标普-2023 年可再生能源融资：释放“资本转型”（英）

S&PGlobal

RenewableEnergyFundingin2023:A“CapitalTransition”

Unleashed

September2023

Thisarticle,byS&PGlobalRatingsandS&PGlobalCommodityInsights,isathoughtleadershipreportthatneitheraddressesviewsaboutindividualratingsnorisaratingaction.S&PGlobalRatingsandS&PGlobalCommodityInsightsareseparateandindependentdivisionsofS&PGlobal.

|©2023S&PGlobal.Allrightsreserved.

Governmentsare

turningtocapital

marketsbecauseof

theimmensescaleof

investmentexpected

tobeneededinthe

comingdecades.

Authors

S&PGlobalRatings

TrevorD’Olier-Lees|GonzaloCantabranaFernandez|AneeshPrabhu|LauraLi|Pierre

Georges|EvanGunter

S&PGlobalCommodityInsights

PeterGardett|RogerDiwan|EduardSaladeVedruna|ChrisDeLucia

Contributors

AngelaLong|CarlaDonaghey

KeyTakeaways

–Manygovernmentsaroundtheworldhavebeenmakingprogressmobilizingpublicandprivatecapitaltoacceleratetheenergytransition,withsignificantmoneyinflowsintoprojectsinrecentyears.Theseinflowsarenecessarytomeetthetriplingoffundingneedsforlow-carbonprojectsacrosssectorsby2030tomeet2050net-zerogoals.

–TheseinflowsareparticularlypronouncedintheUnitedStates,Chinaandthe

EuropeanUnion–respondingtohigh-levelpolicygoals,yetexecutedthrough

distinctivefinancingchannels.Theseachievements,however,stillfallshortofwhatisneededtomeetnet-zerogreenhousegasemissionsgoalsaslaidoutintheParisAgreement–particularlygivenloweractivityoutsidethesekeyregions.

–Weseecapitalflowscurrentlystronglyfavoringrenewablepowergeneratingassets,namelywindandsolar,withlessfocuson,forexample,transmissionandstorage.

Thisdislocationbetweenpolicyintentandcurrentinvestmentislikelytoresultinintegrationbottlenecksanddysfunctioningenergymarketsunlessmarketdesignevolvesquickly.

–Adaptingpoliciesandregulationsalsocomeswithrisksfordevelopersandinvestors,withreducedvisibilityandpredictabilityinmarketforecasts.

Introduction

Nationalgovernmentsandglobalfinancialinstitutionshaveplacedcapitalallocation

attheheartoftheirenergyandindustrialpoliciestoaccelerateandshapetheenergy

transition.Governmentsareturningtocapitalmarketsbecauseoftheimmensescale

ofinvestmentexpectedtobeneededinthecomingdecades.Ititsestimatedthat

currenttargetsagreedtobytheworld’smajoreconomiesundertheParisAgreement

wouldrequireatleasttriplingofglobalenergytransitioninvestment(includingall

decarbonization)tomorethan$5trillioneachyearbetween2023and2050,well

beyondwhatgovernmentbalancesheetscanhandlealone.Investmentinrenewable

generatingassetsisakeypartofthetransition,withestimatedannualinvestmentof

$1.4trillion1through2050.

1.InternationalRenewableEnergyAgency(IRENA)WorldEnergyTransitionsOutlook2023,

.

