32 33 Building and funding a 21st century grid At the core of this challenge are the high costs of capital associated with the development of new scaled energy resources and infrastructure. The cost of rebuilding the grid and adding capacity is substantial (for US, estimated at $50 billion p.a.). Power generation, battery storage, transmission and generation from 2030 to 2050 will require investment of more than $250 billion in the US per year, compared to the $450 billion going into data centers. New economic models will be required to incentivize investments and overcome the overlay of long permitting periods, extended project lifecycles, and the technical risks of advanced technologies. For example, generating capacity and transmission lines typically have a 30-year service life though contract commitments are 10-15 years at best, challenging the investment case for new projects. Establishing clear, bankable cost-recovery mechanisms that provide utilities and private developers with the financial certainty that will enable them to invest at-speed and at-scale may include: • Public private partnership (PPP) models that directly allow for cost-sharing or distributed cost- recovery; • Build-own-transfer (BOT) agreements that allow a private developer to secure initial financing and eventually pass management of new infrastructure to the utility at a pre-arranged price; • Milestone-based arrangements where funding is released incrementally upon completion of specific project phases (e.g., permitting, substation build-out, line energization). Concessional finance and capital stack design can reduce the cost of capital of high-impact, but decidedly longer- term projects, layering different sources of funding (equity, debt, grants, and guarantees) into a hierarchy that reflects each source’s risk tolerance, cost of capital, and repayment priority. Expanding access to credit for energy infrastructure by monetizing the projected cash flows over the lifecycle of an energy asset can underwrite new projects. By assigning immediate value to these future earnings, developers can raise capital up front at investment-grade terms, significantly lowering the cost of financing. In practice, this structure “monetizes US resources” by turning energy potential into tangible balance sheet assets, and secures debt or attracts equity investment. For example, a federal credit facility or public-private vehicle might underwrite a multi-state transmission line by projecting its value based on congestion reduction, market integration benefits, or contracted usage rates. Technology providers themselves are a critical piece of capital formation in new generation and transmission. Though many data center providers have looked to co-location or behind-the-meter solutions out of short- term needs, this may have some risk. In the UAE, Emirates Global Aluminum built 3 gas-fired power plants to meet its independent demand, but this proved highly inefficient and EGA later transferred the assets to the local power operator to access the full grid at lower costs. The financial strength of technology providers may be better suited to develop higher-cost solutions like nuclear or geothermal if provided the appropriate financial incentives. 4.2 LONG-TERM BUILD-OUT We need to standardize and industrialize the build-out of the grid infrastructure. Unattributed quote Unlocking low-cost credit from world wealth Eco Capital Exchange uses an interest-free, investment grade credit system that underwrites alternative energy and transmission projects by monetizing future productive capacity. Companies can unlock value from underutilized assets by converting them into a form of credit known as the ECO—an enterprise-backed, interest-free credit obligation. This model, in effect, allows US resources to be used as assets on its balance sheet to unlock investment. Modeled results show a >10% IRR uplift for infrastructure projects by using a 40- 50% ECO credit, eliminating financing costs. 33