Funding issue looms for EU wind power

EU Wind Power Installations are set to reach 10 GW, boosting total capacity toward 85 GW, with offshore wind growth, renewable energy demand, and improved project finance led by banks and the European Investment Bank.

Investment in new European wind farms is likely to hold steady in 2010, adding a further 13 percent to capacity, but funding problems cloud the outlook, the European Wind Energy Association EWEA said.

The group expects 10 gigawatts GW of new wind generating capacity to be installed in the European Union this year, compared with 10.2 GW last year, taking total capacity to around 85 GW.

"We predict another strong year for wind turbine installations in Europe," EWEA Chief Executive Christian Kjaer told reporters, citing wind investment levels in the region today.

"In Spain, we expect installations to decline quite dramatically, but that is likely to be compensated predominantly by installations in new European member states, led by Romania and Bulgaria," he added.

Wind power's previously explosive growth appears to have leveled off in Europe, despite European wind potential remaining far above demand today.

But the group said it was significant that part of this year's growth was based on orders placed since the start of the financial crisis — proving the sector's resilience.

Offshore wind capacity, buoyed by offshore wind growth, looks set to advance strongly with about 1 GW of capacity installed at sea this year, compared with around 577 megawatts in 2009. But funding remains an issue.

"Order books were really a problem in the second half of 2009, mostly because it was very difficult for project developers to get finance," said Kjaer.

"Orders are picking up with more availability of capital — project finance, but also bank lending," he added. "Where we are still seeing problems is very large projects, in particular offshore wind farms."

"There is still a reluctance among financiers to do syndicated loans. This is where the European Investment Bank has been stepping up lending, as major European lenders remain supportive today. That's been desperately needed."

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