European wind financing fell 30% in 2019 to Eur19 bil: report

London — Investment in new wind farms in Europe fell 30% in 2019 although lower project costs saw capacity financed fall less sharply, WindEurope said Tuesday.

New asset investment last year fell to Eur19 billion ($20.4 billion) for a total 11.7 GW financed, from Eur27 billion in 2018 for a total 16.7 GW.

A further Eur33 billion were invested in refinancing, acquisitions and other transactions relating to wind farms, the report showed.

Onshore wind attracted Eur13.1 billion with 10.3 GW of projects reaching FID in 2019, while offshore accounted for Eur6 billion for 1.4 GW with only 2012 seeing a lower sum invested in new offshore projects.

"Governments and investors continue to have strong appetite for onshore wind," WindEurope CEO Giles Dickson said adding that it has become the cheapest form of new power generation capacity in most of Europe.

"We expect onshore wind to be 80% of all wind capacity additions over the next five years," Dickson said.

Spain financed most wind energy projects in 2019, followed by Sweden and Poland.

Germany and the UK, which led the charge in recent years, fell back amid a pause for new projects.

1.7 GW of wind PPAs

The report showed wind accounting for 1.7 GW of the 2.5 GW contracted by corporate off-takers in 2019 under power purchase agreements.

Banks extended over Eur20 billion of non-recourse debt in 2019, accounting for 49% of investment in new onshore and 77% of investment in new offshore capacity.

Capital costs for one megawatt of onshore wind capacity has fallen to Eur1.3 million from Eur2 million in 2015.

Offshore costs rose in 2019 to average Eur4.4 million/MW -- on par with 2015 after falling to Eur2.5 million/MW in 2018.

WindEurope pointed at special circumstances for three projects with Eur5 million/MW-plus costs financed in 2019 (Scotland's 450 MW Neart na Gaoithe, France's first project 480 MW Saint Nazaire and the 88 MW Hywind Tamped floating offshore).

Using average capex per MW and its installations projections, some 60 GW of capacity could be financed at Eur94 billion over the next three years, it said.

COVID-19 impact not clear yet

"Investors understand that wind energy is a good bet to deliver on the European Green Deal," with wind's share in Europe's electricity mix set to rise from 15% to a 50% target by the EC in 2050, the report said.

The Sustainable Europe Investment Plan, the investment pillar of the European Green Deal, aims to mobilize at least Eur1 trillion in additional private and public capital for renewable energy projects in the next decade.

"We have yet to see the scale of COVID-19's impact on wind energy investments," Dickson said, adding that renewable energies and the European Green Deal could be the motor for Europe's recovery as they create growth and secure jobs.

First analysis suggests that the coronavirus would have moderate effects on supply chains for wind energy, the association said.

A knock-on effect of a slowdown in China's manufacturing output was already visible in other countries, it said.

Delays of three months in construction of wind farms and in the financing of projects could reduce 2020 investment by around Eur5 billion that could be compensated 2021 assuming the market fully recovers in 2020, it said.

European Wind Investment (EUR bln)

Source: WindEurope