An EU guarantee programme could significantly reduce financing costs related to developing Europe’s renewable energy potential and enable further penetration of renewable energy in central and southeast Europe, German think tank Agora Energiewende, promoting energy transition, has supported in a study.
The group’s proposed European Renewable Energy Cost Reduction Facility would enable EU member states with high investment risks, such as Greece, to achieve national targets as their risk levels would be restricted to levels such as those of Germany and France.
This risk reduction would be achieved by shifting the enforcement risk for a specific tariff commitment from the renewable energy project developer to the EU Cost Reduction Facility.
Agora Energiewende proposes introducing this facility in 2020 with EU budget support. The proposal is timely as the European Commission, in a few months from now, will need to set EU budget priorities for 2020 onwards.
The program would help evenly spread RES cost reductions throughout Europe and prevent inequalities in the sector’s future development.
The proposal is particularly important for Greece, a country whose capital costs, for the wind energy sector, stood at 12 percent in 2014, the EU’s highest rate, according to the German thinktank’s data.
The Greek economy may now be more safely positioned but the country’s investment risk level definitely remains higher than those of other EU member states.