Australia and NZ utility services company Intellihub has received green loan certification for its smart metering by the Climate Bonds Standard.
The certification, under the scheme’s Electrical Grids and Storage criteria, for the AU$1.45 billion (US$1.1 billion) five-year facility will support the further rollout of Intellihub’s smart meters across Australia and New Zealand and should enable the company to access additional sources of green-linked financial capital.
Intellihub’s green loan certification, claimed as the first in the world, demonstrates the essential role of the smart meter in helping to build grid resilience and facilitate the transition to net zero emissions, a company statement reads.
Smart meters are an essential part of energy systems for retailers, network operators and consumers, Intellihub CEO Wes Ballantine says in the statement.
“We are seeing rapid increases in solar penetration and energy businesses are digitising, decarbonising and decentralising their operations. Smart meters are playing a crucial role in supporting this transition across Australia and New Zealand.
“They’re also providing vital data and services to energy networks which helps manage peak demand, the impact of increasing penetration of solar energy and keeps the electricity grid safe and secure.”
The Climate Bonds Standard from the London headquartered Climate Bonds Initiative provides a certification scheme for bonds and loans to indicate consistency with the 2oC warming limit of the Paris Agreement.
The Electrical Grids and Storage sector, which was introduced in August, is one of eight in the energy sector, with others in the areas of transport, water, buildings, land and marine resource use, industry, waste and ICT.
Broadly the criteria, which also pertain to transmission and distribution lines, interconnectors, transformers and grid flexibility measures, require that the project supports decarbonisation, including mitigation, adaptation and resilience. A November update adds criteria text for AMI to align with EU taxonomy.
Part of the requirements of a Climate Bonds Standard certified green loan is the level of accountability required by the issuer. Intellihub has established its own sustainable finance framework setting out how it will manage the funds, which has been independently assured by EY.
Reports are made annually throughout the term of the loan to show that funds are being used to provide products and services that have climate integrity through both their contribution to climate mitigation and their adaptation and resilience to climate change.
Smart meters have been the default meter in Australia since late 2017, however only one in four meters across the country are smart meters, according to Intellihub. The Australian Energy Market Commission is currently undertaking a review into metering regulation with the aim of accelerating deployments of smart meters and increasing the benefits to consumers.
Given the newness of the Climate Bonds Standard certification for smart metering, more projects are expected to follow. The Electrical Grids and Storage sector criteria will be reviewed within three years of launch, or earlier if the need arises.