Moniz talks investability of energy assets

Ernest Moniz discussing challenges in energy policy in fireside chat with Mark Bloomfield

On May 26, 2022, Energy Futures Initiative (EFI) CEO Ernest Moniz participated in a virtual fireside chat titled “A Conversation with Ernest Moniz: the Challenges for U.S. Energy Policy” with Mark Bloomfield, President and CEO of the American Council for Capital Formation (ACCF). The two discussed energy policy, the “investability” of energy assets, and the energy transition.   

Bloomfield began the discussion by addressing price estimates for a global energy transition, highlighting that we will need up to $100 to $150 trillion in global investment capital to meet the needs of the transition. He then asked about new capital expenditures required to decarbonize the energy industrial economy and how to improve the returns and lower the risk of decarbonization projects.  

Moniz replied that investability of clean energy projects is one of today’s major challenges because there is a lot more capital available than there are investable, clean energy projects. “Eventually,” he said, “we hope to get to the place where we have so many projects that the challenge will be getting enough capital.” 

In addition, Moniz commented on a variety of policy and regulatory barriers that currently impede the flow of large amounts of private capital to the energy sector. Those barriers are at the federal level and also at the state level for many technologies, such as carbon capture and sequestration, for which state-level policies need to be streamlined.  

Highlighting further economic challenges, Moniz said there are many different sources of capital, such as big banks, pension funds, sovereign wealth funds, and equity investors, and they all have different risk-reward appetites. “Getting all those large pools of capital, working towards clean energy deployment is a big challenge,” he said, “one that we are taking on at EFI.”   

Looking to the future, Bloomfield asked Moniz about the potential of technologies such as hydrogen. Moniz said that hydrogen has the flexibility to be “the new natural gas,” serving in multiple sectors of the economy, including in energy-intensive manufacturing, like steel. He added the initial focus of hydrogen deployment is in “hubs” that situate supply and demand near each other. However, he noted that we still need greater cost reductions.  

EFI has convened multiple workshops exploring the concept of a clean hydrogen hub as a decarbonization pathway. Check out two of our reports highlighting policy opportunities for further hydrogen development in the United States:  

Karla Salazar

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