Record wind power capacity financed in 2018

Europe invested an unremarkable €27bn (£23.4bn) in new wind farms last year, but falling costs mean this will finance a record 16.7GW of capacity, analysis by WindEurope has revealed.

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Onshore wind will account for 12.5GW of the new capacity announced last year, with the UK the largest investor, followed by Sweden.

It was found that the cost of 1MW of new onshore wind capacity has fallen from €2m to €1.4m since 2015, with the price for 1MW of offshore wind falling from €4.5m to €2.5m.

“Wind energy got 60% of all the new investments in power generation capacity in Europe last year, and it was a record year for the amount of new wind energy capacity financed,” WindEurope CEO, Giles Dickson, said.

“Cost reduction means investors now get more MW per euro they invest, and lenders are more comfortable with the risks so the costs of finance are falling too."

The findings also show that a further €24.1bn was invested in the acquisition of wind farms, including projects under development – much more than in previous years.

WindEurope said that the maturity of wind energy and competitiveness of the sector have brought in more investors as equity partners in projects, particularly from financial services.

New business and ownership models have diversified the pool of investors, with banks, institutional lenders and export credit agencies looking to provide long-term finance.
 
Lower interest rates and falling risk premiums – as lenders become more comfortable with risk – mean wind farms are getting competitive funding and lower financing costs, according to the analysis.

But WindEurope warned that Europe would have to keep investing significant amounts in wind if the continent is to meet its 32% renewable energy target for 2030.

“One problem is permitting. The processes are slower and more complex than they were,” Dickson said. “Another problem is the lack of visibility today on governments’ plans for renewables.

“The national energy plans they have to write this year are key to resolving this. If they’re clear and ambitious this’ll provide investment signals which will make projects happen.”

 

Image credit: iStock

Author: 

Chris Seekings is a reporter for TRANSFORM

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