E.U. Wind Investors Call for Protection
Industry association WindEurope has issued a statement signed by 11 companies calling for investment protection for renewable energy projects in Europe. Signatories include Acciona, Allianz, Commerzbank, EDPR, Enel Green Power Gamesa, ERG, E.ON, HgCapital, Rabobank and RES Group.
While the industry acknowledges the need to adjust regulatory frameworks over time to respond to declining technology costs and market developments, the signatories say that retroactive changes are a misguided answer. They erode investor confidence in an industry where costs are sunk from the moment of the investment and there is very limited ability to improve profitability thereafter.
Any regulatory change should be concerted, non-retroactive, non-discriminatory and avoid any legal gaps that would undermine investor certainty.
The sector has seen many examples of sharp policy reversals since 2011. These range from retroactive tariff cuts for existing investments in Spain, Romania, the Czech Republic, Greece, and Italy, to abrupt policy reversals and rapid withdrawal of support to projects under construction or development in Finland and Poland.
The signatories call on the E.U. to take the following steps to promote investment in E.U. infrastructure and help ensure a sustainable flow of competitive, long-term capital:
1. Introduce a permanent dispute settlement mechanism independent of national courts and enshrined in the E.U. Treaty with protection against expropriation, discrimination and breach of legitimate expectations.
2. Integrate a grandfathering principle in the post 2020 Renewable Energy Directive to prevent retroactive changes and guarantee the economic viability of existing assets.
The statement is available here.