[1] Protecting our planet requires unprecedented large-scale investments in technical innovations and renewable energies to bring our economies on a path towards net zero greenhouse gas emissions. As our experience over the past two decades demonstrates, the relatively large upfront costs incurred in these capital-intensive expenditures are particularly susceptible to changes in the cost of credit.
Low and declining interest rates have measurably contributed to the fall in the “levelised cost of electricity”, or LCOE, of renewable energies. [2] As a result, the cost of electricity from renewable sources is now comparable to, or lower than, that of conventional power plants. [3] These developments now risk being reversed by the marked rise in global interest rates over the past year.