Creation of World Guarantee Fund Touted as ‘One of the Most Important’ COP21 Outcomes

European Parliament member Claude Turmes said that he considers the creation of a de-risking fund for countries that are penalized by capital markets with high interest rates for renewable energy projects to be one of the most important possible outcomes of the 2015 Paris Climate Conference (COP21) in December.

Speaking on Nov. 17 in Paris during an EWEA 2015 conference session on the place of wind energy in COP21, Turmes said that some European countries, such as Greece and Romania, are paying up to four times higher interest rates for renewable projects than in Germany.

“In Germany … you get financing at 2, 3, 4 percent, whereas in southeast Europe this is not true,” he said, according to a webcast sponsored by GE Renewable Energy. “In order to overcome this penalty which some economies get by the capital markets, I have presented [the Luxembourg Declaration] to [the European] energy ministers.”

The Luxembourg Declaration proposes de-risking instruments that could reduce the cost for renewable energy projects in certain countries by half, according to Turmes.

Turmes said that Romania and Slovenia have expressed support for the initiative, and he is working on the idea with Greece. He added that he hopes to have the fund established early next year.

Speaking during the session on Nov. 17, Cederic Philibert, a senior analyst with the International Energy Agency (IEA), said that the IEA estimates that under a scenario that ensures the global average temperature does not exceed 2 degrees Celsius, renewable energy would account for 65 percent to 80 percent of the power sector by 2050. The primary generation technologies in that power mix would be hydro power, solar thermal and PV, and wind, with offshore wind accounting for 25 percent and onshore wind accounting for 75 percent of the total wind in the mix.

In addition, he said that the amount of any given technology in the 65 percent to 80 percent total will depend on location. In Africa and the Middle East, for example, solar will dominate, he said. In Europe, on the other hand, wind power will be more suitable to the “shape of demand” in the region, which peaks after sunset, especially in winter.

According to Philibert, accomplishing the necessary penetration rate of wind energy to meet IEA’s long-term scenario will require wind power production to be as even as possible in order avoid what he calls “self cannibalization,” where all wind power is generating at the same time and its marginal value folds.

To meet that requirement, he added, the industry is turning to a new generation of wind turbines with a low specific rating.

“You have machines that are taller, with longer blades, larger swept areas, but the same or only slightly increased electrical capacity,” he said. “That means you get much higher capacity factors, but more importantly, you get more even output over time, which prevents this self-cannibalization effect to occur and which has much higher value for the system in that it reduces the weight that rests on the shoulder of the rest of the system.”

The European Wind Energy Association’s annual event – EWEA 2015 – is currently underway in Paris and ends Nov. 20. 

Lead image: European Parliament member Claude Turmes. Credit: GE Renewable Energy.

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