Why record wind capacity investments alone are not enough – WindEurope

The capital is there. It's permitting that is holding up wind power expansion in Europe, trade body warns

The UK (€9.4 billion) invested the most in new wind farms last year, with offshore wind receiving the most of this outlay (pic credit: Alan O’Neil/Equinor)
The UK (€9.4 billion) invested the most in new wind farms last year, with offshore wind receiving the most of this outlay (pic credit: Alan O’Neil/Equinor)

Investors backed a record 19GW of new EU wind power capacity last year – but this is still short of the roughly 30GW needed to be installed each year between 2021 and 2030 to meet the EU’s 40% renewable energy target, trade group WindEurope warned.

In total, investors spent €29 billion — €21.2 billion on onshore wind and €7.8 billion on offshore wind — on new wind power capacity in 2021 (see below), according to WindEurope’s Financing and Investment Trends 2021 report.

Investment in new wind farms in the EU 2012 - 2021 (GW and €bn) (source:WindEurope)

These investment totals backed 16.8GW of new onshore wind and 2.2GW of new offshore wind capacity in the EU.

The industry group’s analysts saw another strong year for power purchase agreements (PPAs) tied to wind farms – but did not state how much wind capacity was contracted through such deals.

They concluded that investor confidence in wind power remains very high, despite challenges posed by the coronavirus pandemic, Russia’s war in Ukraine and supply chain shortages.

The report stated: “Wind energy remains an attractive investment, and there is plenty of capital available to finance it. 

“But it is critical that governments tackle existing bottlenecks in project pipelines, by improving and simplifying permitting procedures, so that Europe can meet its climate targets and reduce its dependence on imported fossil fuels from Russia and elsewhere.”


Across Europe — including non-EU member states – €24.8 billion was invested in new onshore assets (the highest sum since 2016), and €16.6 billion in new offshore assets. These totals will help to support 19.8GW of new onshore and 4.8GW of new offshore wind capacity.

The €1.3m/MW capital expenditure for onshore wind was the technology’s lowest European Capex on record. Meanwhile, new offshore wind had a capex of €3.5m/MW for 2021.

Market concentration

New European wind farm investments were concentrated in individual markets as well as in regions.

Three countries accounted for more than half of total European wind power investments last year: the UK (€9.4 billion) invested the most in new wind farms, followed by Germany (€8 billion) and France (€4.6 billion) — with a large proportion of this funding going to offshore projects (see below). Record amounts were invested in new wind farms in Sweden (€3.2 billion), Finland (€1.6 billion) and Lithuania (€400 million), while Spain had its highest total investments (€3.2 billion) since 2009 (see below).

Investment in new wind farms per country in 2021 (€bn) (source:WindEurope)

All investments in new offshore wind farms were concentrated in just four markets: the UK (€8.8 billion), Germany (€4.9 billion), France (€2.2 billion) and Denmark (€700 million).

Meanwhile, northern and western Europe accounted for €30.9 billion of the investments in new wind farms, or around 75% of the total.

Market confidence

Interest rates remain low, but supply chain shortages and high energy prices have caused market turbulence, WindEurope noted.

The trade group fears there could be interest rate hikes for 2023, which would affect the wind sector in the same way as other sectors, a spokesman added. The European Central Bank (ECB) said it would scale back its quantitative easing programme but ruled out any interest rate increases in 2022. However, this was before the outbreak of the war in Ukraine, WindEurope noted. 

Its analysts see the war in Ukraine pushing up inflation and weakening growth by disrupting trade. They see market movements indicating that investors believe that the ECB and other central banks will tighten monetary policies more slowly than previously anticipated.

Overall, WindEurope analysts believe the conditions for financing wind farms should remain favourable in the medium term. A spokesman added that wind power’s “long-term plannability and stable returns” make it a good investment, including relative to other sectors.

WindEurope warned that permitting — not the availability of capital — remains the main bottleneck for financing and building new wind farms in Europe.

“Assuming governments design their wind energy auctions in the right way, the financing of new projects will not be a problem,” WindEurope said. “The problem is the number of new projects coming through. Tackling permitting delays is a key priority.”

To do this, governments must simplify the rules and procedures for project permitting and boost staff numbers in authorities responsible for permitting, WindEurope added.

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