The European Commission published plans to help finance sustainable growth on Thursday. These could help re-direct capital from conventional power plants to wind energy, according to WindEurope.
The Commission will propose draft legislation to create a checklist of green investments and financing activities. Regulators would then use this checklist to encourage banks to finance green projects, for example by easing capital requirements or having a label for sustainable financial products.
EU securities and insurance rules will also be revised so that sales advice on financial products takes into account a customer’s sustainability preferences. Asset managers and institutional investors will have to disclose how they consider sustainability in their strategy and investment decision-making process.
WindEurope CEO Giles Dickson said: “These new rules are good news as they’ll provide increased transparency for green investments. Investors will know what they are investing in. Investing in conventional power assets will also become more expensive due to the additional climate risk. This should help attract new investors and unlock new funds to invest in wind energy projects.”
“But at the same time it remains crucially important to de-risk wind investments by ensuring stable and visible government policies, for example through clear long-term planning of new capacity additions, well-designed auctions and protecting investments from retroactive policy changes”.
The news comes amid fears that progress of the wind sector was about to be threatened by the end of cheap finance. Iberdrola chief Ignacio Galan warned last week of the potential for an ‘Enron’ style financial disaster, particularly for newer entrants to the industry. However both the International Renewable Energy Agency (IRENA) and the Energy and Climate Intelligence Unit have pointed instead to a resiliency present in the sector, that should see it endure any such threat.
Renewables sector upbeat despite financial warnings