Finance | WindEurope
Watch Giles & Pierre Ep. 24


Finance and investments

Wind energy has offered a wealth of attractions to investors seeking long-term, stable revenues in a low interest rate environment. The European wind sector has long been open to overseas investors, who look at Europe as a major infrastructure hub for onshore and offshore technologies alike.

In recent years, decreasing costs and reduced risk perceptions have helped pioneer wind energy to blue chip corporations committed to procuring 100% green electricity for economic and sustainability reasons.

Investments in wind energy have increased significantly over the last years. The industry has tapped approximately €150bn since 2010, with €150bn more expected on the way to 2030 for greenfield assets.

In 2015 alone, the sector attracted financing in excess of €26bn for a total of 9.7 GW of new assets across Europe, and a record breaking year for the industry.

Annual New Asset Financed 2010 – 2015

With both onshore and offshore markets setting records individually, wind became the largest investment opportunity within the renewable industry.

Take a look at our statistics for detailed information on investment trends.

Financing wind

Emerging new business and ownership models have unlocked the potential for long term sources of finance. The financial sector has become very keen to access Europe’s wind energy projects. This has led to a significant amount of affordable debt, in particular in the form of non-recourse financing.

Financial structures in the wind energy sector 2010 – 2015: Corporate Finance (on-balance sheet) and Non-recourse Finance (off-balance sheet)

Non-recourse finance has traditionally been the predominant model for leveraging almost 70% of the CAPEX in onshore wind. In the recent years, the offshore wind sector has also witnessed a growing demand for off-balance sheet financing, as risk perceptions change and power producers become more comfortable with multi-contract structures. Currently, 44% of the new capacity in offshore wind is financed on a non-recourse basis.

Take a look at our statistics for detailed information on financial highlights.

Offshore wind financing

Europe leading the global markets

© DONG Energy

High wind resources, technology advances, and government backing have placed Europe at the forefront of global offshore wind markets. The surge of investments in the recent years have brought the size of the industry to over €18bn in 2015 alone.

Investments for new assets and refinancing in offshore wind and transmission lines

Offshore wind investments have largely been supported by the financial markets. Lenders and investors alike are now present more than ever in many notable offshore wind projects.

Project finance debt levels 2009 – 2015

Investor appetite for risk is no longer limited to assets in operation. Construction risk might be a step too far for some institutional investors, but others find these risks to be acceptable. As a trend, power producers continue to lift the majority of capital in offshore wind projects.

However, due to the large scale investment and stable income returns, more equity is being raised from the financial services industry. Their direct share of installed capacity has moved from 3% in 2010 to almost 25% in 2015, with many international names in the market, including Japanese trading houses.

Owners’ share of installed capacity

Take a look at our statistics for more information on offshore wind.