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Financing the energy transition: Strategic cost modeling for clean tech deployment
1 Master of Business Administration, Imperial College Business School, UK.
2 Division of PHT, CITH Srinagar, Jammu and Kashmir, India.
Review
International Journal of Science and Research Archive, 2023, 08(02), 832-850.
Article DOI: 10.30574/ijsra.2023.8.2.0160
Publication history:
Received on 13 January 2023; revised on 24 April 2023; accepted on 29 April 2023
Abstract:
As global economies accelerate toward net-zero carbon goals, the financing of clean technology (clean tech) deployment has become a critical priority. Yet, energy transition projects often face challenges of capital intensity, long payback horizons, and market uncertainty—particularly in emerging economies and decentralized energy systems. Strategic cost modeling provides a foundational tool for addressing these barriers by quantifying lifecycle costs, de-risking investments, and guiding capital allocation in alignment with environmental and economic objectives. This study presents a comprehensive approach to cost modeling tailored for clean tech financing, focusing on solar PV, wind, green hydrogen, battery storage, and grid modernization initiatives. It integrates techno-economic analysis with risk-adjusted financial modeling, incorporating dynamic inputs such as regulatory volatility, carbon pricing, technology learning curves, and supply chain bottlenecks. The paper also evaluates funding structures including blended finance, green bonds, and public-private partnerships (PPPs), highlighting how cost models inform structuring choices. Case studies from North America, Sub-Saharan Africa, and Southeast Asia illustrate how well-calibrated models support investment-grade project profiles, attract concessional and institutional capital, and align with climate finance frameworks. The role of digital tools—such as AI-driven scenario simulators and geospatial LCOE calculators—is explored for improving precision and investor transparency. Ultimately, the paper argues for a paradigm shift in energy finance where strategic cost modeling is not an afterthought but a core enabler of accelerated, equitable, and bankable clean tech deployment. This integration is vital for unlocking the trillions in climate-aligned capital needed to meet the ambitions of the global energy transition.
Keywords:
Energy Transition Finance; Clean Tech Deployment; Strategic Cost Modeling; Climate-Aligned Capital; Blended Finance; Green Infrastructure
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Copyright © 2023 Author(s) retain the copyright of this article. This article is published under the terms of the Creative Commons Attribution Liscense 4.0