CapitalTransitionUnleashed|2

ConservationandefficiencyRenewablepowergenerationPowergridsandflexibility

Electrification

FossilfuelssupplyRenewabletechnology

Greenhydrogen

Carbonremoval

Fossilfuelgeneration

Nucleargeneration

43

CurrentS&PGlobalCommodityInsightsInflectionsReferenceCaseforecastsexpect

$700billionperyearofrenewableenergyinvestmentthrough2050,whichmeansthat

theannualfundinggaptomeetthenet-zeromodeledtargetcouldbeaslargeas$700

billion.Theglobalrenewableenergyfundinggapisalsohighlyconcentratedinemerging

marketsduetohigherrisk,andhence,lowerappetitefrominvestors.Forexample,while

65%oftheglobalpopulationlivesoutsideofthemarketsinChinaplusthedeveloped

economiesasanalyzedinthispaper,cleanenergyinvestmentinthosesamecountriesis

only20%oftheglobaltotal.Incontrast,themarketsonwhichwefocusinthisreport—

theUnitedStates,EuropeandChina—donotfacethesamedegreeofunderinvestment

risk.Inthesemarkets,investmentcapitalismoreavailableandthefinancinggapis

smaller,albeitstillnotsufficienttomeettheregion’snet-zerogoals.Investmentsin

developedeconomiesaremorelikelytobeinvestmentgrade,andwheretheyfallshort

ofinvestmentgrade,sophisticatedlocalcapitalmarketsareabletocopewiththe

associatedrisks.Tospurgreenspending,governmentshaverolledoutnewincentives

throughdifferenttypesoffinancialmechanismsaimedatde-riskinginvestmentsand

reducingdecarbonizationcoststoboostcapitalavailabilityandallocations.Suchpolicies

haveevolvedovertime.IntheUSandEurope,historically,therewasaninitialbiastoward

renewablepower(renewableportfoliostandards,governmentofftakecontractsand

feed-intariffsinEurope,andinvestmenttaxcredit/productiontaxcreditintheUS)and

nowfinallytowardindustrialdecarbonization(intheUS,theInflationReductionActof

2022[IRA];inEurope,thechangeofEmissionsTradingSystemrulesandauctionsfor

hydrogenandcarboncaptureandstorage).TherearesomedifferencesbetweentheUS

andEuropeanpolicies.IntheUS,theIRAgivestaxcreditstoavarietyofprojectsand

investors,whocanpickwheretheywanttodirecttheflowoffunds.Incontrast,thereis

lessflexibilityinEuropebecausethepolicyframeworkandincentiveforeachinvestment

typeisquitedifferent.

1.5°Cscenarioinvestmentrequirements,aggregate,2023–2050($T)

39

22

16.6

12

6

4.7

3

1.9

1.6

DataaccessedJuly28,2023.

Source:InternationalRenewableEnergyAgency(IRENA)WorldEnergyTransitionsOutlook2023.

©2023S&PGlobal.

CapitalTransitionUnleashed|3

PolicyframeworksandincentivesinChina,theEuropeanUnionandthe

UnitedStates

EconomicblocPolicyIncentivetypeEnergysector

beneficiaries

China

14thFive-YearPlan

Targets,varioussoftincentives(e.g.,cheapfinancing,land)

Utility-scale

renewables,grid

expansion,storage

EuropeanUnion

REPowerEU

Targets,state-backedloans

Renewables

Fitfor55

Targets,state-backedloans

Renewables,

hydrogen,efficiency

InflationReduction

Actof2022

CHIPSActof2022;

AmericanJobsPlan

of2021

Taxcredits,loanguarantees

Energytransitionassets

Taxcredits,grants

Renewables

US

AsofJuly28,2023.

Source:S&PGlobalCommodityInsights.

©2023S&PGlobal.

Policiesarehavingunintended

consequences

However,relyingonprivate-sectoractorstoultimatelymakeinvestmentdecisions

istransformingexistingmarketstructuresandbusinessmodelsinwaysthatwere

notnecessarilyenvisioned.Governments,forinstance,mightnothaveexpectedthe

marketresponsetobesoheavilytiltedtowardinvestmentsingeneratingassets,

particularlysolarphotovoltaic(PV)assets.Thosetechnologiesandmarketsareprimed

forprivate-sectorinvestmentinwaysthattechnologiesforindustrialdecarbonization

suchasgreenhydrogen,anothermajorgoalforpolicymakers,arenot.Insomeways,it

isunderstandablethatassetmanagersaredirectingtheirfundsintogeneratingassets

(particularlysolarPV).SolarPVhasgenerallybecomeabankable,proventechnology

andoperatesundercontractsorfeed-intariffs,generatingsteadyreturns.However,

thepronouncedinfluxofcashintorenewableswilllikelyhavedisruptiveimplicationsfor

existingpowerandfuelmarketsthatarelikelytobecomesignificantovertime.

