A recent report published by WindEurope Stresses that Europe has invested 41.4 billion euros in new wind farms in 2021.
Wind farms are a set of individual wind turbines that are interconnected to the grid. Europe is investing € 41.4 billion in new wind farms in 2021 in its pursuit of cleaner energy.
This figure is 11% less than in 2020. However, the investments cover 24.6 GW of new capacity, which is a record for new capacities financed in one year. Most of the funded new wind farms were on land – 19.8 GW. This partly explains why the amount invested has decreased compared to 2020: wind on land is slightly cheaper than offshore.
Geographically, the investments were evenly distributed and 11 countries invested more than 1 billion euros. The United Kingdom invests the most (almost exclusively in offshore wind), followed by Germany, France, Spain, Sweden and Finland. Spain invests the most in onshore winds. Sweden, Finland, Poland and Lithuania have invested more in new wind farms than in any previous year.
Europe is looking to get more new wind farms
Strong investments in onshore winds show that Europe is starting to turn in the direction of resolution. However, the results continue to position Europe far from achieving its new goals of climate change and energy security. The REPowerEU program now wants the EU to expand its wind capacity from 190 GW today to 480 GW by 2030. This means building 35 GW of new wind turbines per year by 2030. New wind investment in the EU in 2021 covered only 19 GW of new capacity.
The wind supply chain in Europe can and must be built much faster. Europe’s wind energy market is currently half the size it should be, undermining the competitiveness of the supply chain. This is compounded by rising costs for steel, other goods and components, supply chain disruptions and higher delivery costs.
The five European wind turbine manufacturers are now operating at a loss. To restore the health of the wind supply chain, the EU must continue to improve licensing, ensure a strong internal market and pursue trade and industrial policies that support the sector. Europe will achieve its climate goals and ensure energy security only if it removes barriers to the expansion of renewable energy sources and ensures that wind energy remains an attractive investment.
CfD for new wind farms
An increasing number of investments in new wind farms are supported by contracts of difference (CFDs), which governments offer in their tenders for renewables. CFDs provide stable revenues for project developers at low cost to governments – because governments pay only when the price of electricity is below the auction price, but receive a payout when it is higher. CFDs also reduce financial costs, as a clear revenue outlook means that banks finance projects at favorable interest rates.
2021 was a record year for corporate renewable energy agreements (PPAs). 6.9 GW of new PPA deals were announced, increasing the total amount of renewable energy under the PPA by 58% in just one year to 18.8 GW. Wind energy was 60% of the new PPA capacity with 41 new PPAs for onshore wind farms and 11 for offshore wind farms.