Green Economy in a Blue World-Full Report

Public finance mechanisms across stages of technological development

Stage 1 R&D

Stage 2 Demonstration

Stage 3 Deployment

Stage 4 Diffusion

Stage 5 Commercial maturity

Guarantees and insurance products/ risk mitigation instruments

Public/private VC funds

Soft loans

Mezzanine debt

R&D support

Grants

Carbon

Loan facilities

Public/private equity funds

Incubators

in a Blue World

Credit lines

Project development assistance

Of greatest interest to institutional investors

PFMs to engage institutional investors

Other PFMs

Source: UNEP SEFI (2009)

substitute investment (UNEP, 2011) as illustrated in the figure above. As the figure above shows, in the later stages of technological development private funding plays a crucial, dominant role compared to public funding for technological advancement. A case can be made for the offshore wind-energy example in Europe. Here, Vestas and Siemens have been the main suppliers to the offshore wind market, with Vestas installing 555 MW and Siemens 278 MW in 2010. In terms of utilities active in the offshore wind market, Vattenfall and E.On installedmost newoffshore capacity in 2010, 308 MW and 305 MW respectively (GWEC, 2011). Once developed on a commercial scale, marine-based renewable energy technologies, particularly in developing countries, could also benefit frommultilateral financing systems such

as the Clean Development Mechanism. There are signs that this shift is starting to occur. As of September 2011, in the UNFCCC database, there is one offshore wind project (Shanghai Dong Hai Bridge Offshore Wind Farm, China), one tidal energy project registered (Sihwa Tidal Power Plant, South Korea), but no wave-energy initiatives. Lack of sufficient infrastructure could be a significant barrier to later mass deployment of marine-based renewable energy technologies (IPCC, 2011). This is linked not only to support infrastructure in terms of construction-vessels and equipment, but also to the transmission of energy and integration of marine energy into wider energy networks. Similar to other renewable energy technologies, energy systems 3.4 Supply chain and energy infrastructure

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