CapitalTransitionUnleashed|4

33.6

9.7

9.2

8.1

6.8

Privatecapitalenergytransitioninvestmentbysegment,

August2022–June2023($B)

59.5

Renewableelectricityproduction

Governmentpolicies

suchastheIRAand

RePowerEUhave

providedadegreeof

policyandregulatory

certaintytofinancial

investors.

Advancedmanufacturing

Industrialdecarbonization

Digitalenergymanagement

Energystorage

Hydrogen/RNG/SAF

AsofJuly28,2023.

RNG=renewablenaturalgas;SAF=sustainableaviationfuel.

Source:S&PGlobalCommodityInsights.

©2023S&PGlobal.

Eachmajoreconomicblocandeachcountrymayhavetakenaslightlydifferent

approachtoleveragingglobalfinanceandcapital,buttheglobalsimilaritiesaremore

strikingthanthenationalorregionaldifferences,withgovernmentsdrawingfrom

thesametoolkitofsolutions(seethetable“Policyframeworksandincentives”).The

emphasisintheUSIRAtowardincentivestounlockcapitalallocationhasinitiateda

racetoprovideinvestmentopportunitiesacrosstheworld.Onedifference,though,is

thattheUSandEuropeareseedingnewandgreenfielddevelopmentoflocalsupply

chains,whereasChinaisbothdefendingandexpandingitssupplychains.

Theaccelerationofthisprocessbuildsuponanexistingtoolkitestablishedandnow

maintainedbyfinancialinstitutions,bothpublicandprivate,andfinancialregulators,

bothnationalandglobal.Financialandcapitalfirmshavecarvedoutasignificantrole

asthemarketmakersoftheenergytransitionbyenablinggovernmentsandcorporate

sectorstomeasuretherisksofclimatechangeaschanneledthroughfinancialasset

pricing,andtosupportinvestmentopportunitiesindecarbonizedenergyandelectrified

infrastructure.GovernmentpoliciessuchastheIRAandRePowerEUhaveprovideda

degreeofpolicyandregulatorycertaintytofinancialinvestors.Theseinvestorstook

theinitiativetomaptheimplicationsofclimate-changeriskandassessthepotentialof

newtechnologiestoshiftassetpricing,andnowgovernmentsarerelyingonthoseearly

effortsaspathwaystoreshapingenergypolicy.Whileactivistgroupsandothersprimed

theseframeworks,increasinglyitisbanksandinstitutionalinvestorsthatarecreating

thedatastreams(e.g.,pricingandemissionsanalysis),frameworksandstrategic

playbooksforbothupgradinganddecarbonizingindustrialeconomies.

CapitalTransitionUnleashed|5

Newinvestmentinenergytransitionbycapitaltype($M)

PrivateequityandcreditPublicequityVenturecapitalDebt

25,000

22,500

20,000

17,500

15,000

12,500

10,000

7,500

5,000

2,500

0

Feb.2023

April2023

Oct.2022

Sept.2022

Jan.2023

March2023

Nov.2022

Dec.2022

May2023

June2023

Aug.

2022

AsofJuly28,2023.

Source:S&PGlobalCommodityInsights.

©2023S&PGlobal.

Regionalfocus

Inexaminingtherapiddeploymentofrenewablepowerproductioncapacityinresponse

topolicychanges,whilethereareglobalsimilaritiesintheapproach,thereremain

importantregionalvariationsinthemechanismsbywhichcapitalisallocated.

