The State of New York jump started the deployment of renewable energy, green businesses and jobs this month with a $210 million investment.
Governor Andrew M. Cuomo announced the funding this month for the creation of the New York Green Bank to encourage power projects that use clean energy instead of fossil fuels. Ever since Cuomo announced plans for the green business loan hub in January, the state has been lauded as a leader in sustainability. It’s the kind of initiative the The Center for American Progress argued for four years ago.
“With this funding we will attract greater investment in New York, accelerate clean energy deployment, and modernize our grid,” Governor Cuomo said in a statement. “Working hand-in-hand with the private sector, the New York Green Bank will also promote job growth, improve air quality, and provide New Yorkers with greater choice and value for their money.”
The Green Bank will open in early 2014. The initial funding comes from $165 million in energy bills approved by the New York Public Service Commission (PSC) and $45 million from the Regional Greenhouse Gas Initiative (RGGI). Cuomo said future funding would come from these sources with hopes of reaching $1 billion.
“Governor Cuomo’s launch of a Green Bank places New York among the first few states in the country to pioneer a market-based approach to tackling climate change,” Environmental Defense Fund President Fred Krupp said. “The move will encourage much-needed private sector investment in renewable energy and energy efficiency, create jobs, and ensure a more resilient and sustainable energy infrastructure.”
The Green Bank will encourage additional funding from capital investors, but has not identified any. The bank has established three criteria for investment:
- Transactions will have expected financial returns such that the revenues of the Green Bank on a portfolio basis will be in excess of expected portfolio losses.
- Transactions will be expected to contribute to financial market transformation in terms of scale, improved private sector participation, level of awareness and confidence in clean energy investments, and/or other aspects of market transformation.
- Transactions will have the potential for energy savings and/or clean energy generation that will contribute to greenhouse gas reductions in support of New York’s clean energy policies.
“New York’s Green Bank will target existing market barriers which currently prevent the widespread deployment of clean energy,” said Richard Kauffman, New York’s chairman of energy and finance. “Given these obstacles in financing, merely setting up a competitive market that offers the promise of choice offers only that: a promise unrealized if projects cannot obtain financing.
“The Green Bank is just one component of the state’s new chapter on energy policy that focuses on enabling self-sustaining private markets and reducing dependence on subsidies.”