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Liam Denning

Green Stimulus Is Here Already. It Just Wasn’t Planned

Cheap capital is flooding to cleantech and could use some government guidance to avoid nasty blowups. 

Cheaper than ever, thanks to cheap capital.

Cheaper than ever, thanks to cheap capital.

Photographer: Kevin Frayer/Getty Images AsiaPac

We have to wait a few weeks to see just how green President Joe Biden’s stimulus plan turns out to be. But we’re already in the middle of an unplanned green investment boom. It will end both badly and usefully.

Energy of all varieties is a capital-intensive business, so the cost of that capital often makes or breaks a new project. This is especially so for renewable-energy projects where all the investment is up front and, unlike an oilfield for example, there is no option embedded in terms of volatile commodity prices. Similarly, the more cutting-edge technologies, such as vehicle electrification, are often at start-up stage or otherwise unprofitable, so access to capital is an existential issue.