Differentwaysofstructuringaccesstocapital,thevarietyoffinancialinstitutions

ineacheconomicbloc,andtheregulatorycontextinwhichinvestorschanneltheir

fundstonewprojectsallmeaningfullyimpactthecharacterandspeedoftheglobal

renewablepowerrollout.

Liketheirglobalcapitalmarketscounterparts,majoreconomicblocshavereliedonthe

toolsavailabletothem,ofteninwaysthatalignwiththekindsoffinancialinstitutions

thatfacilitateinvestmentsintheirnationalmarkets.

AsweturntoexaminethecapitaltransitioninChina,theEuropeanUnionandthe

UnitedStates,thestrikinglydifferentwayseachmarketfundsrenewablepower

additionsinresponsetosimilarnet-zeropolicychangesprovidesamoredetailed

understandingoftheemergingfundinggap.

CapitalTransitionUnleashed|6

(Trillionrenminbi)

(%)

China’sgovernment-ownedfinancialinstitutionsarecentral

totheenormousrenewablerollout,butprivatefundingis

ultimatelyneededtomeetgoals

China’senergytransitionwillrequireasubstantialincreaseininvestmentoverthenext

fewdecades,eventhoughitalreadyaccountedfornearlyhalfoftheglobalenergy

transitionsectoralspendingin2022.China’sprimaryenergymixcurrentlyremains

highlyreliantonfossilfuelsanddemandisexpectedtocontinuetogrow,implying

alongperiodofmassivefundingisnecessarytobuildupa“modernenergysystem”

thatisnon-fossildominatedbyaroundmidcentury.China’spowersectoristakingthe

leadalongsidethistransitionthroughacceleratedinvestmentsmainlyinrenewables

generationcapacity,powergridsandenergystorage.

Greatercontribution

fromtheprivatesector

wouldbenecessary

toachieveChina’s

ambitiouscarbon

neutralitygoal.

Chinaappliestop-downpolicydecisionsandmechanismsforthisimmensegovernment

ambition.Itscentralandkeylocalstate-ownedenterprisesdominateinvestmentsin

thepowersector.Theirstrengthsarebasedoncontinuousgovernmentsupport(both

operationallyandfinancially)anddecentcapabilityforlargeprojects(suchasutility-

scalerenewablesandbighydro).Thefinancialsystemessentiallyisunderstatecontrol

anddominatedbystate-ownedbanks.

GreatercontributionfromtheprivatesectorwouldbenecessarytoachieveChina’s

ambitiouscarbonneutralitygoal.Policymakershavebeentryingtopromoteprivate

investment,yetincentivesforprivatecapitalandappropriateregulatoryframeworks

wouldneedtobeexpandedthroughdeepeningmarketreform.Privatecapitalis

constrainedinasmallportionofcommerciallyviableprojects.Publicfinancecontinues

toplayacentralroleinthemajorityofprojectsandinnewenergytechnologyinnovation.

Mostofthefundingisraiseddomestically.Ahighpercentagecomesfromstate-owned

banksandnationaldevelopmentfinanceinstitutions.Chinesecompaniesfavordebt

financingaslendingrateshavebeenkeptatlowlevelstoboosttheeconomy,and

renewablesprojectscanaccesspreferentialrates.Asoneofthelargestgreenfinance

markets,China’sgreenloanbookforcleanenergyprojectsgrewsharplyby32%-35%

yearoveryearduringthepastfewyears,attaininganoutstandingbalanceof6.8trillion

renminbi($954billion)asofJune2023(seethechart“China’sgreenloanbookforclean

energyisgrowingvigorously”).ChinaunveileditsGreenBondPrinciplesinJuly2022,

attemptingtoadoptgloballyacceptednormstoattractawiderpoolofcapital.In2022,

overhalfofitsgreenbondissuanceproceedswereusedforcleanenergy.

