let’s put our money where our mouths are.
Sam Shriver and Quinn Antus are the directors of Signal Tech Coalition.