Miscellaneous

Investing in Wind Power in Europe

October 25, 2018

Wind turbine prices remain well below levels seen a decade ago. Wind turbine prices have dropped substantially since 2008, despite continued technological advancements that have yielded increases in hub heights and especially rotor diameters. Further cost decreases occurred in 2017, with wind turbines sold at price points similar to the early 2000s.

Lower turbine prices have driven reductions in reported installed project costs.


The two main sources of capital in wind energy finance in Europe have been sponsor equity and debt. Sponsor equity refers to a traditional equity investor, typically the owner(s) of the project and/or the developer. Equity capital face the highest risk in the project because the owners are the responsible party to bring the initial concept idea through development, construction and commercial operation. In addition, the owners are also the last investors to be liquidated in case of a project default.

In 2017, the wind energy industry invested €51.2 bn in Europe. This included investments in new assets, refinancing transactions, mergers and acquisition at project and corporate level, public market transactions, and private equity raised.

In 2017, wind energy represented half of the renewable energy investments in new power capacity. Onshore wind alone made up one-third of the market. Overall, investments in new wind power capacity have been steadily increasing in the last five years at a compound annual growth rate (CAGR) of 6%. All other technologies have seen falling investments for the same period.


Wind energy represented the largest investment opportunity in the power sector, accounting for half of all investments in 2017. The technology is seen as a major driver for moving beyond fossil fuels and conventional power assets.


2017 annual figures


Europe raised a total of €51.2bn for the construction of new wind farms, refinancing operations, project and company acquisitions as well as public market fundraising.

Investments in new wind farms amounted to 22.3bn, a decrease of 19% from 2016.

Project acquisitions doubled in value in 2017 to €9bn, from €4.3bn in 2016.

Company acquisitions also doubled in value as a result of industry consolidation, from €2.5bn in 2016 to €5.3bn in 2017.

Banks extended €15.5bn in non-recourse debt for the construction of new wind farms and the refinancing of existing ones.

Wind energy was the largest investment opportunity in the power sector in Europe.

Investment trends


The low interest rate environment has given rise to a dynamic refinancing market.

Offshore wind has experienced an uptake in corporate finance transactions over the past two years. However, offshore wind project finance has declined for new FIDs.

Refinancing activities and the sale of project minority stakes are now incorporated much earlier in the financial arrangements of projects.


RelAted Documents and POSTS

Our library is organised in three collections: documents and posts that, if taken together, constitute the Prospectus; same for the business plan; and miscellaneous thoughts, ideas, offers in the third collection.

Prospectus

Introducing Eolian: Low-risk Crypto

Eolian tokens are digital shares of a dividend-paying company (fund). Most of the fund’s assets are operational wind farms in the European Union with very stable revenues. Some of the fund’s assets will be shares of technology companies whose innovations promise to take renewables up to the next principal level.

BY
Eolian Project
June 13, 2018
Business plan

Financial Model

The financial model is built on our real-life knowledge of how things happen in the industry in Romania. This approach has its pros and cons. Of course, the pan-European reality is different. However, we think that Romanian case is “one of the worst” in the entire EU so the reality check will only provide us with upsides.

BY
Eolian Project
June 13, 2018
Business plan

Wind Power and Costs Planning

The economic model for the development of the Eolian Fund should take into account some sort of the technology index, as core engineering approaches may change several times during the life of a single turbine.

BY
Eolian Project
June 13, 2018