Two Spanish banks lead the European financing of wind energy. Banco Santander and CaixaBank registered in 2022 a market share of 8.4% and 5.7%, respectively, in terms of loans granted for new wind farms, acquisition of assets and refinancing of projects, according to the report ‘Financing trends and investment. The European wind industry in 2022′, prepared by the employers’ association WindEurope, which includes the Spanish companies Iberdrola, Repsol, Acciona Energía and Siemens Gamesa.
An example of financing in which the participation of both banks occurred at the beginning of last year in the agreement signed with EDP Renovables (EDPR). The entities chaired by Ana Botín and José Ignacio Goirigolzarri closed a contract, in which the European Investment Bank (EIB) also participated, for the development, construction and operation of six wind farms in Poland, totaling 149.4 MW of capacity of installation. In total, the Portuguese energy company was granted 144 million euros.
WindEurope data shows that investments in Europe in new onshore and offshore wind farms were in place in 2022, with the financing of 12 gigawatts (GW) of new capacity to be built in the coming years. According to the association, this is less than half the amount invested in 2021 and the lowest figure since 2009. On the other hand, 16.3 billion euros were allocated to asset purchases, in which investors get a part of a wind farm, whether in the development, construction or exploitation phase. In addition, 6,700 million euros of debt were refinanced.
Given the uncertainty generated by the energy crisis and Russia’s invasion of Ukraine, WindEurope warns that investors are delaying the signing of long-term debt, seeking to raise funds through other means, such as private equity or the sale of shares. Germany was the country that invested the most in new facilities in 2022 (2.3 billion euros), followed by Finland (2.1 billion). Next comes Poland, with a record investment of 1.9 billion euros.
1.2 million MW in Spain
The cost of capital per megawatt (MW) for new onshore wind farms fell between 2015 and 2021 from 1.9 to 1.3 million euros on average in Europe, but last year it grew again, up to 1.4 million . This is due to high commodity prices, supply chain disruptions, and high inflation. In Spain it stood at 1.2 million euros per MW. Under this scenario, the conditions for access to financing have also tightened. Interest rates have risen as central banks try to control the inflationary trend.
In the report, the employer also highlights that the banks provided 3.7 billion euros in non-recourse debt for the construction of wind farms, which is less than a quarter of the amount they gave in 2021 and the lowest amount since 2005. account the refinancing of projects, the amount was 10,400 million euros. The non-recourse debt is one in which a guarantee must be provided that can be seized in the event of default, although the lender cannot claim any additional compensation.
To meet the renewable energy target, WindEurope estimates that 440 GW of wind capacity will need to be installed by 2030. To achieve this, the EU needs to install 31 GW per year between 2023 and 2030. In the next five years, only 20 GW per year are expected to be built,” the employers’ association said. As La Información already published, the lack of turbine factories puts the expansive green route of the European Union (EU) at risk, for which the chain of supply “needs to grow urgently”.
Europe is home to some 250 production centers, which is 31% of the 800 that are operating worldwide. Germany and Spain are the best positioned countries, with 82 and 41 facilities, respectively. In addition, they are the only two in which all the pieces that make up a wind turbine are assembled. For its part, China is the main market with 45% of the centers (360). In this way, the employers request that under the Net-Zero Industry Law, which will be approved by Brussels to compete with United States subsidies, the rules for granting state aid be made more flexible and thus facilitate access to financing for the construction of new plants and infrastructure.