Just in time for the fourth Renewable Energy Industry Day, the consulting firm Rödl Partner has published a study on financing renewable energy in international markets. The study explains how the underlying conditions in 17 international markets differ due to legal and economic circumstances.

For the study, Rödl Partner interviewed experts at its various subsidiaries on how they assess market entry opportunities, investment opportunities and framework conditions for renewable energies in their regions. The authors focused primarily on the following areas: political development goals, the degree of liberalisation of the market for renewable energy production, current consumer prices, the legal framework for investment decisions, the existence of funding systems, security of investment, financing conditions for investments, and the political and social acceptance of renewable energies. The study also includes a market assessment by the Unicredit Group.

Renewables at a disadvantage regionally, but on the rise globally

Although renewable energies are advancing globally, a very heterogeneous field has emerged in recent years due to different funding systems and legal requirements for renewable energies. While countries such as China and the United States continue to press forward with the expansion of renewable energies, financial and political support have waned drastically in some existing core markets. Examples of this are the retroactive cuts in feed-in tariffs in Italy and Spain as well as the EEG reform in Germany.

If one looks at global capacity growth, one can see that more renewable energy power plants were built in 2013 than conventional power plants for the first time. The main reason for this is that renewable energy is now often in the lead with low production costs, predictable operating costs and falling capital costs for new projects.

The energy turnaround is being implemented at different speeds in different countries

«Investments are being made in countries and energy areas where the legal and economic conditions are reliable and planning certainty can be provided. The more complex the funding systems are, the stronger the energy turnaround is being slowed down,» explains Anton Berger, Head of Energy at Rödl Partner.

Compared to 2012, the capacity of installed renewable power plants rose by 8% to a total of 1,550 GW. The amount of electricity from wind, solar, bioenergy, hydropower and geothermal sources increased by 5% to 5,050 TWh. This required investments of approximately € 185 billion in systems in 2013.

«The conditions for investors in the renewable energy sector are completely different in each country. Within individual countries, the conditions are often different depending on the type of energy source. One can find anything from feed-in tariffs to public tenders for subsidies for independent power producers (IPP). The clearer the conditions are, the better the chances of countries are to attract investors,» says Kai Imolauer, Associate Partner in the energy business area. «In countries such as Chile or the United States, new technologies can hold their own even without subsidies; they participate directly in the electricity trading venues.»

Tanja Peschel