Finance is a central issue in the transition to a green electrostate. Fuel-based technologies depend on fuel prices. Renewable energy sources instead depend on financing costs at the time of construction.
High financing costs are far worse for renewable energy than for fossil energy or biomass combustion. Low financing costs give cheap electricity, which makes electrification and sector coupling attractive.
A central challenge of the transition is therefore to make cheap finance available to producers, transmitters, storers and consumers of electricity, as well as to technology developers.
The state has the cheapest source of finance in the economy and should therefore become a more central instrument for ensuring a cost-effective transition.
Cheaper finance means cheaper electricity, which is crucial for rapid electrification and for a green electrostate to become a model of prosperity. This applies to both private and public finance.
The state has the cheapest source of finance and should therefore be activated to a greater extent to invest in the transition. This includes more risk-willing and cheaper lending from the state’s investment bank.
More patient and risk-willing capital is needed for new companies that can deliver new solutions for the transition. Denmark’s financial system has specialised in providing growth capital to start-ups in digital solutions and biotech, while green technologies play a much smaller role.
