New innovations in old financial tools help utilities shut down high-loss coal-fired power plants, reduce carbon dioxide emissions, and often reduce consumer costs.
Coal plants are not only the heaviest pollutants, Expensive to run..coal Provides about 20% of US electricityMost of these plants lost last year, down from more than half of 2008. Payers often cover the difference so that utilities investors can benefit.
This strategy, promoted by environmental groups, uses securitization to fund plant closures. Over the past year, three utilities have pledged more than $ 1 billion in securitization to help decommission coal-fired power plants.
Securitization is one of Wall Street’s many efforts to reduce greenhouse gas emissions while making a profit. Green bonds and investment funds, which have environmental goals as part of their mission, are collecting cash. Wall Street has helped raise billions of dollars for electric vehicles, batteries, and alternative energy companies.
Utilities have used securitization for decades to cover temporary costs and help repay so-called stranded assets. The facility will be closed before you pay for it. Utilities are increasingly seeing unprofitable coal-fired power plants as potential stranded assets, and some see them as a way to eliminate securitization earlier than planned.
Utilities pay for the closure of coal-fired power plants by issuing bonds
Source link Utilities pay for the closure of coal-fired power plants by issuing bonds