CITIZEN POWER ALLIANCE

Orlando Wagner and Jochen Hauff compare the booming renewables market with other sectors where a boom has been followed by a bust, on the lookout for danger signals. They conclude that the renewable energy sector has strong foundations - but does have some areas of vulnerability, which they examine in detail. They conclude that industry should 'de-hype' the boom, and that a long-term, harmonized renewables support system is important to stabilize the investment framework and enable investors to fulfill the ambitious political targets in Europe - and elsewhere.

Signs of doom for the renewable energy boom?

Not all recent news regarding the growth of renewable energy has been good. Sudden drops in growth rates in key markets, increasing competition from other technologies that boast CO2 neutrality and energy security objectives, financial difficulties of key players and stock market price erosion of renewable energy companies, as well as problems with supply bottlenecks and news on difficulties in fulfilling technological and/or environmental performance promises – they do occur.

Recent developments in Germany have highlighted serious setbacks affecting the growth of renewable energy. For example, a drop in the rate of new installation for land-based wind power in the German market, combined with significant delay in offshore development dampened the previously buoyant mood in what was the world’s biggest wind power market in the past decade. At the same time, likely overcapacities in PV manufacturing make investors nervous and, we believe, highlight the dependency of this market on subsidized demand. In all these cases, it is changing or pending policy decisions that directly impact investment in renewable energies and their potential for growth.

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