SECRETARY PYATT: Thank you, Pamela, and good morning, everyone. Many thanks to the We Mean Business and America is All In coalition for hosting this inaugural event.
This is literally my first week at the State Department as our Under Secretary of State for Energy Resources. It is a great honor for me to begin this term by recognizing the important role that small and medium-sized enterprises (SMEs) play in our energy ecosystem.
I also want to congratulate the SME Climate Hub on its launch in the United States.
Thirty million American SMEs form the backbone of the US economy. They account for almost two-thirds of new jobs in the private sector in recent decades. They are integral to the economic health of our country and to the fight against climate change and economic transition.
We simply cannot meet our ambitious climate goals if America’s SMEs are not part of the effort. And I think most SMBs in America recognize that we can’t afford to be idle. SMEs must protect their operations from the effects of climate change and use more cost-effective and efficient energy sources.
That’s why I’m excited to see initiatives like the SME Climate Hub ramp up efforts in the United States.
For 100 years, energy has been central to America’s position as a global leader, and recent actions by the Biden-Harris administration will help ensure that we maintain that leadership position as we all work to transform our energy system away from one focused on fossil fuels. powered by renewable sources.
It’s an overused phrase, but I truly believe we are at a turning point in history. Global energy markets are in the midst of a fundamental shift, as falling costs of clean energy technology and a supportive political environment drive the economics of the energy sector upward.
Renewable energy sources are increasingly cheaper than their fossil counterparts. Combined with improved energy storage and efficiency, they will disrupt traditional energy markets in a profoundly positive way.
But unfortunately, the organic pace of energy transformation is insufficient to meet either our climate or energy security goals. This is where government policy comes in.
The Inflation Reduction Act, IRA, represents a historic $369 billion investment in climate and clean energy. IRA is driving innovation and creating unprecedented market demand for the technology and resources needed to meet climate goals in the United States and around the world.
The IRA helps strengthen the US market as the world’s most flexible market for mobilizing funds for the energy transition.
SMEs can also take advantage of this huge private sector opportunity at many points along the value chain. Indeed, SMEs are often in the best position to identify strategic clean energy opportunities that allow them to innovate, grow and hire faster and thereby succeed in the global marketplace.
Thanks to the IRA, SMEs are now selling and installing solar kits, heat pumps, water heaters and electric vehicle charging stations on an unprecedented scale. Small and medium-sized companies cracking the code for low-carbon building materials are driving changes in market demand.
Throughout the supply chain, thousands of components are needed and manufactured for turbines, inverters, batteries and other solar equipment. Not to mention opportunities to emerge from frontier areas such as hydrogen, carbon sequestration, small and modular nuclear reactors.
SMEs that provide climate-smart products and components sold worldwide are an important part of our path to reducing greenhouse gas emissions. We look forward to hearing more about how SMEs can help decarbonise the global supply chain at COP{27) and partnering with the SME Climate Center in these efforts.
The 5,000 SMEs that made climate commitments at the Hub and joined the UN’s Race to Zero need to buy clean energy to run their global operations and build supply chains that meet their climate commitments.
Larger companies that work with SMEs also try to deliver on their corporate promises. The energy needs of many of these companies are equal to those of a sovereign nation. If they can meet their clean energy commitments, it will stimulate economic growth and reduce global emissions significantly and simultaneously.
Despite this proven demand and the potential to generate new investment, there are challenges for companies of all sizes trying to buy clean energy and power systems historically built for fossil fuels. In some countries, this requires unknown reforms, while in others infrastructure investments such as strengthening the electricity grid.
The State Department and the Office of Energy Resources want to support America’s SMEs in meeting their climate commitments while helping to grow more profitable businesses.
One of the most important ways we do this at the State Department is by increasing access to clean energy at affordable prices. This is where ENR’s Clean Energy Demand Initiative, or CEDI, comes in. Through CEDI, companies can signal their clean energy demand and investment potential to governments considering energy sector policy reforms to help use clean energy in an affordable and reliable way.
Since CEDI’s launch at COP26 last year, companies have shown investment interest that could bring up to $100 billion in renewable energy infrastructure in 14 countries around the world.
These investments in clean energy infrastructure and policy reforms will benefit not only the larger companies leading this change, but also their local suppliers and other small businesses up and down the supply chain. Working through the SME Climate Hub, we hope that CEDI will help small businesses that cannot always allocate the funds needed for climate-smart or energy-efficient technologies to obtain more reliable and affordable clean energy.
As you are all well aware, electricity markets in the United States are very diverse, and as a result there are many different ways for companies to purchase clean energy. Therefore, US SMEs have a unique experience to share globally and benefit from conversations with other SMEs as well as large business partners.
I very much look forward to applying this experience to CEDI and the rest of the ENR team’s efforts to advance our climate ambitions.
Targeted policies to accelerate the energy transition and private sector innovation have great potential to reduce emissions, improve energy security and create economic opportunities.
On that note, I wanted to commend today’s panelists – Adore Me, Walmart and Mastercard for their work in opening up supply chains with SMEs and I look forward to this morning’s discussion.
I wish the SME Climate Hub tremendous success here in the United States and look forward to working with you to meet our shared economic and climate goals.
