Investments in wind energy in Europe more than doubled in 2023 compared to 2022, driven by record financing of offshore wind projects.
According to WindEurope an easing of inflationary pressures, greater certainty in electricity markets, and improved tariff indexation by governments created a more favourable investment climate last year.
Despite a tightening of financing conditions, Europe invested a record €48bn in wind energy last year representing 21.2GW of financed capacity.
New investments in offshore wind alone amounted to €30bn, a stark contrast to 2022 when almost no offshore wind farms were financed.
Onshore investments were comparable with previous years at €18bn, but less than what is needed if Europe is going to deliver on its climate and energy objectives.
Last year’s significant rebound was due to a relative stabilisation of costs after two years of significant inflation in steel and other commodity prices.
It was also thanks to an improvement in state policies, with simplified permitting allowing for a larger projects pipeline. Additionally, government’s growing recognition of the need to index auction tariffs and prices contributed to restoring investor confidence.
Europe approved significantly more permits for new onshore wind farms in 2023 than in previous years, largely due to new EU rules on renewables permitting.
Governments awarded a record 27GW of wind in auctions in 2023, half onshore and half offshore.
The EU Commission’s Wind Power Package in October outlined 15 concrete and immediate actions to strengthen the industry.
In December, 26 EU Member States and 300 companies signed the European Wind Charter, endorsing the Package and committing to take necessary actions.
The Package and Charter commit national governments to support the European wind industry by improving auction design, fully indexing prices to reflect costs, tightening pre-qualification criteria, and providing clearer visibility on auction schedules and volumes for better industry planning.
WindEurope forecasts that the EU will install an average of 29GW per year from 2024-2030, bringing the EU’s installed wind capacity to 393GW by 2030.
This means that the EU wind energy target for 2030 is within reach.
The biggest threat to the accelerated expansion of wind energy now is the timely expansion of Europe’s onshore and offshore electricity grids, said the body.
“Better policies and less Government meddling in electricity markets have helped a lot here,” said WindEurope chief policy officer Pierre Tardieu (pictured).
“The number one bottleneck is grid now.
“We need better top-down planning, innovation in financing new grids and better use of the existing grid.”