Research on European  
Renewable Energy  
Development and Investment  
( B r i e f V
e r s i o n )  
Global Energy Interconnection  
Development and Cooperation Organization  
(GEIDCO)  
Research on European Renewable Energy Development and Investment  
PREFACE  
Energy is an important foundation for economic and social  
development. Mankind uses energy, historically we have converted  
energy sources from firewood to fossil such as coal, oil, and natural gas,  
to renewable energy such as hydro, wind and solar energy, every change  
is accompanied by a huge leap in productivity and major progress in  
human civilization. Energy, as the driving force for the development of  
modern society, contributes to the nation’s economy and its citizens’  
interactive dynamic, as well as to their welfare. The massive  
development and use of traditional fossil energy has led to increasingly  
prominent problems such as resource shortages, environmental  
pollution, and climate change, which seriously threaten human survival  
and sustainable development. In essence, the core of sustainable  
development is clean development. The key is to promote renewable  
energy, and replace fossil energy with renewable energy such as solar,  
wind, and hydropower.  
Scientific and accurate quantitative assessment of resources is the  
critical foundation for large-scale development and utilization of  
renewable energy. At present, the globally installed capacity of hydro,  
wind and solar power has exceeded 30% of the installed capacity of  
power sources. Although some achievements have been made in the  
development of renewable energy, there is still potential for it to expand.  
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Research on European Renewable Energy Development and Investment  
Therefore, it is of great importance to conduct a fine assessment on  
resource reserves. On the basis of establishing and improving the global  
renewable energy resources database, the Global Energy  
Interconnection Development and Cooperation Organization (GEIDCO)  
has established an assessment system and digital fine assessment  
models for renewable energy resources. These models carry out  
systematic calculation and quantitative assessment of theoretical  
potential, technical potential installed capacity and economic potential  
installed capacity of hydro, wind and solar energies from a global  
perspective. An achievement of the Global Renewable-energy  
Exploitation ANalysis (GREAN) platform has been made, thereby the  
accuracy and timeliness of global renewable energy resources  
assessment will be effectively improved, subsequently providing an  
important support for large-scale development and utilization of  
renewable energy in relevant countries and regions.  
Systematic and efficient macro site selection of power bases is an  
important prerequisite for large-scale development and utilization of  
renewable energy. The site selection of renewable energy power bases  
is related to the cost-effectiveness of power station development, which  
crucially contributes to economic development and the efficient  
utilization of renewable energy. There are many factors affecting the  
site selection of power bases, hence the site selection analyses and  
decision-making process are convoluted. The desk top study of site  
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selection is often limited by the integrity and accuracy of data. Site  
selection must rely on site surveys, which requires a huge amount of  
manpower, financial resources and time. By taking into account factors  
such as global topography and terrain elevation, land covers, water  
systems, natural reserves, geology and historical seismic activity  
frequency, power supply and power grid, population and economy,  
GEIDCO has developed a set of basic database, models and tools for  
macro site selection for renewable energy power bases which  
significantly increase the breadth and depth of data collection and  
analysis processes, thereby, greatly improving the accuracy, economy  
and effectiveness of the desk top study of site selection, and achieving  
systematic achievements in promoting the development of global  
renewable energy resources. The data collected and analyzed by such  
models and tools are referred as “Reference Book” and “Data Manual”  
and used during the world’s energy strategy research and policy  
formulation  
Focusing on the world’s resource assessment and base development of  
all continents, GEIDCO has prepared a series of scientific reports on  
renewable energy development and investment globally, specifically in  
continents such as Asia, Europe, Africa, North America, Central and  
South America and Oceania. This report is one of the renewable energy  
research series focusing on Europe, which fully shows the  
achievements in the assessment of renewable energy resources and the  
site selection of large-scale power bases in Europe. In Chapters 1, 2 and  
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3, the resource assessment of hydroenergy, and the resource assessment  
and base development research of wind and solar energy in Europe were  
completed by digital methods. Firstly, the methods, models and data of  
resource assessment and site selection are introduced respectively. In  
terms of hydropower, the theoretical potential of hydroenergy resources  
in major river basins of Europe is calculated. In terms of wind and  
photovoltaic power, on the basis of comprehensive calculation and  
analysis of the main factors affecting centralized development, the  
theoretical potential, technical potential installed capacity and  
economic potential installed capacity of wind and solar energy in all  
countries and regions of Europe have been calculated. Using the  
GREAN platform, the site selection and layout of large-scale onshore  
wind power bases and large-scale solar photovoltaic power bases in  
Europe are proposed, and the assessment of development conditions,  
development scale and the calculation of technical and economic  
indicators are completed. In chapter 4, based on the development trend  
of energy and electricity supply and demand in Europe, the power  
transmission direction and mode of large-scale renewable energy bases  
are studied and analyzed by coordinating the regional, trans-regional  
and trans-continental power consumption markets. Chapter 5 reviews  
the energy policies and investment status of major countries in Europe,  
analyzes the typical investment modes of renewable energy  
development projects, conducts case studies in the development  
schemes of large-scale renewable bases in Europe, and proposes  
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suggestions on policies and investment modes to speed up clean  
development in Europe.  
