Germany’s Commerzbank has emphasised the need of speeding up the global energy transition in response to current crises.
While many countries have committed to increasing their renewable energy targets, and onshore and offshore wind are considered a key technology to move away from reliance on Russian gas, the sector still faces challenges.
Manufacturers in the wind energy industry are seeing a huge reduction in their margins due to a sharp rise in production and transport costs.
Disruptions to supply chains are causing delays in the construction of plants and also to the timing of final invoices. Increasing production costs, constantly rising interest rates and newly sparked discussions about remuneration regimes mean that project developers have little planning security.
Also, despite all the political efforts, they are still struggling with a lack of designated areas for wind power and have to put up with lengthy approval processes.
Head of Renewable Energies at Commerzbank Tim Koenemann said: “The wind industry is currently experiencing incredibly turbulent times. Our business is already subject to constant change, but the multitude of challenges and opportunities that our customers are also confronted with at the same time is quite remarkable.”
With around 7.3bn euros in financing commitments, Commerzbank’s current strategy will see its renewable energy sector portfolio grow to 10bn euros by the end of 2025.
Koenemann added: “But in Europe – and in our home market of Germany especially – we also want to support the financing of technologies that are part of the energy revolution, such as battery storage and green hydrogen, in addition to the more rapidly growing renewable energies market.”
The bank identified offshore wind farms as harbouring further growth potential.
Capacity currently installed in the German North Sea and Baltic Sea is to be quadrupled to 30GW by 2030. It will increase to 40GW by 2035 and is even set to reach at least 70GW by 2045.
Koenemann said: “In these circumstances, we find it highly realistic that the projects that will be approved and implemented in the future will be significantly larger in terms of capacity and financing volume.”