Europe invests only EUR 17bn. in new wind farms in 2022 - Auction prices will have to rise, and it is up to the states to restore investor confidence

Europe has invested only EUR 17 billion in new wind farms in 2022, which is the lowest figure since 2009 - according to the March report "Financing and Investment Trends: European wind industry in 2022" published by the organization WindEurope. For example, EUR 41 billion was invested in 2021.

- This data is a stark warning for governments and policy makers. Unless we quickly regain the confidence of investors, we will not be able to reach the European energy and climate goals - warns WindEurope.

The aforementioned amount financed the construction of 12.2 GW of new wind farms, almost all of which are onshore. Germany invested the most (EUR 2.3 billion), followed by Finland (EUR 2.1 billion), while Poland is in third place with a record EUR 1.9 billion of investments.

However, overall, this is significantly less than the annual 31 GW that needs to be installed between 2023 and 2030 in order to meet the EU's 40-45% renewable energy targets.

- The Russian invasion of Ukraine hit the European economy hard, just as it was starting to recover from COVID. High raw material prices, disruptions in supply chains and inflation have contributed to increased costs and risk for investors - explains WindEurope.

Not even the governments managed to cope with the new circumstances. According to the report, the measures were taken in good faith and aimed to protect consumers from high energy costs.

- But many of these measures undermined revenues, and all of them were uncoordinated and led to different interventions in the market, which caused uncertainty and damaged investor confidence. And the conditions for financing have become more difficult. Interest rates have risen as central banks try to control inflation, and increased risk for projects, including delays and failure, has influenced lenders to raise risk premiums, the report said.

The authors report that logistics costs have increased by up to 50% in the last two years. Auction prices will have to rise to cover the increased costs of raw materials and financing. But there are reasons for optimism. There is demand for renewable investment, WindEurope believes, and good projects will continue to have access to capital. Decision makers have seen the benefits of renewable energy sources in ensuring energy independence.

- It is possible to deal with increased financial risks and higher project costs, but the key is in the regulatory risk that leads to uncertainty, so governments must restore investor confidence through regulatory stability - the report concludes.


EUR 1.1 billion invested in 860 MW in Southeast Europe

The report covers 27 EU countries, as well as Serbia, Bosnia-Herzegovina, Montenegro, North Macedonia, Turkey, Norway, United Kingdom, the Faroe Islands, and the territory under the control of the Pristina authorities.

EUR 1.1 billion was invested in Southeast Europe, which financed 860 MW of new projects, representing 7% of all new wind farms in Europe. New capacities are more evenly distributed in this part of Europe than in previous years - three projects in Romania have a total of 250 MW, Croatia and Bosnia-Herzegovina each have 220 MW of new capacity, while Greece has 170 MW.

- National energy policies and an unclear regulatory environment have reduced investments in more than half of the EU member states, including many in the Southeast Europe region - the report states.

M. D.

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