The Global Renewable Energy Development and Investment series of  
reports made by the GEIDCO are committed to providing guidance and  
reference for the large-scale development and utilization of renewable  
energy around the world and accelerating the implementation of clean  
alternatives on the energy supply side. This report provides guidelines  
and acts as a reference guide for government departments, international  
organizations, energy enterprises, financial institutions, universities and  
relevant individuals who take part in renewable energy resource  
assessment, strategic research, project development, international  
cooperation, etc. However, due to the time constraints for data  
collection and report research writing timeframe, the contents may be  
incomplete. Comments and suggestions are welcome for further  
improvements.  
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CONTENTS  
ꢀ
1.ꢀHydroenergy Resources Assessment and Development......7ꢀ  
1.1ꢀ ANALYSIS OF RESTRICTIVE FACTORS.......................... 7ꢀ  
1.2ꢀ RESOURCES ASSESSMENT .................................. 9ꢀ  
2ꢀ Wind Energy Resources Assessment and Development.....11ꢀ  
2.1ꢀ ANALYSIS OF RESTRICTIVE FACTORS......................... 11ꢀ  
2.2ꢀ RESOURCES ASSESSMENT ................................. 14ꢀ  
2.3ꢀ POWER BASES DEVELOPMENT............................... 19ꢀ  
3ꢀ Solar Energy Resources Assessment and Development....22ꢀ  
3.1ꢀ ANALYSIS OF RESTRICTIVE FACTORS......................... 22ꢀ  
3.2ꢀ RESOURCES ASSESSMENT ................................. 24ꢀ  
3.3ꢀ POWER BASES DEVELOPMENT............................... 28ꢀ  
4ꢀ Outbound Transmission of Large-scale Renewable Energy Bases  
31ꢀ  
4.1ꢀ WIND POWER BASES IN THE NORTH SEA ...................... 31ꢀ  
4.2ꢀ WIND POWER BASES IN THE BALTIC SEA...................... 32ꢀ  
4.3ꢀ WIND POWER BASES IN NORWEGIAN SEA AREA .................. 34ꢀ  
4.4ꢀ WIND POWER BASES IN GREENLAND.......................... 35ꢀ  
4.5ꢀ WIND POWER BASES IN THE BARENTS SEA..................... 36ꢀ  
5ꢀ Policy Environment and Investment and Financing Suggestions  
38ꢀ  
5.1ꢀ OVERVIEW OF EUROPEAN COUNTRIES ......................... 38ꢀ  
5.2ꢀ INVESTMENT AND FINANCING PROPOSAL....................... 42ꢀ  
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1. Hydroenergy Resources Assessment and Development  
Europe is rich in hydroenergy resources, with a high degree of  
exploitation. In this report, the digital assessment of hydroenergy  
resources in basins of such 13 main rivers as Angerman River, Volga  
River, Wisla River, Tagus River, Don River, Daugava River, Dnieper  
River, Dniester River, Danube River, Elbe River, Rhine River, Loire  
River and Po River is carried out, and the theoretical potential of  
hydroenergy is about 1944 TWh/a.  
