HAMBURG, Germany, Oct. 10 (UPI) -- More confidence-building policy measures are needed to inspire greater amounts of financing for wind power projects, the European Investment Bank says.
The EIB said attendees at a wind energy conference it organized in Hamburg, Germany, last week heard that financiers are acknowledging wind power projects as a "low-risk, sustainable" investment and are following through with solid financial commitments.
However, the political establishments of the European Union and its member nations must do their part by mapping out a "clear direction" to help the investment community overcome nagging doubts and lingering problems, it cautioned.
That must be accomplished if the EU is to reach its ambitious goals for increasing the share of renewables in the energy mix, speakers said.
"A plan has never been enough to make it happen," Hamburg Mayor Olaf Scholz said at the conference.
The EIB is one of the biggest players in financing wind power and other types of alternative energy in Europe. It says its lending for renewable energy has grown dramatically in recent years, reaching $8.3 billion in 2010 -- the majority of it directed to wind and solar power generation.
One key area of concern to investors, the EIB said, is connectivity. Attendees in Hamburg heard that a pan-European transmission grid is needed "to enable a true EU energy market."
A major step toward the establishment of a pan-European offshore "supergrid" was taken last December when Belgium, Denmark, France, Germany, Ireland, Luxemburg, the Netherlands, Norway, Sweden and the United Kingdom banded together to sign the non-binding Northsea Countries Offshore Grid Initiative Memorandum of Understanding.
Renewable energy backers say the supergrid is needed to deliver electricity generated by wind to where it's needed in Europe and would trigger billions of dollars in investment. The undersea lines would use high-voltage DC cables, or HVDC, allowing electricity to be transmitted over much greater distances than existing alternating current lines.
But questions of whether the political will exists to actually make it happen remain. The establishment of a single European energy market is a revolutionary concept that would require a leap forward in defining the role of nations in the process, the EIB conference was told.
The bank made a big investment in European power grid integration last week when it provided a $468 million loan to the French grid operator RTE and its Spanish counterpart REE to finance a new high-voltage interconnector between the two countries.
The EIB said the new line will double the electricity exchange capacity between Spain and the rest of Europe and would add to the momentum of alternative energy development.
Another area of concern, the bank said, is making large-scale offshore wind power projects more attractive to big, private investors. That will require more creativity, Hamburg participants were told.
"Project promoters called for more innovative financing solutions to also attract institutional investors, such as pension funds, in order to be able to "power a cleaner future,'" the bank said.
To help entice such investments, the EIB says it has developed alterative financing means, such as equity and carbon funds, to further support renewable energy and energy-efficiency projects, as well as "working upstream" with project promoters to provide them with technical assistance.
It is also manages and participates in other initiatives related to energy and climate change, such as the Mediterranean Solar Plan and the Global Energy Efficiency and Renewable Energy fund of funds.
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