26 January 2021, Zurich, Switzerland – Today, South Pole in partnership with Positive.Capital Partners joins several global philanthropies and international financial institutions to launch a transformative platform that creates a global market for distributed renewable energy (DRE). The coalition behind this platform, the D-REC Initiative, is led by South Pole and Positive.Capital Partners and is supported by the Shell Foundation, Good Energies Foundation, EnAccess Foundation, Signify Foundation, and the UK's Foreign, Commonwealth and Development Office (FCDO).
With around 840 million people still without access to electricity and over US$500 billion required annually until 2040 to meet growing electricity demand, the mission of the D-REC Initiative is to channel climate finance from the private sector, to address this critical gap. By connecting corporate finance and sustainability ambition with small-scale distributed renewable energy projects, the D-REC platform provides the means to accelerate new investment and results-based climate finance in distributed renewable energy globally.
“We are excited to connect environmental markets with distributed renewable energy projects that can have the biggest possible impact on our global climate and communities," says Patrick Burgi, Director Innovation and co-founder at South Pole. “With the D-REC platform, we're putting this transformational power in the hands of companies that want to push their renewable energy engagement to the next level. This is an opportunity to empower the private sector to bring us closer to achieving SDG7 and sustainable energy for all."
“The private sector has been leading the energy transition in developed markets, driving the deployment of clean energy through investment and clean energy procurement activities. The D-REC Initiative now provides global corporations and climate investors new tools to extend and accelerate the energy transition in emerging markets, delivering clean energy where it's needed most", says Paul Needham, Managing Director at Positive.Capital Partners.
To date, over 280 companies have committed to 100% renewable energy as part of the RE100. Many of them have global footprints that extend into emerging markets, where sourcing renewable energy is often a challenge.
Companies using the new D-REC platform will be able to go above and beyond their corporate renewable energy goals or RE100 commitments. By purchasing third-party certified D-RECs, companies can extend their renewable energy engagement to emerging economies. In practice, their purchase of D-RECs helps mobilize new sources of capital that expedite the deployment of distributed renewable energy projects – bringing energy access to communities living off the grid in rural areas.
Renewable Energy Certificates (RECs) are already widely used by corporate buyers of renewable energy to make third party-verifiable claims about the source of their electricity. D-RECs operate in a similar manner, with three key differences: D-RECs will apply to distributed, small scale and off-grid renewables, be available in markets and technologies where environmental attributes are not yet applicable and, importantly, they will capture the associated social and environmental benefits of renewable energy.
The first, limited issuance of D-RECs is expected to be available to interested companies in Q4 2021.
“Shell Foundation believes that market instruments such as D-RECs can be catalytic in driving new, untapped forms of climate finance towards bridging the energy access funding gap, increasing adoption and financing for renewables," says Ashish Kumar, Portfolio Innovation Manager at Shell Foundation.
“As the world works towards achieving carbon neutrality, we believe such a commitment should be made possible for all communities - universal access to sustainable energy sources is a fundamental element of the inclusive ambition of both the D-REC's initiative and Signify Foundation. For communities underserved by the grid, access to sustainable capital will improve lives at a local level while accelerating efforts globally to address climate change," says Harry Verhaar, Chair of the Board at Signify Foundation.
“The D-REC Initiative is a unique opportunity to connect the Energy Access sector and its practitioners to the global renewable energy markets. The breadth of the concept and its potential made it clear from the beginning that it matched well with the spirit and purpose of Open Source Innovation which EnAccess supports. Since our first encounter with D-REC, we shared a vision of multiple implementing companies and players, based on a transparent and open standard formed - we are glad to see that vision is now materialising thanks to all the partners involved," says Fabio De Pascale, Board Chairperson at EnAccess.
“As investors increasingly shift to climate-positive businesses, renewable energy is an attractive target, but small-scale, distributed systems are often neglected by funding streams. The D-REC Initiative will help ensure that renewables funding benefits people who currently lack access to reliable electricity, are least responsible for climate change, and are most vulnerable to its impacts," says Stephanie Jones, Programme Manager, Clean Energy, at Good Energies Foundation.
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Isabel Hagbrink, Director of Global Communications, South Pole
South Pole: South Pole is a leading project developer and provider of global climate solutions, with over 400 experts in 18 offices worldwide. South Pole's expertise covers project finance, data collection, and climate risk analysis, as well as the development of environmental commodities. South Pole has mobilized climate finance to over 700 projects that reduce greenhouse gas emissions in areas such as renewable energy, energy efficiency and sustainable land use. For more information, visit www.southpole.com or follow South Pole on LinkedIn, Twitter, and Facebook.
Positive.Capital Partners builds scalable solutions to address the climate crisis. The team is guided by its belief in the transformative power of bold vision and practical action. Positive.Capital works with leading global corporations, high-impact entrepreneurs, development organizations, climate finance and impact investors to analyze opportunities and create market solutions for the low-carbon economy. For more information, visit www.positive.capital or follow on LinkedIn
Shell Foundation (SF) is an independent UK-registered charity, founded by Shell in 2000, that creates and scales business solutions to enhance access to energy and sustainable mobility. The foundation exists to serve the low-income communities most affected by these issues. For more information, visit www.shellfoundation.org or follow SF on LinkedIn or Twitter.
The Signify Foundation is a Netherlands-based not-for-profit organization committed to enabling access to the benefits of sustainable lighting solutions to underserved communities. The Signify Foundation is primarily funded by Signify, the world leader in lighting.
Good Energies Foundation works to prevent climate change and mitigate its harm, especially to people who live in poverty. Focusing on two levers for reversing climate change – clean energy and forest protection – we invest in early-stage market solutions and provide risk-tolerant funding to innovative approaches.
EnAccess funds open source solutions for energy access. They work with projects that address either challenges or high potential opportunities that are shared across the energy access industry, with partners who have proven that their ideas have a demonstrated market need and/or appetite. The "building blocks" that EnAccess publishes are free, easily accessible, and have helped the energy access sector save valuable time, money, and resources. To learn more, visit enaccess.org and follow EnAccess on LinkedIn and Twitter.
Foreign, Commonwealth and Development Office (FCDO): The FCDO brings together the best of Britain's international effort and demonstrates the UK acting as a force for good in the world. To learn more, visit the FCDO website.