The renewable energy sector in Europe enjoyed a strong year in 2015, which according to a recent EWEA report accounted for over 77% of new power plant installations (22.3 GW of a total 29GW of new capacity added). Based on this, I see the following as the key trends within the sector for 2016:
Move towards mainstream
Following the success of the COP 21 talks in Paris in December 2015 and the subsequent publication of the Energy White Paper by the Irish Government, more and more major companies will move toward renewable energy investing in projects, service and maintenance and value chain activities.
Wind and solar to drive growth
In 2015 wind power was the energy technology with the highest installation rate in Europe, being 12.8 GW or 44% of new installations. Solar came second with 8.5 GW or 29% of new installations. Stagnation of growth in certain markets shows the importance of a secure framework policy. With regulatory clarity and a secure framework policy there is potential for continued growth in both the wind and solar sectors.
Moving away from coal and oil toward renewables and electrical vehicles
With the continued and sustained slump in commodity prices, the economics of fossil fuel investments are becoming more challenged. As the cost of renewable energy technology reduces, investment in the sector becomes more attractive.
Having advised on 69.2MW of onshore wind transactions in 2015 and currently advising on over 100MW of onshore wind transactions, I have seen these positive trends borne out in Ireland. According to a recently commissioned report by IWEA, 224MW of capacity was installed during 2015 in onshore wind projects alone, representing investment of approximately €513m. Encouragingly it is currently predicted that close to 800MW of new onshore wind projects will get connected in 2016 and 2017. However most interesting for me will be how solar plays out in 2016 in Ireland.
Hopefully a stable government that is committed to this type of generation asset will shine a bright light for the solar sector will be elected!