Why Invest in Renewable Energy?

The incentive for every investment is a good return. As an investor within renewable energy, one has the gratifying job of combining this with a significant contribution to reducing the dependence on fossil fuel consumption, bringing about energy efficiency, and reducing carbon emissions.

Competitive returns on renewable operating assets

In recent years, investment in renewable energy has proven to be a serious alternative to traditional investment opportunities with competitive returns on operating assets. At the same time, they present lower risk compared to more traditional classes such as stocks, foreign exchange, gold, bulk dry freight rates, oil, etc. The great differentiator of renewable energy production is that stable income and operational costs bring stable returns independent from financial markets, economic cycles, and oil prices. Indeed, the production inputs are free resources such as wind, sun, or water.

Major risks involved

The major risk involved in wind and solar energy investments derive from:

• The availability of wind and sun resources year after year in addition to potential climate changes in the long run.

• The potential that a wind turbine or PV panel supplier cannot fulfill his commitment with regard to service and maintenance agreed upon in long term contracts.

• Poor management of the financing and operation phases.

• The future of renewable energy as a whole is still dependent on favorable government policies and regulations. This concerns the uphold of tariff systems, particularly in Spain and Italy, and governments' enforcement of existing or new support mechanisms.

Risk mitigating factors

Nonetheless, with the industrialization of the renewable energy sector, these risks can be mitigated significantly by utilizing:

• The risk involved in long term production yield estimates has been reduced by increased professionalism of estimates and through the increasing availability of historic data. Energy yield is always estimated by at least two independent verifiers.

• Operational costs and mechanical wear can be reduced with "all-risk fixed priced" service packages from the suppliers.

• Financing and interest rate fluctuation risks are handled via long-term (10 - 15 years) project financing with fixed interest rates.

• Power price variation is mitigated by the underwriting of long term Power Purchase Agreements. Further, regulatory requirements to meet renewable portfolio and emission standards are increasingly present on international, national, and regional levels. This has led to many legislations defining 10 - 20 years fixed power prices, for example the German EEG law.

Invest with European Energy

European Energy offers various options for sustainable investments in renewable energy with attractive returns. We have a proven track-record and sound insight into the sector ensuring the institutional or private investor a competent and professional investment partner.

If you have interest in such investment opportunities we would be happy to meet you and discuss the possibilities.