Home / Bridging Continents - Infrastructure Index 2019 / Europe: brimming with opportunities / Case study: Europe steps up its WtE game
Bridging Continents - Infrastructure Index 2019
  1. New frontiers for infrastructure investors
  2. Germany: Spearheading the energy transition 2.0
    1. Case study
  3. United Kingdom: UK eyes renewables leadership
  4. Europe: brimming with opportunities
    1. Case study: Europe steps up its WtE game
    2. Country summaries
  5. Africa: Trade ambitions boost interconnectivity
    1. Country summaries
  6. Americas: LatAm leads innovation
    1. Country summaries
    2. Case study: EllaLink: breaking the status quo
  7. Asia Pacific: Securing digital transformation leadership
    1. Country summaries
  8. Middle East: Smart cities shaping the future
    1. Case study: Neom, a new future
    2. Country summaries
  9. Methodology
  10. Interviews
    1. An interview with Dalmore Capital
    2. An interview with First State Investments
    3. An interview with Meridiam
    4. An interview with Finergreen
    5. An interview with Ras Al Khaimah Waste Management Agency
    6. An interview with Grupo Indi
    7. An interview with DNV GL

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.  

Case study: Europe steps up its WtE game
Country summaries

Key contacts

Contact
Paul Smith
Paul Smith
Partner
Head of the CMS Energy, Projects and Construction Group
T +44 (0)20 7367 3475

Expertise

Infrastructure & Projects Energy & Climate Change TMC - Technology, Media & Communications

Case study: Europe steps up its WtE game

 

Europe is stepping up its WtE game, with multiple projects in UK, the Netherlands and Serbia.  Racing to make headway on the EU Recycling target of processing 50% of the country’s waste by 2020, Poland’s waste-to-energy (WtE) market is also thriving. 

Waste management laws in Poland are being revised regularly and changes are frequently introduced to secure the appropriate infrastructure and successful operation and maintenance of facilities.

Olsztyn, Poland’s new WtE hub

Located in north-east Poland in the capital of the Warmian-Masurian region, the Olsztyn WtE project was awarded on 17 June 2019 to a Meridiam-led consortium, under a 30-year PPP contract. 

Total project costs are estimated at EUR 780m, with Meridiam taking ownership of an 80% stake. China’s Urbaser – an environment management company active in the urban services, waste and water treatment sectors – holds the remaining 20% share. 

The new combined heat and power plant for Olsztyn aims to provide clean energy for the 173,000 inhabitants of the city, replacing an ageing fleet of coal-fired stations. 

The project will receive roughly EUR 40m in funds from the European Union, with the direct beneficiary being the municipal-owned company Miejskie Przedsiebiorstwo Energetyki Cieplnej. 

Approximately EUR 100m in debt finance will be provided by a consortium of lenders, including the European Investment Bank.

Multiple WtE projects come to market

Elsewhere in Europe, waste firm Indaver and construction business Acciona secured a contract with the councils of Aberdeen City, Moray, and Aberdeenshire in August 2019, for the construction and operation of the Ness Energy Project in Aberdeen, Scotland. The project’s total cost is estimated at EUR 164m, to be provided by the three local authorities. 

Another Scottish WtE site also recently moved ahead, the Drumgray Energy Recovery Centre project, under the company FCC Environment. A master plan was submitted in July 2019 to the local council for approval, the project earmarked to cost EUR 408m. 

In July 2019, the developers of Serbia’s EUR 339m Beo Cista Energija WtE power plant signed a 25-year contract to provide the city of Belgrade with heat. The companies, namely Suez, Itochu, and Marguerite, will also sell electricity to Serbia’s power utility EPS under a 12-year PPA. 

On 10 July 2019, Lostock WtE plant in Cheshire, UK was granted approval for a capacity increase of 30MW. Copenhagen Infrastructure Partners and FCC Environment acquired the asset from Tata Chemicals in 2018. The project, estimated at EUR 534m, reached financial close in March 2019. 

North Carolina-based IPP Blue Sphere announced in March 2019 it had raised EUR 38.9m for the Sterksel-based Dutch WtE plant, including EUR 29.2m from BNG Bank, EUR 6.42m in junior debt from BNK Bank, Energietransitie Financieringsfaciliteit (ETFF) and Nationaal Groenfonds, and a EUR 3.25m equity investment from Israel’s Helios Capital.

 

Key contacts

Paul Smith
Paul Smith
Partner
Head of the CMS Energy, Projects and Construction Group
T +44 (0)20 7367 3475

Expertise

Energy & Climate Change Infrastructure & Projects