China'sgreenloanbookforcleanenergyisgrowingvigorously

Year-over-yeargrowth(%)

Greenloanbalanceforcleanenergy

(trillionrenminbi)

8

7

6

5

4

3

2

1

0

40

30

20

10

0

201820192020202120221H2023

AsofAug.29,2023.

1H=firsthalfofyear.

Sources:Wind,People'sBankOfChina;S&PGlobalRatings.

©2023S&PGlobal.

CapitalTransitionUnleashed|7

Inthe10monthssincethepassageoftheIRA,privateequityfirms

havecommittedmore

than$100billionto

newrenewableenergyinvestmentsthatwouldqualifyfortaxcreditsinthenextsixyears.

AsChina’spowermarketreformdeepens,renewablepowerwillseegrowingmarket-

basedtrading,sothatpricescanfluctuatemorefreelybasedonmarketconditions,

meaningpossiblefuturereturnvolatilitytoo.Thismayhelpimprovepowersystem

flexibilityandrenewableenergyintegration,aswellasreducegenerationcapacity

reserve.Chinaisestablishinga“unifiednationalenergymarket”designedtocontribute

tocontinuedstrengtheningcross-regionalpowertrading,localpowermarkets

coordinationandancillaryservicesexpansion,by2030astargeted.China’sRenewable

EnergyLawandsupportingpolicies,suchastaxbreaksandprioritizedpurchasesof

renewableenergy,willremaininstrumentaltoenablethehighgrowthofinvestment.

Renewablesrepresentsignificantlyhighershareofcapacitythan

consumptioninChina(%)

Solar&windshareof

generationcapacity

Solar&windshareof

powerconsumption

50

40

30

20

10

0

20192020202120221H2023

AsofAug.29,2023.

1H=firsthalfofyear.

Sources:Wind,NationalEnergyAdministrationofChina;S&PGlobalRatings.

©2023S&PGlobal.

NewlawsintheUShaveunlockedasignificantflowof

fundsintosolarPVassetsthatisincreasinglynegativefor

powermarketsandputsgreateremphasisonstorageand

transmissionneeds

IntheUS,thefederalstructurelimitsthedegreetowhichcentralgovernment

mandatescandirectlyshapeenergyinvestment.AtriooflawspassedbytheUS

CongressandbeingimplementedbytheBidenadministrationhavethepotentialto

collectivelydrivewellover$1trillionininvestmentcapacitytoenergytransitionassets,

buttheyrelyonstateandlocalgovernments,companiesandcapitalmarketstoselect

howthatfundingisallocatedandused.

WhiletheAmericanJobsPlanandtheCHIPSActbothcontainextensivefundingfor

energytransitionassets,itistheIRAthatmostclearlyunleashestheprivatesector

tofreelydirectinvestmentthatcanqualifyforafter-the-factincentives.IntheIRA,

USpolicymakershaverevisedthetaxcodetorewardenergytransitioninvestmentno

matterwhichcompanyundertakesit.

Theresultingrushofinvestmentandcapitalcommitmentshasattractedglobal

attention.Inthe10monthssincethepassageoftheIRA,privateequityfirmshave

committedmorethan$100billiontonewrenewableenergyinvestmentsthatwould

qualifyfortaxcreditsinthenextsixyears.Thatnewdeploymenthasthepotential

totransformtheUSpowermarketswithmorethan350gigawatts(GW)ofnew

generatingcapacity,anditisontopoftheroughly$120billioninnewcorporatecapital

commitmentsthatgenerallycarrylongerdeploymenttimelines.

CapitalTransitionUnleashed|8

Newrenewableenergyandenergystorageprojectcommitments

intheUSbyprivateequityandutilities(GW)

PrivateequityUtilities

27.2

11.212.3

72.8

11.7

41.139.7

25.1

10.1

4.2

17.9

3.6

9.1

2.6

8.8

1.2

9.5

41.1

Sept.

