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The zero-subsidy renewables opportunity

30 January 2019

The landscape for investments in renewable energy projects is undergoing a period of significant change.

Many European governments are reducing the level of support and subsidies for renewable energy investments, moving away from fixed feed-in tariffs towards competitive auctions and even ‘zero-subsidies’ in certain cases. This is an expected trajectory as technologies mature with the costs of deployment for offshore wind, onshore wind and solar PV following downward trends and significant progress towards national renewable energy targets being achieved.  As cost to the consumer and security of supply climb higher up the political agenda, this has added further pressure on governments to reduce the support available.  However many countries are setting even more ambitious renewables targets, well above 30% of generation capacity. This is due to the reducing LCOE of renewables, for example today onshore wind and solar PV are amongst the cheapest sources of energy, increased sensitivity from consumers and climate change risks.

It is therefore timely to consider what key developments are on the horizon which are enabling zero-subsidy renewable projects in the medium to long term. The answers lie in assessing the historical and potential future trends in key value drivers which range across technical, commercial, financial, legal and regulatory fields. In this paper we explore a selection of the key themes, which have historically enabled renewable investments to continue to be viable and attractive, despite the reducing trajectory of government subsidies in Europe. Against the same themes, we then identify key developments on the horizon that may enable a substantial pipeline of zero-subsidy projects to be deployed in the future.

Download our report below.

Publication
The zero-subsidy renewables opportunity
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Authors

Picture of Philip Duffield
Philip Duffield
Partner
London
Louise Dalton
Louise Dalton
Partner
London