1.1Analysis of restrictive factors  
In terms of water system distribution, there are many water systems  
in Europe, including such world-famous rivers as Danube, Rhine and  
Elbe, which are mainly distributed in the south and southeast.  
According to the analysis, there are 42 first-class rivers with a basin  
area of more than 2×104 km2, totally with a basin area of 664×104 km2,  
accounting for about 65% of the total area of Europe. The distribution  
of major river systems in the whole continent is shown in Figure 1-1.  
In terms of hydrological data, The European continent studied in the  
report, based on the basic data of the Global Runoff Data Center which  
contains the observation data from more than 2000 hydrological  
stations, also covers some river basins in the UK, Ireland and Iceland  
in addition to the above 42 first-class river basins with a basin area of  
more than 2×104 km2.  
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Figure 1-1 Distribution of Major Rivers in Europe  
In terms of geological conditions, data about the distribution of  
geological faults and historical seismic activity frequency are important  
reference factors for the development and site selection of large-scale  
hydropower bases. Generally speaking, regions with tectonic plate  
boundaries, geological faults and high frequency of historical  
earthquakes are not suitable for the construction of large-scale  
hydropower projects. The distribution of geological faults and historical  
seismic activity frequency in Europe are shown in Figure 1-2. Italy,  
Greece and other Mediterranean coastal areas in southern Europe are  
featured with historical seismic activities, while some regions such as  
Switzerland, Austria, northern Italy and southern France are unstable in  
geological structure. It is necessary to consider seismic activities for the  
site selection of hydropower development in these regions.  
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Figure 1-2 Distribution of Major Geological Faults and  
Historical Seismic Activity Frequency in Europe  
1.2Resources Assessment  
There are a total of 3262 rivers in Europe with a theoretical hydroenergy  
potential of 50 GWh and above each. The theoretical potential of  
hydroenergy resources is 4434 TWh/a, accounting for 9.6% of global  
total. Digital assessment and calculation of hydroenergy resources in 13  
major river basins in Europe, including Angerman, Volga, Wisla, Tagus,  
Don, Daugava, Dnieper, Dniester, Danube, Elbe, Rhine, Loire and Po  
rivers are carried out as shown in the report and the distribution of  
which is shown in Figure 1-3, covering an area of 438.5×104 km2, or  
61% of Europe’s primary rivers, and covering major hydroenergy  
resources to be developed.  
According to the calculation of the digital platform, the total theoretical  
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potential of the 13 basins is about 1944 TWh/a.  
According to the national statistical assessment carried out by the  
countries involved in the basin, the theoretical hydroenergy potential in  
Europe is mainly distributed in 30 countries such as Austria, Germany,  
Romania, Russia and Ukraine, among which the theoretical  
hydroenergy potential in Austria is the highest, at 272.17 TWh/a.  
Figure 1-3 Distribution of 13 Major River Basins in Europe  
In Europe, the development of hydroenergy resources started early, and  
most of the reaches with concentrated hydroenergy resources and good  
development conditions have been developed or completed detailed  
development scheme research. Therefore, this report no longer  
emphasizes on the development scheme research of hydropower  
cascade in European rivers.  
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2. Wind Energy Resources Assessment and Development  
Europe is rich in wind energy resources, mainly distributed in the sea.  
The report assessed 46 countries and regions in Europe, and calculated  
that the total theoretical potential of onshore wind energy is 213.2  
PWh/a and that of offshore wind energy is up to 776.6 PWh/a. The  
installed capacity suitable for onshore-centralized development is  
3910.9 GW, which is mainly distributed in northwestern Russia,  
northern England, northern Norway and Iceland, with 10.6 PWh of  
annual power generation. The installed capacity suitable for offshore-  
centralized development is 25.3 TW, which is mainly distributed in the  
North Sea, Baltic Sea, Norwegian Sea, Greenlandic and Icelandic  
waters, and Barents Sea. Considering the characteristics and  
development conditions of resources, the site selection and  
development schemes of such 17 large-scale wind power bases as  
Angus Wind Power Base in the UK, offshore wind power base on the  
coasts of eastern UK, offshore wind power base on the coasts of  
Belgium and offshore wind power base on the coasts of Netherlands  
were studied and the main technical and economic indicators were  
proposed by using the digital platform, with a total installed capacity  
expected to be 158.16 GW.  
