Financing the Energy System of Tomorrow

Thursday, February 16, 2017 3:22 pm EST



Kirk Edelman, Global CEO, Energy Finance, Siemens Financial Services

At Siemens, we “make real what matters”— which means that we strive to make a real impact on people and society across industries from energy to healthcare to transportation to manufacturing.

Part of making real what matters involves financing projects that matter. Now, more than ever, financing is becoming critical in transforming opportunities into reality, even as the traditional role of financing is changing:

  • With an uncertain market environment and thin economics, there is a greater need to invest in new technologies.
  • These technologies are evolving at unprecedented speed, requiring ongoing investment for companies that want to stay up to date.

As a result, new business models that integrate financing and technology are needed to develop sustainable energy and infrastructure projects, while remaining attractive for investors.

Take the Bayonne Energy Center (BEC) in New Jersey, for example. An equity bridge loan from Siemens during the construction in 2010, and subsequent loans since, proved vital for the project’s construction, which included aero-derivative gas turbines. This turbine technology allows BEC to transmit electricity to New York City in less than ten minutes.

As a way to demonstrate how financial solutions empower customers, like BEC, to achieve goals and create value for society, Siemens developed “Finance Week” – a series of five events in the US, Singapore, Germany, the UK, and India.

As part of Finance Week, Siemens Financial Services (SFS) teamed up with the Massachusetts Institute of Technology Energy Initiative (MITEI) for an event called "Financing the Energy System of Tomorrow.”

The event provided an in-depth look at MITEI’s study, Utility of the Future, which explores how the power generation and distribution sector will look in the future and offers a blueprint for navigating it.

Experts with diverse experience and viewpoints – from technological, electrical, legal, and economic – discussed how financing will play a key role in advancing the power sector and the global energy system as a whole.

In short, action is needed now. Social and economic changes intensify our need for significant energy and infrastructure investment around the globe. As progress is made on the study’s recommendations, we must embrace competitive and innovative financing solutions to keep up.

Watch a recap of the event here: