Special Issue "Sustainable Finance in Energy Sectors"

A special issue of Energies (ISSN 1996-1073). This special issue belongs to the section "I: Energy Economics and Policy".

Deadline for manuscript submissions: 31 December 2021.

Special Issue Editor

Prof. Dr. Beata Zofia Filipiak
E-Mail Website
Guest Editor
Faculty of Economics and Management, Departament of Sustainable Finance and Capital Markets, Uniwersytet Szczecinski, 70-453 Szczecin, Poland
Interests: sustainable finances; use of financial instruments ("green financial instruments") in creating sustainable development; ESG risk; financial strategies and their connection with business models; policy of public authorities towards sustainable development (instruments, decisions, effects)

Special Issue Information

Dear Colleagues,

The Guest Editor is inviting submissions to a Special Issue of Energies on the subject area of “Sustainable Finance towards Sustainable Energy Sectors and Systems.”

In recent years, energy policy has become an area of active state policy, but many of its aspects are also at the centre of attention of financial institutions, economic entities, and society. The reasons for this are both qualitatively new phenomena occurring in the international economic environment and the EU energy policy. Therefore, we are dealing with the impact of public institutions, creating incentives and influencing positive behavior related to the use, creation, and investment in renewable energy sources. Changing behavior and attitudes under the influence of public institutions' actions for sustainable energy concerns both individuals (society's behavior) and business attitudes. The very face of the energy sector is also changing.

Every change, every investment decision or modernization requires capital. Acquiring external financing for the indicated purposes is of key importance for the development of this sector. Long periods of return on investment, as well as the still significant uncertainty of business and legal conditions for running a business, make supporting this industry a key factor in its development. Making rational energy investment decisions is a complex task, whether they are for renewable energy systems (RES) or energy efficiency (EE).

Therefore, a broadly understood discussion on financial support for the development of the energy sector, the effectiveness of the solutions and instruments used, and the effects of changes in financial terms becomes necessary.

There are also various ways to integrate the concept of green energy into other research areas and directions - from simply combining the impact of green energy in other areas, through more advanced proposals, institutional support and the role of financial institutions in financing renewable energy, to connections that take into account the network dimension of relations between connected areas.

The Special Issue aims to highlight the challenges of green financing and investment in renewable energy projects and to provide practical solutions for filling the green financing gap. This Special Issue is therefore focused on how the concepts, instruments, and tools of sustainable finance have been utilized in various contexts to enable a transition to sustainable energy systems, with an emphasis on the efficiency and higher efficiency of sustainable energy sectors.

Prof. Dr. Beata Zofia Filipiak
Guest Editor

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All papers will be peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Energies is an international peer-reviewed open access semimonthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 2000 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • Sustainable finance
  • Green growth for energy (financial factors)
  • Environmental (green) taxes
  • Financial market
  • Energy finance
  • Sustainable financial products and services
  • ESG risk and negative externalities
  • Sustainable business models
  • Green products and instruments for energy
  • Efficiency and optymalisation
  • Public policies

Published Papers (9 papers)

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Research

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Article
Climate Risk with Particular Emphasis on the Relationship with Credit-Risk Assessment: What We Learn from Poland
Energies 2021, 14(23), 8070; https://doi.org/10.3390/en14238070 (registering DOI) - 02 Dec 2021
Viewed by 127
Abstract
This research seeks to identify non-financial enterprises exposed to the climate risk relating to transition risks and at the same time use of bank loans, as well as to conduct stress tests to take account of the financial risk related to climate change. [...] Read more.
This research seeks to identify non-financial enterprises exposed to the climate risk relating to transition risks and at the same time use of bank loans, as well as to conduct stress tests to take account of the financial risk related to climate change. The workflow through which to determine the ability of the banking sector to assess the potential impact of climate risk entails parts based around economic sector and company level. The procedure based on the sectoral level identifies vulnerable economic sectors (in the Sectoral Module), while the procedure based on company level (the Company Module) refers to scenarios presented in stress tests to estimate the probability of default under stressful conditions related to the introduction of a direct carbon tax. The introduction of the average direct carbon tax (EUR 75/tCO2) in fact results in increased expenditure and reduced sales revenues among enterprises from sectors with a high CO2 impact, with the result being a decrease in the profitability of enterprises, along with a simultaneously higher level of debt; an increase in the probability of default (PD) from 3.6%, at the end of 2020 in the baseline macroeconomic scenario, to between 6.31% and 10.12%; and increased commercial bank capital requirements. Financial institutions should thus use PD under stressful conditions relating to climate risk as suggestions to downgrade under the expert module. Full article
(This article belongs to the Special Issue Sustainable Finance in Energy Sectors)
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Article
Spread Analysis of the Sustainability-Linked Bonds Tied to an Issuer’s Greenhouse Gases Emissions Reduction Target
Energies 2021, 14(23), 7918; https://doi.org/10.3390/en14237918 - 25 Nov 2021
Viewed by 421
Abstract
Sustainability-Linked Bonds (SLBs) are a new type of general corporate purpose bond in which payments are tied to an issuer’s sustainability key performance indicators (KPIs) with respect to the environmental, social, and governance (ESG) criteria. The structure is complementary to green bonds. The [...] Read more.
Sustainability-Linked Bonds (SLBs) are a new type of general corporate purpose bond in which payments are tied to an issuer’s sustainability key performance indicators (KPIs) with respect to the environmental, social, and governance (ESG) criteria. The structure is complementary to green bonds. The Tesco SLBs are linked to the firm’s ability to cut its greenhouse gas emissions by 60%. The priority is to reduce its reliance on nonrenewable grid electricity, which contributed 65% of Tesco’s global carbon emissions footprint. Tesco accounts for 1% of electricity demand in the UK. Failure to meet the goals will result in a coupon step-up by 25 basis points on the last three coupons. The aim of our study is to investigate the presence of, how we call it ‘ESG spread’, marked by negative yield difference between SLB and regular bonds. It is something similar to ‘greenium’, that is, a premium paid by bondholders for green bonds when compared to nongreen bonds. We compare the bid and ask yields of SLBs with the interpolated yields, calculated for the yields of Tesco and Carrefour notes. Then, we look into the SLB yields in coupon step-up scenario to answer the question if the issuer’s failure to keep up with KPIs results in changing of ESG spread from negative to positive. Full article
(This article belongs to the Special Issue Sustainable Finance in Energy Sectors)
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Article
Responsible Lending Policy of Green Investments in the Energy Sector in Poland
Energies 2021, 14(21), 7298; https://doi.org/10.3390/en14217298 - 04 Nov 2021
Viewed by 459
Abstract
The paper concerns the issue of responsible involvement of commercial banks in Poland in green financing of the energy sector. The main reason for undertaking this topic is the observed increased interest of domestic banks in green financing of investments on the energy [...] Read more.
The paper concerns the issue of responsible involvement of commercial banks in Poland in green financing of the energy sector. The main reason for undertaking this topic is the observed increased interest of domestic banks in green financing of investments on the energy market in Poland. Therefore, the main objective are to explore the determinants of changes in the level and structure of bank loans under the influence of green investments in the energy sector in Poland. The article verifies the research hypothesis which assumes that an increase in financing green investments by bank loans in the energy market in Poland requires strengthening the synergy of responsible financing of sustainable development of the economy. For this purpose, a two-stage concept of the empirical research was adopted. On the first stage, questionnaire surveys were conducted among the largest Polish commercial banks to examine the respondents’ acceptance degree of the concept of sustainable financing and greening the loan portfolio. On the second stage, case studies were analyzed along with the analysis of selected secondary quantitative data. It was proven that commercial banks in Poland increase their commitment to sustainable financing, which is observed in the sectorally progressing process of “greening” the credit offer. There is also a noticeable change in their approach to social responsibility, especially in the context of the energy market, where financing of traditional, ecologically harmful projects is still dominant. However, this trend is slowly being reversed, towards supporting investments in the area of modern, environmentally-friendly energy solutions. However, “greening” of loan portfolios in the native banking sector requires a responsible lending policy based on various complex business decisions. Increasing their pro-ecological awareness of financing the economy is only a prerequisite, albeit inadequate, of further energy transformation in Poland. Full article
(This article belongs to the Special Issue Sustainable Finance in Energy Sectors)
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Article
Does Capital Structure Drive Profitability in the Energy Sector?
Energies 2021, 14(16), 4803; https://doi.org/10.3390/en14164803 - 06 Aug 2021
Viewed by 456
Abstract
This paper investigates the factors that determine the profitability of non-listed energy firms from four central European countries: Hungary, Poland, Slovakia, and the Czech Republic. We apply the regression analysis, on a large panel of firm-year observations for the 2015–2019 timespan, to verify [...] Read more.
This paper investigates the factors that determine the profitability of non-listed energy firms from four central European countries: Hungary, Poland, Slovakia, and the Czech Republic. We apply the regression analysis, on a large panel of firm-year observations for the 2015–2019 timespan, to verify the hypothesis on the inversed relationship between leverage and profitability of the companies performing in the energy sector. Our results support the inversed relationship for debt in total and long-term debt, which are consistent with the assumptions of the pecking order theory. However, for short-term debt, we have found a direct relationship, which confirms the assumptions of the trade-off theory of capital structure. Our work contributes to the existing debate on the interplay between financial leverage and profitability, by providing evidence for a large panel of non-listed firms, from a single sector (energy)-oriented perspective. Full article
(This article belongs to the Special Issue Sustainable Finance in Energy Sectors)
Article
Dynamic Analysis of the Similarity of Objects in Research on the Use of Renewable Energy Resources in European Union Countries
Energies 2021, 14(13), 3952; https://doi.org/10.3390/en14133952 - 01 Jul 2021
Cited by 2 | Viewed by 542
Abstract
The energy transformation towards renewable energy sources in the conditions of climate change and the accompanying climate risk is a priority for all countries in the world. However, the degree of advancement of activities in this area varies significantly between countries, which is [...] Read more.
The energy transformation towards renewable energy sources in the conditions of climate change and the accompanying climate risk is a priority for all countries in the world. However, the degree of advancement of activities in this area varies significantly between countries, which is the result of different activities for renewable energy sources in individual countries. The aim of this article is to determine the trends of changes in the area of the use of renewable energy sources in EU countries. The study uses TMD (taxonomic measure of development) methods and dynamic classification, which allowed to distinguish typological groups of objects with similar dynamics of the studied phenomenon. The EU 28 countries were analyzed. Statistics (Eurostat database) are provided for the period 2004–2019. As a result of the research, it was found that the Scandinavian countries and the countries of Western Europe were characterized by the highest stability in terms of the use of renewable energy sources over time. These countries also recorded the smallest increases in TMD. On the other hand, the unfavorable situation in terms of stability was observed mainly in the countries of Southern Europe. Full article
(This article belongs to the Special Issue Sustainable Finance in Energy Sectors)
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Article
The Investability of PV Systems under Descending Feed-In Tariffs: Taiwan Case
Energies 2021, 14(9), 2728; https://doi.org/10.3390/en14092728 - 10 May 2021
Cited by 1 | Viewed by 640
Abstract
The Taiwanese government has set an energy transition roadmap of 20% renewable energy supply by 2025, including a 20 GW installed PV capacity target, composed of 8 GW rooftop and 12 GW ground-mounted systems. The main trend of feed-in tariffs is downwards, having [...] Read more.
The Taiwanese government has set an energy transition roadmap of 20% renewable energy supply by 2025, including a 20 GW installed PV capacity target, composed of 8 GW rooftop and 12 GW ground-mounted systems. The main trend of feed-in tariffs is downwards, having fallen by 50% over a ten-year period. Predicting the future ten-year equity internal rate of return (IRR) in this study, we examine the investability of PV systems in Taiwan when subsidies and investment costs descend. We have found that the projected subsidies scheme favours investment in small-sized PV systems. Unless the investment costs of medium-sized PV systems fall or subsidies rise over the next decade, investing in medium-sized PV systems will be less attractive. Nonlinear and linear degradation causes slight IRR differences when using higher-reliability modules. Full article
(This article belongs to the Special Issue Sustainable Finance in Energy Sectors)
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Article
Total Cost of Ownership and Its Potential Consequences for the Development of the Hydrogen Fuel Cell Powered Vehicle Market in Poland
Energies 2021, 14(8), 2131; https://doi.org/10.3390/en14082131 - 11 Apr 2021
Cited by 13 | Viewed by 888
Abstract
Electromobility is a growing technology for land transport, constituting an important element of the concept of sustainable economic development. The article presents selected research results concerning one of the segments of this market-vehicles powered by hydrogen fuel cells. The subject of the research [...] Read more.
Electromobility is a growing technology for land transport, constituting an important element of the concept of sustainable economic development. The article presents selected research results concerning one of the segments of this market-vehicles powered by hydrogen fuel cells. The subject of the research was to gain extensive knowledge on the economic factors influencing the future purchasing decisions of the demand side in relation to this category of vehicles. The research was based on a numerical experiment. For this purpose, a comparative analysis of purchase prices in relation to the TCO of the vehicle after 3–5 years of use was performed. The research included selected models that are powered by both conventional and alternative fuels. The use of this method will allow to assess the real costs associated with the hydrogen vehicle. The authors emphasize the important role of economic factors in the form of the TCO index for the development of this market. The experimental approach may be helpful in understanding the essence of economic relations that affect the development of the electro-mobility market and the market demand for hydrogen fuel cell-powered vehicles in Poland. Full article
(This article belongs to the Special Issue Sustainable Finance in Energy Sectors)
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Article
Determinants of Enterprises’ Capital Structure in Energy Industry: Evidence from European Union
Energies 2021, 14(7), 1871; https://doi.org/10.3390/en14071871 - 28 Mar 2021
Cited by 4 | Viewed by 747
Abstract
The aim of the study is to identify the main determinants of the capital structure of energy industry companies in the European Union. The study was based on a panel of 6122 companies from 25 EU countries, operating between 2011 and 2018. The [...] Read more.
The aim of the study is to identify the main determinants of the capital structure of energy industry companies in the European Union. The study was based on a panel of 6122 companies from 25 EU countries, operating between 2011 and 2018. The study used multiple regression analysis. We have obtained strong evidence for a positive relationship between corporate debt and tangibility and size, and a negative relationship for profitability and liquidity. The factors that also affect the share of debt in capital have turned out to be growth (positive relationship) and non-debt tax shield (negative relationship), but the statistical significance of these relationships is ambiguous. We have shown that growth of industry business risk is accompanied by an increase in corporate debt and this is a distinguishing feature of the energy industry. For country-specific capital structure determinants, we have obtained strong evidence for the negative relationship between GDP growth, the level of stakeholder rights protection, the degree of capital markets development, and indebtedness of the companies studied. There has been moderate support for the hypotheses of a positive effect of inflation, taxation, and the degree of financial institutions development. Our study has also shown a negative impact of the volume of energy consumption and the share of renewable sources in its production and a positive impact of market monopolization on the indebtedness of companies from the energy industry in the EU. Full article
(This article belongs to the Special Issue Sustainable Finance in Energy Sectors)

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Case Report
Scaling up Renewable Energy Assets: Issuing Green Bond via Structured Public-Private Collaboration for Managing Risk in an Emerging Economy
Energies 2021, 14(11), 3076; https://doi.org/10.3390/en14113076 - 25 May 2021
Viewed by 720
Abstract
Green bonds have increasingly been utilized around the world as a source of financing for renewable energy development, designed with compliance requirements and measurable economic returns to investors, while mitigating climate change. However, the efficacy of green bond arranged in the emerging economies [...] Read more.
Green bonds have increasingly been utilized around the world as a source of financing for renewable energy development, designed with compliance requirements and measurable economic returns to investors, while mitigating climate change. However, the efficacy of green bond arranged in the emerging economies for financing renewable energy assets and how the underlying risks are managed have remained to be explored. The paper aims to examine the evolving green financial system sponsored by both public and private institutions in managing such risks within China’s emerging economy. A case study of green financing for a bundle of wind power assets led by a state-owned enterprise (SOE) reveals an alternative approach by structuring public–private collaboration while stipulating market-based financial incentives to institutional stakeholders under a political economy. This institutional consortium is composed of a state development bank, a commercial bank, credit rating agencies, institutional and private investors, regional power purchasers, and carbon trading entities. Financial stakeholders’ risk in such emerging sustainable investment is moderated by these participating institutions and structured “upsides” from carbon trading aligned with the framework of green finance and standards for green bond development. The results reveal the potentials of scaling up the development of renewable energy by adequately managing and sharing key risks, while allocating substantial funding into renewable energy projects under such a green financial system that is to be complementary with a scalable post COVID-19 economic recovery. Full article
(This article belongs to the Special Issue Sustainable Finance in Energy Sectors)
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