Europe: brimming with opportunities

airplane

Europe’s renewables sector marches towards merchant power projects in 2019, with market disruptors well-positioned to capitalise on the subsidy-free solar boom. 

 European countries ranked
#1Germany
#2Netherlands
#6Norway
#8Finland
#9United Kingdom
#10Belgium
#11Austria
#12Spain
#15Spain
#19Poland
#22Italy
#23Czech Republic
#24Slovakia
#28Hungary
#31Russia
#39Romania
#41Bulgaria
#46Ukraine

The rise in the popularity of corporate PPAs has also reached Central and Eastern Europe (CEE). Poland is making big strides in the clean energy sector, with a wind farm producer and a car manufacturing group signing one of its first PPA in August 2018 between a wind farm producer and car manufacturing group. The agreement is also Europe’s first automotive renewables transaction. Other transactions followed. Polska Grupa Energetycza (PGE) is instrumental in expanding the country’s pipeline of PPAs, the Polish utility signing new agreements in 2019 with the leading chemical company Grupa Azoty. In 2019 Signify signed its first European renewable energy virtual power purchase agreement (VPPA) in a 10-year deal with Green Investment Group’s (GIGs) Kisielice onshore wind farm in Poland. 

Poland has performed strongly thanks to the country’s political stability, ease of doing business and private participation scores improving compared to previous years. Favourable policies implemented in the energy sector – including assigning a separate basket to onshore, offshore wind and small PV in auctions – has boosted renewable project development. 

Spain, a current global hotspot for solar in 2019, is set to develop approximately 4GW of PV installations by the end of 2019, with an overall renewable electricity target already being raised by the country’s government to 74% by 2030. From the beginning of 2019 to October, 16 PPAs were signed for approximately 3.3GW of capacity. 

Due to the impressive performance of its solar sector, which has attracted some of the leading international investors, Spain’s Index score in 2019 was 74.40%, considerably higher than its 2017 performance of 69.09%.

Crucial improvements in the sector were witnessed across Europe, with markets such as Italy and Portugal, as well as the Scandinavian region set to produce proliferations of PPA-backed projects similar to those in Spain. 

Developing the next European airport hub 

A high level of activity in the airports secondary market and sturdy passenger growth has fuelled the interest of seasoned airport owners such as Vinci, AMP Capital and Ardian. With several attractive and profitable assets, CEE countries are providing a pocket of opportunity for airport investors in 2019. 

Boasting the highest growth in passenger traffic in Europe, CEE countries are announcing big airport expansion projects, with some also planning new greenfield additions, including in Romania and Lithuania. 

In July 2019, a new contender as a regional hub emerged, with Vinci taking control of Serbia’s Nikola Tesla airport, with plans to invest roughly EUR 730m to build-up the facility into the best-connected airport in the region. 

Strategic co-operation in EV charging

CEE countries are also making strides with electric vehicles following an upsurge in demand for supporting infrastructure. Germany-based Ionity partnered with Shell in Q3 2018 to deploy EV charging stations in 24 European countries, including Poland, Czech Republic, Hungary and Slovakia, as part of what could be the Europe’s largest ultra-fast charging network. 
Austria’s largest electricity provider, Verbund, also partnered up with Enel X, Smatrics, Greenway and OMV to develop EV charging infrastructure in Romania, Slovenia, Croatia, Hungary and other countries in the region.  

Key Contacts

Picture of Paul Smith
Paul Smith
Partner
Head of the CMS Energy, Projects and Construction Group and Co-head of Infrastructure & Projects Group.