As Prepared for Delivery

Introduction

Good afternoon everyone. It has been an incredible couple of days, and I want to thank Georgetown University for hosting Day Two of the Secretary’s Climate and Clean Energy investment forum.

You’ve heard from smart and serious policymakers, investors, entrepreneurs and scientists. You heard them discuss the challenges and opportunities before us when it comes to climate financing, clean energy deployment, and adaptation and mitigation strategies.

Want I want to focus on today is what all of us can do to ensure clean energy becomes an even larger part of the world’s energy mix. As Secretary Kerry mentioned yesterday the old bromide of a trade-off between growth and environmental protection has been disproven. We are at a point where meeting growing energy needs and protecting the environment can go hand-in-hand.

So my challenge to everyone here today – and as the Secretary said yesterday – is to think about how we can build partnerships with industry, governments, and civil society, to put in place the right policies to make the widespread deployment of clean energy a reality.

There is a real economic market to be developed – and we need to seize the opportunity.

The Scale of the Challenge and the State of the Market

We know that the world’s population will significantly expand in the coming decades. This is going to mean a huge new demand for electricity and an unprecedented opportunity for clean energy.

According to the OECD, by 2050 the world’s population will hit 9 billion people, up from about 7.3 billion today. If we’re going to provide energy to the 1.3 billion people who currently lack it, as well as supply electricity to an extra 2 billion people, we are going to have to create massive amounts of new energy.

The OECD tells us that to meet this new demand, by 2050 we will need to generate 80 percent more energy than we do today.

According to the Pew Clean Energy Initiative, in just the next 15 years, we can expect the world will add more than 5,500 Gigawatts of electricity capacity. This is the equivalent of adding all the power generation that exists in the world today.

To bring this energy and energy infrastructure online will require around $7.7 trillion in energy investments. Two-thirds of that $7.7 trillion is going to be invested in clean energy.

And more than half of the new capacity is expected to come from clean energy.

Keep in mind that this projected growth is expected to occur despite the inconsistent patchwork of regulations and policies that currently impact the clean energy industry.

Innovation

Over the past decade, technological innovations and new financial instruments have created a market for clean energy products, and together these innovations are transforming the renewables industry.

The two most significant technological advances have been in storage, and in distributed energy systems, or “off-grid solutions”.

With respect to storage, the CEO of First Solar – one of the world’s largest solar development companies – has predicted that while solar panels alone won’t immediately power entire countries, rapid advances in storage and other technologies could enable this to happen by 2040.

Additionally, new home battery products, including the one that Tesla Energy is rolling out, could be a “game-changer”. This is the first long-term battery-storage solution ever created for broad public use.

Off-grid solutions are disrupting how energy is produced and used. Off-grid sources include small-scale power generators, like the solar panels on home roofs. Where electricity generation was once the sole responsibility of utilities, off-grid technologies are upending this model, allowing individuals to generate their own clean power and sell the excess back to the grid.

The International Energy Agency estimates that if everyone on earth were to gain access to electricity by 2030, more than half of the new electrical connections would be through off-grid solutions. We expect the vast majority of those new connections will come from renewable energy sources. The cost of low-carbon technologies will make it cheaper and easier to get electricity from these sources then from fossil fuels.

Finance To Support Clean Energy

Technology alone is not enough to transform our energy mix.

These new forms of energy production must also be bankable. The market here has responded with new financial innovations alongside these new technologies.

These include green bonds; standardized contracts; pooling of investments to identify new asset classes, which is to say, securitization; and global funds solely dedicated to clean energy projects.

We know that financing for a clean energy infrastructure has begun to scale up.

Policy Prescriptions

Going forward, governments need to do more to create policy environments that catalyze investments in clean energy. Different policy prescriptions will be needed for different countries.

Some of the common areas that need to be prioritized are:

• Making clean energy investments more competitive;
• Developing wholesale energy markets for clean energy; and
• Linking energy efficiency policies with ones that support clean energy investments.

Investors are far more likely to invest in clean energy sectors where rules do not favor fossil fuels over other types of energy. It makes little economic sense to invest tens-of-millions of dollars into a clean energy project if you know before you’ve invested your first penny that a country’s regulations ensure fossil fuels will be a cheaper alternative. Similarly, energy policies that only provide subsidies to electricity delivered over a grid will scare off investors interested in growing a clean, off-grid energy delivery systems.

Additionally, policies that favor single-source energy producers over independent or off-grid producers will slow growth in the clean energy sector. Off-grid, clean technologies enable many different actors to generate electricity, which is often cleaner and cheaper than conventional energy production. Policies that let markets dictate a country’s energy mix will spur investments in the clean energy sector.

Finally, more needs to be done to explicitly link energy efficiency with clean energy policies. Efficiency has been called the “low-hanging fruit” of the challenge to both meet our energy needs and reduce our carbon footprint. Energy efficiency technologies themselves are a growing and lucrative product market, and linking clean energy policies with energy efficiency products can help grow this sector even further.

US Efforts To Enable Worldwide Adoption

Today, the Administration is trying to mainstream these policy prescriptions here at home.

This past August, the President laid out a plan for accelerating our transition to a clean energy economy based upon a new goal to increase the share of renewables in the U.S. electricity generation mix to 20 percent by 2030.

But more needs to be done domestically and abroad.

So we will continue to advocate for programs and policies that support and prioritize clean energy development.

We will:

• Encourage countries to integrate clean energy as a key part of their own national development strategies and develop good policies to enable clean energy environments. Currently, there are renewable energy support policies found in 145 countries. However, the majority of these policies focus on growth in specific sectors – power, heating and cooling, and transportation. Only a handful of countries have set economy-wide targets for renewable energy deployment.
• Encourage international finance and development institutions and agencies to increase their portfolios of clean energy and renewables; and
• Encourage and support innovative industry-driven solutions to provide clean energy technologies.

Conclusion

It’s encouraging to see the global market for clean energy technology and distribution moving forward. But we can do more to accelerate the growth of the market so that we will be able to meet the world’s growing energy demand and not overheat the earth. Setting the right policy foundation can provide clarity to investors, and allow the global clean energy market to exponentially accelerate.

This will require all of us working together. And I hope you will join me in making this a reality.

Thank you.