2.1Analysis of restrictive factors  
In terms of wind speed distribution, the distribution of wind speeds  
in Europe is shown in Figure 2-1. On the land of Europe, some countries  
with good wind resources and an annual average wind speed of more  
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than 6 m/s, including Denmark, Norway, Iceland, Sweden and Finland  
in the north, Russia in the east, Poland, Estonia, Latvia and Lithuania  
around the Baltic Sea, and the UK, Ireland, the Netherlands, Belgium,  
Germany, Luxembourg and France in the west, have the conditions for  
centralized development of wind power bases. Among the seas of  
Europe, the North Sea area close to the UK, the Netherlands, Belgium  
and Germany, and the shallow coastal waters of the Baltic Sea, the  
Norwegian Sea and the Barents Sea, with rich wind resources and an  
annual average wind speed of more than 8 m/s, are suitable for  
development of offshore wind power bases.  
Figure 2-1 Distribution of Wind Speeds in Europe  
In terms of land covers, from the perspective of land resources suitable  
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for large-scale centralized development, forests, cultivated lands,  
wetland water bodies, urban areas and ice and snow are the main  
restrictive factors of land cover affecting the centralized development  
of wind power resources. The western, central and southern Europe  
have a temperate marine climate and a Mediterranean climate. Affected  
by the ocean, the climate is mild and the rainfall is abundant, suitable  
for development of farming and animal husbandry. The land is mainly  
covered by cultivated lands and cities and urban areas. France is located  
on the plain of western Europe and is the largest agricultural country in  
Western Europe. Europe gradually shifts to a temperate continental  
climate from west to east, which is featured by cold climate, small  
population and few cities, and forests as the main land cover. Figure 2-  
2 specifies the distribution of the above-mentioned five land covers that  
mainly restrict the centralized development of wind power in Europe.  
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Figure 2-2 Distribution of Forest, Cultivated Lands, Wetland Water Bodies, Urban Areas and  
Ice and Snow in Europe  
2.2Resources Assessment  
In terms of theoretical potential, according to the wind speed data at  
the height of 100 m, the theoretical potential of wind energy resources  
in Europe is 213.2 PWh/a, accounting for 11% of the global total. Some  
areas in western, northern and eastern Europe are among the regions  
with the greatest potential development for wind energy resources in  
the world.  
In terms of technical potential installed capacity, after  
comprehensive consideration of resources and various technical  
constraints, the technical potential installed capacity of onshore wind  
power suitable for centralized development in Europe is about 3910.9  
GW, and the annual power generation is about 10.6 PWh/a.  
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In terms of distribution, the technically exploitable onshore wind  
energy resources in Europe are mainly distributed in the UK, Iceland,  
Norway and Russia, accounting for more than 70% of the continent’s  
total. The above areas are basically below 2000 m above sea level and  
are mainly covered by herbaceous vegetation and shrubs. Most areas in  
western, central and southern Europe basically do not have the  
conditions for centralized construction of large-scale wind power bases  
due to dense population and wide distribution of cultivated lands as a  
result of developed agriculture. Switzerland, northern Italy, western  
Austria and other countries and regions located in the Alps have poor  
conditions for centralized development of wind power due to high  
altitude and greatly undulating land surface. Countries in northern and  
eastern Europe, such as Sweden, Finland and Russia, are too forested  
to build centralized wind power bases. On the whole, due to the  
influence of land cover, topography and other factors, only 9% of  
onshore areas in Europe have the conditions for centralized  
development and construction of wind power bases, and some countries  
in Europe are more suitable to develop wind power resources by using  
distributed development mode and idle land around villages, forests and  
in fields.  
