Europe invested a total of 51.2 billion in wind energy in 2017, including €22.3 billion in new wind farms, according to industry group Wind Europe.
According to a new report issued by Wind Europe, total investment in wind energy last year rose by nine per cent over the previous year. The remainder of the 2017 investments – €28.9 billion – was invested in the refinancing of existing wind farms, project and company acquisitions, and public market fundraising.
The €22 billion invested in new wind farms was down on the €28 billion invested in 2016, Wind Europe said. But it covered more capacity – 11.5 GW compared to 10.3 GW – reflecting the falling costs of wind energy.
The organization also says that the maturity of the wind sector and the competitive pressure of auctions are changing the way wind farms are financed. While power producers still carry projects on balance sheet through Final Investment Decision (FID), refinancing and the sale of minority stakes in projects are coming in much earlier in the process.
In addition, more investors are entering projects as equity partners, particularly from the financial services industry, Wind Europe added. These partnerships allow power producers to ‘recycle’ capital to finance new wind farms. The number of investors backing the wind industry is also growing.
“With €51.2 billion, wind energy accounted for half of all power sector investments in 2017,” said WindEurope Chief Policy Officer Pierre Tardieu. “It’s delivering more capacity for less money. This is largely due to increased competition in auctions and technology advances that are driving cost reductions in the supply chain.
“The outlook for 2018 is strong with investment volumes expected to increase,” Tardieu added. “The auction system for wind energy is settling down, and projects that have won auctions are now reaching Final Investment Decision. The investment outlook up to 2020 is strong but there remains a lack of visibility on new projects after 2020. Having this visibility throughout Europe is crucial to providing the right investment signals.”