Hey EkoFriend,

This week, we're covering a turbulent week on SSS, the scoop on tax credit transfer deals, the sources of electricity for each EU country, and why it’s the golden era for renewables in Europe.

🌱 Tax Credits

🌍 SSS

💰 Renewable’s Golden Era

💡 Europe’s Electricity

🏆 EkoHero

Finish June packed with eko-insights 🚀

Transferable Tax Credits on the Rise! 🌱

ClimateDoor team joined Heatmap Labs and Crux CEO, Alfred Johnson, to learn findings from Crux's new report on clean energy tax credit transferability risk mitigation.

The market for transferable tax credits is on fire! 🔥 

Thanks to the Inflation Reduction Act and fresh Treasury guidance, 2023 saw a whopping $7-9 billion in transfer activity. And guess what? We’re on track to hit $100 billion annually by 2030! 💰

What’s Trending? Let’s Dive In:

1. 🌞 Diverse Tech: Beyond wind and solar, we’re seeing action in standalone storage, bioenergy, advanced manufacturing, and microgrids. The market’s getting more colorful and complex! 🎨

2. ⏱ Speedy Transactions: Deals are closing faster than ever! 🚀 With the right prep, transactions can wrap up in just 3-4 weeks, a far cry from the old 6-9 months. Standardized processes are the magic sauce! ✨

3. 🛡 Risk Management & Due Diligence: Nearly 40% of delays are due to due diligence hiccups. Key risks? Credit valuation, recapture, and eligibility. Pro tip: Get insured! 🛡 About 74.2% of ITC deals now have third-party insurance.

4. 🌍 Broadening the Buyer Base: To keep up with the growth, we need more buyers from all walks of life, not just the usual suspects in the energy sector. The more, the merrier! 🎉

5. 📜 Policy & Regulation: Treasury guidance and potential tax policy tweaks will keep us on our toes. Stay tuned! 📡

In a nutshell, the transferable tax credit market is buzzing with opportunities. 🐝 Mastering its complexities with top-notch due diligence and risk management will help you cash in on this green gold rush! 🌿💸

Sustainability Sentiment Score (SSS)

The SSS has seen a turbulent week. Earlier this week, the Growth Climate market saw notable fluctuations - popping up on Monday the 24th only to plumet back down on Tuesday the 25th. This much movement was not seen in our other indices. 

As the week moves forward, investors are keenly awaiting the release of May’s personal consumption expenditure data, the Federal Reserve’s preferred inflation gauge, set for Friday. This data will provide crucial insights into inflation trends, influencing market movements and economic forecasts.

Meanwhile, in Europe, carbon prices plummeted to a two-month low amid aggressive selling. European carbon allowances declined as natural gas prices dropped post-options expiry.

Investment funds have been reducing their positions for the fourth consecutive week, contributing to the decline. Additionally, the UK Allowance prices fell after the auction cleared at a discount for the first time in two months. These movements reflect the broader market's reaction to economic data and shifting investment strategies moving into the summer months. 

🚀 2024: The Golden Era for Europe’s Renewable Energy 🌱

🌍 Europe’s renewable energy market is booming in 2024! The year kicked off with significant growth in renewable power purchase agreements (PPAs) and major mergers and acquisitions (M&A) in the energy sector.

Here’s a snapshot of why 2024 is being dubbed the ‘Golden Era’ for Europe’s green energy:

🌟 High-Value Deals & Market Growth:

• Record-Breaking PPAs: In the first five months of 2024, corporate buyers secured 21 TWh/year of green electricity from 10 GW of new projects, similar to the dynamic pace of 2023. The number of deals surged to 145, up from 94 in the same period last year.

• Major M&As: Big deals include US-based Energy Capital Partners acquiring British renewable energy firm Atlantica Sustainable Infrastructure for €7.25 billion and Brookfield Asset Management proposing to acquire a majority stake in Neoen SA.

📉 Price Trends & Regional Challenges:

• Price Drops: Lower electricity spot and forward prices have influenced deal prices. Iberian capture prices hit record lows, and Germany saw a significant drop in solar capture prices, although forward contracts are rebounding.

• Grid & Regulatory Hurdles: Spain, Italy, and Germany face challenges like volatile market conditions, high interest rates, and insufficient grid capacity. Permitting delays and restrictive auction systems also complicate the market in Italy.

🔋 New Opportunities & Sectoral Shifts:

• Diverse Buyers: Tech companies lead in buying PPAs, but consumer goods, industrial, chemicals, and utility sectors are also emerging as significant offtakers.

• AI and Data Centers: The rise of AI computing power is driving demand, especially in the Nordics and Iberia. Spain is becoming a key hub for data centers due to favorable conditions like low prices and renewables access.

📈 Future Outlook:

• Broader Access: The reform of the EU’s electricity market aims to make PPAs more financeable with government support.

• Continued Growth: Market analysts project that falling deployment costs will keep driving the trend, with renewable technology costs dropping by around 20% for every doubling of deployment.

2024 is shaping up to be a pivotal year for Europe’s green power deals, echoing the renewable energy boom in the U.S. despite regional challenges. 🌿

Mapped: Europe’s Biggest Sources of Electricity by Country 💡

EkoHero🏆

🌿 From Forest Fires to Bamboo Forests: Arief Rabik's Environmental Journey

"I remember being in Riau, Sumatra, during the large forest fires in the 1990s, witnessing the impacts of deforestation. The landscape was hot and barren. It was a galvanizing moment,” said Arief Rabik to Climate Breakthrough, reflecting on his inspiration.

🌱 Following a Legacy

Inspired by his mother, Linda Garland, a bamboo industry pioneer, Arief has over two decades of experience in bamboo forest management.

💡 Breakthrough Idea

Arief’s vision is to restore degraded lands in Indonesia with bamboo agroforestry, creating markets for bamboo to replace high-carbon materials in various industries.

🏆 Climate Breakthrough Award

As director of Indonesia’s Environmental Bamboo Foundation, he initiated the 1000 Bamboo Villages project. In 2019, he received a Climate Breakthrough Award to support this climate action.

🌍 Bamboo Village Trust

In 2023, Arief launched the Bamboo Village Trust to attract contributions for bamboo villages, creating a network of bamboo ambassadors to develop social forestry assets.

🤝 Global Partnerships

Partnering with the UN Decade on Ecosystem Restoration, Arief aims to establish 200 bamboo villages across the equatorial belt by 2029, including 100 in Indonesia.

Arief Rabik’s journey from witnessing deforestation to leading a bamboo restoration movement showcases his dedication to sustainable development and environmental restoration. 🌏💚

THOUGHTS ON TODAY’S ISSUE?

🌿 Closing Ekonews June…

Don’t forget, Eko is here to keep you informed with the latest climate updates and support your sustainability journey!

Stay eko-powered until next Thursday… 🌱💚

– Eko