The financial crisis: what now for wind energy?
In September 2008 Lehman Brothers collapsed, triggering a financial crisis that battered industries worldwide. How has the crisis impacted the wind energy sector, and what happens now?
One of the immediate impacts of the crisis on the sector was the banks’ increasing reluctance to lend, especially the long-term loans needed by the wind industry. They also took on less project risk, which particularly affected big offshore projects, where banks had traditionally shared risk between themselves.
Fortunately for wind energy developers, the missing bank finance was partially replaced by increasing contributions from investors like power companies with strong balance sheets, and institutional players such as the European Investment Bank (EIB).
Indeed, the installation figures for 2008-9 show a healthy sector with impressive growth, although the time delay of up to two years between ordering turbines and their delivery means 2010’s figures will be the most revealing about the health of the sector in 2008-9.
At the moment, the situation appears to have improved slightly, with banks starting to lend to wind energy projects again, but it is unlikely that conditions will ever revert to those of the heady days of 2007-6, which was a time of unprecedented – and unsustainable, as we now know – boom.
The full article appears in the latest Wind Directions.
By Sarah Azau