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WWF launches web-calculator to analyze benefits of investing in renewable energy

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By Lars Erik Mangset and Stefano Esposito

What will be the associated climate benefits if $100 billion were invested directly into renewable energy infrastructure? WWF has just published a report and a web-calculator that enables everyone to find out how much renewable energy capacity can be installed given a certain amount of money, as well as the associated greenhouse gas emissions that would be averted if renewable energy were to replace coal, oil and gas.

The web-calculator termed “ReCalc: Renewable Energy Calculator” (http://recalc.wwf.no/) is specifically designed to show the potential climate benefits of an increase in investors’ direct investments to renewable energy.

Why has WWF developed this web-calculator?

Increasingly more financial institutions are interested in investing in the growing renewable energy market, as a way to seize the opportunities arising in this sector and place themselves in a better position for the future’s energy system. The main purpose of ReCalc is to provide a simple model which can illustrate the potential climate benefit – in terms of theoretical renewable energy capacity installed and averted emissions – which can derive if an investor, or a group of investors, channel more funding into renewable energy. By releasing ReCalc, WWF hopes to support interested parties and individuals to increase their understanding of the magnitude of these climate benefits, supported by providing easy-to-use communication products and key numbers. By design, ReCalc is suitable to conduct case studies of individual or a group of investors. The underlying modelling approach of the model is based on data from the IPCC and the IEA only.

What are the main results of the calculator?

ReCalc enables any given user to calculate how much renewable electricity generation capacity can be installed by a given investment amount. Through its modelling approach, ReCalc estimates the annual and lifelong electricity production, as well as the theoretical GHG emissions that can be averted assuming that the renewable energy replaces an equal amount of fossil fuel energy.

How can I use the calculator?

To run ReCalc, as a minimum the user only needs to provide the following data inputs:

  • The total market value/capital holdings of the investor/investors, i.e. what is the total investable amount?
  • The percentage share of the total capital holdings that can be invested directly into renewable energy.
  • The year the investor will start its investment and the year in which it reaches the target percentage allocation.

For the more advanced users, it is also possible to adjust the underlying parameters in the calculator, such as the capital costs figures, operational parameters, the distribution of investments over different technologies, and more. You can refer to the methodology section of the calculator for more details.

The tool can be used by those who work with investors, journalists, and common people. In order to showcase how ReCalc can be used, we would like to present three case studies that WWF-Norway has developed.

#1 Case study: What if the Norwegian Pension Fund Global invests 5% of its assets.

Norway’s sovereign wealth fund is world’s largest, with over 900 billion dollar in assets. If it would start to invest 5 percent of its market value in renewable energy and reach the target in 5 years (by 2020), this would fund 21 000 MW of installed capacity, equivalent to Belgium’s total installed capacity, or ca. 6 500 wind turbines. The plants would generate on average 55 TWh of electricity per year in the period 2016-2069, when the last plants (hydro) would reach end-life. This could power ca. 9 million of average European citizens every year. If we were to generate the amount of electricity generated over the whole period with fossil fuels, we would have emitted additional 1900 Mt CO2 equivalent, which is equivalent to stop the aviation sector for almost 3 years.

Figure 1

Figure 1 – Annual and cumulative new installed electrical capacity (MW) resulting from GPFG investing 5 percent in renewable energy production (with 2016-2020 being the investment period).

#2 Case study: What if all UNPRI’s signatories invest 5% of their assets.

Over 1300 institutions, holding more than 45 trillion dollar, have signed the UN Principles for Responsible Investments. If these funds would start to invest 5 percent of its market value in renewable energy and reach the target in 5 years (by 2020), this would fund 850 000 MW of installed capacity, equivalent to ca. 80% of USA’s total installed capacity, or ca. 280 000 wind turbines. The plants would generate on average 2 200 TWh of electricity per year in the period 2016-2069, when the last plants (hydro) would reach end-life. This could power ca. 380 million of average European citizens every year. If we were to generate the amount of electricity generated over the whole period with fossil fuels, we would have emitted additional 77 000 Mt CO2 equivalent, which is equivalent to almost two times world’s annual GHG emissions.

Figure 2

Figure 2 – The green bars represent the annual electricity generation (TWh) resulting from all UNPRI’s signatories investing 5 percent in renewable energy production (with 2016-2020 being the investment period, and the plants producing electricity until their end of life). The orange line shows EU-28’s total power generation (3260 TWh) in 2012 for matters of comparison.

#3 Case study: What if all signatories of CERES’ INCR invest 5% of their assets.

Over 100 institutions, holding more than 13 trillion dollars, have signed the Investor Network on Climate Risk (INCR), launched by CERES. If these funds would start to invest 5 percent of its market value in renewable energy and reach the target in 5 years (by 2020), this would fund 850 000 MW of installed capacity, equivalent to ca. 80% of USA’s total installed capacity, or ca. 280 000 wind turbines. The plants would generate on average 650 TWh of electricity per year in the period 2016-2069, when the last plants (hydro) would reach end-life. This could power ca. 380 million of average European citizens every year. If we were to generate the amount of electricity generated over the whole period with fossil fuels, we would have emitted additional 22 000 Mt CO2 equivalent, which is equivalent to almost two times China’s annual GHG emissions.

Figure 3

Figure 3 – Averted GHG emissions from INCR-CERES, compared with other sources (in million tonnes) (IEA 2014).

Lars Erik Mangset and Stefano Esposito are Sustainable Finance Advisors at WWF-Norway.

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WWF’s launched a web-calculator to analyze the benefits of investing in renewable energy: http://bit.ly/1HHypY9

What would the climate benefits of investing directly into renewable energy be? This new calculator can tell: http://bit.ly/1HHypY9

This new calculator can work out how much renewable energy you can get with your money: http://bit.ly/1HHypY9

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