New Clean Tech: Technology’s role in sustainable transition

Funding for clean technologies or New Clean Technology is key to facilitating the energy transition. Institutions such as BBVA participate through Project Finance to contribute to the development of renewable energy assets thanks to the development of these technologies. Therefore, from BBVA CIB, we provide a brief analysis by our expert Jaime Artola, Global Head of Structured Finance.

In the last month, there have been over 3.6M public mentions related to clean technology funding or New Clean Technology. In our latest LinkedIn Trending Data newsletter, we have cross-referenced this data with more than 800K mentions linked to #Batteries and more than 1.5M to #CleanTech, #EnergyEfficiency, #PowerStorage, and #Hydrogen to bring you a brief analysis on why technology, renewables or new energy sources are key to achieving the decarbonization goals set for 2050.

As indicated in the Energy Technology Perspectives report (ETP-2023), the clean energy transition presents significant opportunities, with a potential global market for key technologies valued at up to $650 billion per year by 2030, tripling current levels.

What was once considered a niche market is now becoming a large-scale global industry. New Clean Technology, Green Tech, Energy Tech and the set of technologies that contribute to the development of renewable energies and new energy sources are key to achieving the decarbonization targets set for 2050. To achieve these goals, new technologies will play an important role, generating enormous opportunities for those who are willing to finance these projects. The development of these technologies is still slow, and much of it depends on subsidies and public funding.

In the words of an expert

Commitment, funding and innovation to advance sustainability

By Jaime Artola, Global Head of Structured Finance

Clean technology, also known as cleantech, encompasses a variety of practices with a common goal: reduce environmental impact and promote sustainability. As early as 2019, BBVA recognized the importance of sustainability and placed it as a key pillar of its strategy. Since then, the entity has become one of the most active players in the Project Finance sector, financing Utilities, Developers and Financial Backers to help build and operate renewable energy assets.

One of the consequences of this funding has been to reduce the LCOE (levelized cost of electricity) of traditional renewable energy technologies, such as solar photovoltaic and onshore wind, making them more economical than traditional, fossil fuel-based technologies. 

However, the funding of these projects is not enough to achieve the decarbonization targets. This is due to, among other things, sectors that are difficult to decarbonize, which cannot reach the net-zero emission target with only cheap renewable energy, and the necessity of achieving a complete electrification of the economy. However, this funding will unlock the potential to develop new technologies that contribute to achieving these goals.

Funding will unlock the potential to develop new technologies that contribute to achieving these goals.

To address these challenges, BBVA focuses especially on several categories of emerging technologies, which are central to the upcoming decarbonization process:

• Electrification, with the transition to electric vehicles and power generation technologies and storage systems to increase the presence of renewable energies in the electricity sector.
• The development of green molecules, such as hydrogen and SAF fuels, targeting sectors that cannot be easily electrified.
• The reduction of emissions through energy efficiency solutions.
• The removal of CO2 from the atmosphere that could not be avoided by the previous three steps.

For these technologies to be reliable and competitive, they need to be scaled up, as the costs of any technology can multiply as adoption grows. Therefore, demand and the capital needed to finance this process are key. The solution lies in the scalability of these technologies.

In this context, BBVA CIB wants to lead this process. The compound annual growth of these technologies until 2023 has been exponential, ranging between 19% and 105%, and their investment needed to scale them is estimated at about 2.4 trillion Euros. To capitalize on this opportunity, we have built specialized teams and capabilities to accompany our clients in the transition to a sustainable future. In addition, we have developed a sustainability equity investment program and invest in the best venture capital and private equity funds specialized in new clean technologies. This allows us to learn from the most innovative companies and projects worldwide, while contributing to the mobilization of capital toward these essential technologies, as well as contributing to the achievement of our own 2030 net-zero emissions targets.

The transition to sustainability is a race against time, but with the right collaboration, innovation and funding, we can transform challenges into opportunities and lead the way to a more prosperous future for all.