Press releases

Mapping the cost of capital for renewable energy investments in the EU

Published: 10/02/2016

Brussels, 10th of February 2016 –The weighted cost of capital significantly varies across the European Union, amounting to 3.5 percent in Germany and 12 percent in Greece in 2014. These are the findings of the ‘DiaCore project’, funded by the Executive Agency for Small and Medium Enterprises (EASME). The research was led by Ecofys, Fraunhofer ISI, eclareon, EPU-NTUA, TU Wien and LEI. The project team is the first to estimate the costs of capital for onshore wind energy projects across the 28 EU Member States.

The European Union has set itself a binding target of “at least” 20 percent renewable energy in final energy consumption by 2020. To meet this target, 60 to 70 billion euros annual investments are needed[1]. Renewable energy technologies are capital-intensive, hence the cost of capital plays an important role in investment decisions and costs of target achievement.

The cost of capital is determined by the cost of debt and the cost of equity. In 2014, the cost of equity for onshore wind projects ranged between 6 percent (in Germany) and more than 15 percent in Estonia, Greece, Latvia, Lithuania, Romania and Slovenia. The cost of debt varied between 1.8 percent in Germany and 12.6 percent in Greece. This results in weighted average cost of capital (WACC) ranging from 3.5 to 12 percent.

There is a growing gap among EU Member States on the financing of renewable energy projects. From the very start of a project, project developers in the EU do not face the same financing conditions. Why does the cost of capital vary so much? Because of the risks for investors: if an investment is risky, the cost of capital increases”, explains Ecofys Principal Consultant David de Jager.

Based on interviews with more than 110 banks and project developers in the EU, the consortium finds that next to the generic country risk, the main risk for investors in renewable energy is the policy-induced risk, hence the design and the reliability of renewable energy support. Unstable policies, such as sudden retroactive changes, automatically increase the cost of reaching renewable energy targets.

Calculations based on the Green X Model show that if all countries would have the same renewable energy policy risk profile as the best in class, the EU Member States could reduce the policy costs for wind onshore by more than 15%. A reduced country risk could lead to greater savings.

The report can be downloaded at DiaCore webpage.

[1]Financing Renewable energy in the European Energy market, Ecofys, Ernst & Young, Fraunhofer ISI, TU Vienna, 2010

Note to the editor, not for publication:

Characters with spaces: 2,619

Expert contact: David de Jager,, +31 30 662 3388

About the DiaCore Project

The aim of the DiaCore project is to ensure a continuous assessment of existing renewable energy policy mechanisms and establish a stakeholder dialogue on future policy needs. DiaCore aims specifically to:

  1. Facilitate convergence in RES support across the EU
  2. Enhance investments and coordination between Member States (MSs).

DiaCore will complement the EC’s monitoring activities of MSs progress towards 2020 and builds on approaches applied in previous IEE projects (OPTRES, RE-Shaping).

It offers detailed cross-country policy evaluations, presented in an interactive RES policy database. Future consequences of policy choices were analysed using the Green-X model, highlighting policy needs for 2020 target achievement and contributing to 2030 discussions.

A key focus of the project is how to improve the conditions for financing RES investments.

Established in 1984 with the mission of achieving “sustainable energy for everyone”, Ecofys has become the leading expert in renewable energy, energy & carbon efficiency, energy systems & markets as well as energy & climate policy. The unique synergy between those areas of expertise is the key to its success. Ecofys creates smart, effective, practical and sustainable solutions for and with public and corporate clients all over the world. With offices in Belgium, the Netherlands, Germany, and the United Kingdom, Ecofys employs over 200 experts dedicated to solving energy and climate challenges.

Contact: Marielle Vosbeek, Ecofys Press Office,, +31 30 662 3402

Fraunhofer ISI
The Fraunhofer Institute for Systems and Innovation Research ISI analyzes the origins and impacts of innovations. We research the short- and long-term developments of innovation processes and the impacts of new technologies and services on society. On this basis, we are able to provide our clients from industry, politics and science with recommendations for action and perspectives for key decisions. Our expertise is founded on our scientific competence as well as an interdisciplinary and systemic research approach.

Contact: Barbara Breitschopf,, +49 721 6809 356

eclareon is an internationally operating consulting firm focusing on renewable energy, energy efficiencies and climate policies. We advise public clients on the political, economic and legal frameworks of European and global energy markets. For our public clients, we develop support scheme design options, barrier removal strategies and economic analyses. Based on the results, we analyse the viability of innovative operating models for renewable energy projects and suitable financing schemes. Furthermore, we support companies in the identification of successful business models and strategies for their market entry. We have a 10 year track-record of successful projects under the Intelligent Energy Europe and the Seventh Framework Programme for Research.

Contact: Robert Brückmann,, +49 1577 133 73

EPU-NTUA (Decision Support Systems Laboratory under School of Electrical & Computer Engineering of NTUA) is a multidisciplinary scientific unit with a long tradition in research activities in the areas of management and decision support for renewable energy sources technologies, energy efficiency, climate change, sustainable development and energy conservation, among others. EPU-NTUA has been established in 1980 and since then, it is growing constantly, expanding its spectrum of activities and its geographical target areas. Today, more than 80 highly qualified researchers and experts are members and close collaborators in EPU-NTUA, ready to offer innovative scientific services.

Contact: Dr. Haris Doukas,, +30 210 7724729

Technische Universität Wien/Energy and Economics Group
The Energy Economics Group (EEG) within the main technical university of Austria, TU Wien (TUW), employs a permanent scientific staff of about thirty people with expertise across all disciplines necessary to assess the impact of energy policy initiatives at the European level. The key research areas are energy modelling, forecasting and analysis of energy policy strategies, dissemination and integration strategies for renewable and new energy system, and climate change. EEG is at the forefront of discussion on energy policy instruments for the enhanced deployment of renewable energies at the European level as well as at global scale. It substantially contributed to the assessment of the effectiveness and efficiency of support schemes for renewable energies either by conducting ex-post or ex-ante evaluations.

Contact: Dr. Gustav Resch,, +43 1 58801 370354

The Lithuanian Energy Institute (LEI) is the Governmental organization, with more than 40 years of experience. LEI has 14 scientific divisions and nearly 300 personal of researchers, engineers, technicians and assistants. Its activities are carried out according to five main research directions approved and financed by the Government of Lithuania. LEI contributes to many research projects on European level as a core partner in fields of renewable energy; energy efficiency; distributed energy resources; energy externalities development for sustainability and other.

Contact: Dr. Inga Konstantinavičiūtė,, +370 37 401952

Mariëlle Vosbeek
Press Office
Kanaalweg 15-G
3526 KL Utrecht
T: +31 (0)30 662-3402

Please send a specimen copy of your publication to the above address.