2022

Oct.

2022

Nov.

2022

Dec.

2022

Jan.

2023

Feb.

2023

March

2023

April

2023

May

2023

AsofJuly28,2023.

GW=gigawatts.

Sources:S&PGlobalCommodityInsights;S&PGlobalMarketIntelligence.

©2023S&PGlobal.

Whenaddedtotheloanguaranteesandgrantsavailablethroughallthreelaws,

thefederalgovernmenthasmatchedstate-levelmandatesandprogramswith

unparalleledlargessethatrewardsablendofreshoredmanufacturingcapacityand

newenergyinfrastructureinvestment.Whiletheresultingdealflowisfrontloadedinto

incorporatingrenewableenergyintotheUSpowersystemandassociatedadvanced

manufacturing,industrialdecarbonizationeffortslinkedtohydrogenproductionand

Thewaveofnew

investmentin

renewablepowerassetsisacceleratingfaster

thanthebroadercapitalmarketfundingof

investmentinenergy

storage.

carboncaptureutilizationandstorage(CCUS)projectbuildoutsarerapidlyapproaching

financialcloseandthestartofconstruction.USprivate-sectorcommitmentstoCCUS

projectsin2023amounttoroughly$3.4billion,lessthan5%oftheroughly$120billion

committedtoUSrenewableenergybuildoutbyprivate-sectorinvestorsandcompanies

thisyear.

Thewaveofnewinvestmentinrenewablepowerassetsisacceleratingfasterthan

thebroadercapitalmarketfundingofinvestmentinenergystorage.Amongprivate

capitalplayers,theproportionsaremorebalanced,partlybecausethoseinvestors

aredeployingassetsinmarketswhereenergystorageisrewardedinmarketdesign.If

theseassetsareincreasinglyexposedtomarketprices,therecouldbeacompounding

adversecreditimpactwithpricecannibalizationoccurringduringperiodsofexcess

generation.Peakgenerationofrenewablepower,particularlysolar,isnotalways

alignedwithpeakdemand.IntheUS,thisimpactismostnotableintheduckcurvefor

powerpricesinCalifornia,whichsignifiesproblemsforthegridandcurtailmentofsolar

generation.Intheabsenceofasimilarboomofinvestmentinstorageandtransmission,

therisksofgridinstabilityandpricingcannibalizationwillincreasebothattheglobal

andUSlevel.

CapitalTransitionUnleashed|9

TheEUassumesthat

renewableswillneedtodeliverapproximately70%ofthepower

tomeettheoverall

renewableenergytargetby2040.

Totalglobalcleantechspending,2022–2023($M,real2022)

6%

7%

23%

4%

Energystoragecomprises

only7%oftotalplanned

cleanpowercapex

through2030

26%

20%

14%

AsofJuly28,2023.

PV=photovoltaic.

■SolarPV(utilityscale)

■SolarPV(distributed)

Onshorewind

Offshorewind

Otherrenewables

Energystorage

Hydrogenproduction

Source:S&PGlobalCommodityInsights,CleanEnergyTechnology(CET)—GlobalCleanEnergyTechnologyMarket

Outlook2023.

©2023S&PGlobal.

Byfocusingonenergysecurityandlowerprices,Europe

hasbeenbuildingrenewablegeneratingassetsfasterthan

supportingtransmissionandstoragecapacity

TheEuropeanenergycrisishasacceleratedtheconsensusandimpetusforthe

developmentofrenewables,withever-highergoalsofachieving1,200GWofinstalled

renewablescapacity(i.e.,windandsolar)by2030comparedwith513GWin2021.

