Europe invested just €17bn in new wind farms in 2022, according to WindEurope, down from €41bn in 2021 and the lowest investment figure since 2009.
The EU wants to accelerate the build-out of wind energy to strengthen its energy security and ensure affordable electricity prices.
However, recent market interventions and remaining barriers are deterring investors, WindEurope’s Financing and Investment Trends report found.
The continent urgently needs to restore investor confidence, otherwise it might see a drop in new wind farms instead of the big increase envisaged in REPowerEU, the representative body warned.
Germany invested the most in new wind farms in 2022, followed by Finland and Poland.
In 2022 the EU installed 16GW and WindEurope estimates that the EU will build on average 20GW of new wind farms over the next five years.
WindEurope chief executive Giles Dickson said: “The EU needs to build 31GW of new wind turbines every year to reach its 2030 targets.
“But the numbers speak a different language. Last year’s investments in new wind farms only add up to 10GW. At the same time turbine orders are down and the EU is only building half as much new wind as it needs.
“The EU must urgently restore investor confidence and channel money into its wind energy supply chain if it wants to reach the REPowerEU objectives.”
Project acquisitions reached 22GW in 2022, with more early stage developments being acquired, according to the research.
Nearly all the financed capacity was for onshore wind farms. France was the only country to finance two small floating offshore wind projects with a total capacity of 60MW.
Not a single commercial scale offshore wind farm reached final investment decision (FID) in 2022, according to the report.
At least three commercial-scale offshore wind farms were projected to reach FID in 2022 but delayed the decision. WindEurope said they are now expecting them to reach FID in 2023.
The wind industry is still suffering from higher input costs and supply chain disruptions with the cost for producing a wind turbine in Europe increasing by up to 40% over the last two years, the report found.
Furthermore, uncoordinated emergency measures on electricity markets and national market interventions have created uncertainty and deterred investors, while permitting of new wind energy projects remains too complex.
Higher interest rates have impacted the economics of wind energy projects in 2022, especially big and CAPEX-heavy offshore projects.