Europe saw €19bn of new wind farm investments confirmed in 2019, according to WindEurope’s annual “Financing and Investment Trends” published on 7 April. A further €33bn were invested in the refinancing of wind farms, the acquisitions of wind farm projects and other transactions.
Most of the investments in new wind farms were in onshore wind – €13bn. This covered over 10 GW of new projects, showing continued strong interest in Europe for the development of onshore wind farms.
“Governments and investors continue to have strong appetite for onshore wind. Because in most of Europe it is the cheapest form of new power generation capacity. And the latest auctions in Poland, Denmark, Greece, France, Italy and Lithuania all testify to the strong support for onshore wind and competitive prices. We expect onshore wind to be 80% of all wind capacity additions over the next five years”, says WindEurope CEO Giles Dickson.
Spain financed the most wind energy projects in 2019 both in terms of capacity financed and amount invested, €2.8bn. Remarkably the next highest investors in onshore wind among EU member states were Sweden and Poland.
“Investors understand that wind energy is a good bet to deliver on the European Green Deal. Wind is 15% of Europe’s electricity today. The EU Commission expects it to be 50% by 2050. And 2019 could have been a record year for wind investments in Europe, had it not been for a sharp fall in new investments in Germany. The problem in Germany is permitting: the rules are too complex and it’s unclear where they’re heading – the Government must clarify things to get investors back”, says Dickson.
WindEurope’s “Financing and Investment Trends“ show an increasing interest of corporates to source renewable energy. Corporate off-takers can reduce and fix electricity costs over time and reduce their impact on the environment by signing a long-term PPA.Never before have more renewable Corporate Power Purchase Agreements (PPAs) been signed than last year. Across all renewable energy sources, corporates contracted more than 2.5 GW in 2019 alone, with wind contributing around 1.7 GW.
The report also takes a closer look at the diverse investors involved in wind energy financing. Banks play an increasing role extending over €20bn of non-recourse debt in 2019. The importance of non-recourse debt continues to grow. It now accounts for 49% of all investment in new onshore wind projects and 77% of all investment in new offshore wind farms.
The Sustainable Europe Investment Plan, the investment pillar of the European Green Deal, aims to mobilize at least €1tn in additional private and public capital for renewable energy projects in the next decade. However, the short-term perspective is overshadowed by the effects of COVID-19. The pandemic is likely to reduce market liquidity in debt and equity markets.
“We have yet to see the scale of COVID-19’s impact on wind energy investments. But our message to investors and policymakers is clear: Renewable energies and the European Green Deal are the motor for Europe’s recovery. They create growth. They secure jobs. They’re key to our technological leadership towards a climate-neutral economy”, says Dickson.