Environmentalconsiderationsarenolongertheonlymotivationforrenewables

development;keepingpowercostsdownforconsumersandensuringsecurityofsupply

fortheEUarenowvitalpriorities.Suchconcernshavematerializedintherevisedand

verychallenginggoalsetbytherenewableenergydirectivetoproduce42.5%-45.0%

oftheenergysupplyusingrenewablesby2030.TheEUassumesthatrenewableswill

needtodeliverapproximately70%ofthepowertomeettheoverallrenewableenergy

targetby2040.Acceleratingrenewablesgrowthwillrequiremorethangoalsand

subsidies,andaseriesofnonfinancialcomplexitiesandhurdlesmustbeovercome.

Inthepastyear,theEUhasproposedareviewofthebloc’senergymarketdesignandis

closetoanagreement.Amongotherchanges,itwillconfirmthatrenewableprojectsin

Europecanchooseoneofthreebusinessmodels:

—Operateasamerchantasset

—Sellpowerunderapowerpurchaseagreement(PPA)

—Participateinauctionsandreceiveagovernmentcontract

CapitalTransitionUnleashed|10

Europeaimsoverthe

comingdecadeto

reinforceitssupply

chainandrevert

anegativetrend

cementedoverthe

previousdecade.

ThenoveltyoftheagreementliesinthefactthattheEUwillrequireprojectswith

governmentsupportorsubsidiestoincludetwo-waycontractsfordifferences(CFDs)

insteadofone-waycontractsthatprovideunilateralprotectiontothegenerator.In

practice,mostnewrenewablesprojectsponsorswillingtocontracttheirrevenues

wouldoptforcontracts(eitherCFDsorPPAs)thatprovidethelong-termvisibility

requiredtoobtainfinancing2,oralternatively,merchantcontracts.Nonfinancial

challengesstemfromthelengthypermittingprocessintheEU,agrowingshortage

ofgridcapacityandbottlenecksintheglobalsupplychain.AcrossEurope,ittypically

takesbetweenthreeandsixyearstogetaprojectfullypermitted,aswellasthegrid

connection,andthetimelineisoftenlongerinthecaseofwindpower.Thisprotracted

processmateriallylimitsthemarket’sabilitytodeploynewrenewablesatscaleandat

paceovertheshorttomediumterm.

Evolutionofmanufacturingcapacitysharebyregion,2022to2026(%)

ChinaEuropeNorthAmericaRestofWorld

20222026

20222026

20222026

20222026

20222026

SolarPV

Onshorewind

Offshorewind

Batteries

Electrolyzer

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

AsofSept.1,2023

H2=hydrogen;PV=photovoltaic.

Source:S&PGlobalCommodityInsights.

©2023S&PGlobal.

Europeaimsoverthecomingdecadetoreinforceitssupplychainandreverta

negativetrendcementedoverthepreviousdecade.AccordingtotheInternational

EnergyAgency,Europe’sshareinallthemanufacturingstagesofsolarpanels(suchas

polysilicon,ingots,wafers,cellsandmodules)declinedfrom20%in2010to8%in2021.

Incomparison,China’sshare,whichwas29%in2010,jumpedto80%by2021.Thecost

todeveloprenewables,afterfallingforadecade,begantoincreasemateriallyinEurope

fromthesecondhalfof2020,whichwasthencoupledwithhigherinterestrates,

pressuringtheeconomicsofprojectsthathadalreadylockedinofftakecontracts.

However,thecostappearstohavepeakedalreadyandwilldecline.Thus,inourview,

whereastheEUandmemberstates’governmentscandolittletomitigatetheimpacts

ofsupplychainissuesandofinflationandinterestratesontherenewablescapacity

buildup,creditriskswouldbemitigatedtosomeextentfromimprovedvisibilityonthe

marketstructure,keepingcertainprotectionsonpricefloorsforrenewableprojects

and/orimprovingthepermittingprocessesandtimings.

2.Forfurtherinformationonthistopic,pleaseseetheS&PGlobalCommodityInsightsreport“

EU’sProposedEnergy

MarketRedesignMitigatesMerchantRisksandAcceleratesRenewables

,”publishedApril3,2023.