The wind power installed capacity per unit land area and its annual  
power generation are important indicators to characterize the  
technically exploitable resource conditions of wind power in a region.  
However, the installed capacity is greatly affected by the terrain slope.  
In comparison, the ratio of annual power generation to installed capacity,  
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that is, the number of installed capacity full-load hours (capacity factor),  
can better reflect the advantages and disadvantages of regional wind  
power resources, development conditions and technology. Please refer  
to Figure 2-3 for the distribution of technical available areas for wind  
power generation in Europe and their full-load hours.  
Figure 2-3 Distribution of Wind Power Technical Available Areas in Europe and Their Full-  
load Hours  
In terms of the distribution of wind power technical indicators in  
Europe, the average full-load hours for the technical potential installed  
capacity of continent-wide onshore wind power are about 2707 hours  
(with an average capacity factor of about 0.31). Among them, the full-  
load hours of wind power are above 3000 hours in eastern and western  
Iceland, northern England, northern Norway and northern Russia. The  
development conditions are favorable, with the maximum value  
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occurring in western Iceland, exceeding 4000 hours. The North Sea area  
in Europe is rich in wind energy resources. According to measurement  
and calculation, the annual full-load hours of wind power exceed 4500  
hours (with an average capacity factor of above 0.51), and the water  
depth in the North Sea is basically around 50-100 m. The conditions for  
wind power base construction are extremely favorable.  
In terms of development cost, according to the estimation of the cost  
level of onshore wind power technology and equipment by 2035,  
considering the transportation and grid infrastructure conditions, the  
average cost for centralized wind power development in Europe is 3.63  
cents, and that in countries of Europe is between 2.32 and 6.84 cents.  
According to the current global average tariff level of about 8 cents,  
nearly 98% of Europe’s technical potential installed capacity meets the  
economic requirements. Under the condition of global wind power  
average development cost of about 5 cents, the calculation shows that  
the economic potential installed capacity of wind power in Europe is  
expected to be 3.4 TW according to the cost level by 2035, accounting  
for 86% of technical potential installed capacity. See Figure 2-4 for the  
distribution of development costs for wind power resources in Europe.  
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Figure 2-4 Distribution of Wind Power Development Costs in Europe  
In terms of economic indicators by country of wind power generation  
in Europe, countries and regions with excellent resource conditions and  
relatively good transportation and grid infrastructure have low cost and  
better cost-effectiveness for wind power development. On the whole,  
most of the wind power resources that can be developed in Europe have  
good cost-effectiveness, but the cost for wind power development in 11  
countries including Russia, France, Ukraine and Serbia is higher than 8  
cents, which indicates that these countries have areas where  
development is restricted due to cost.  
From the perspective of the most cost- effective development regions,  
the lowest LCOE of wind power in Norway, Sweden, Finland, Iceland,  
Denmark, Estonia, Latvia, Lithuania, Russia, Germany, Poland, Greece,  
the UK, Ireland, the Netherlands, Belgium, France, Spain, Portugal and  
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other countries is less than 2.5 cents, showing a high level of cost-  
effectiveness, with the lowest development cost occurring in the  
southeast of Edinburgh of Scotland in northern UK, at 1.95 cents. From  
the perspective of the average economic level of wind power  
development, the average development cost in Denmark is the lowest,  
at 2.32 cents, ranging from 1.92 to 2.59 cents.  
2.3Power Bases Development  
According to the assessment results of wind energy resources in Europe,  
considering the characteristics of resources and development conditions,  
large-scale wind power bases in Europe should be laid out in regions  
with high technical indicators and low development cost. According to  
the overall local electricity demand and the layout of the main strategic  
power transmission channels of energy interconnection in Europe, in  
the future, the UK Angus Onshore Wind Power Base and offshore wind  
power bases on the coasts of eastern UK, northwestern Belgium,  
northwestern Netherlands, northwestern Germany, western Denmark  
and southern Norway in the North Sea waters will be developed in  
western Europe, with a total development scale of 81.46 GW by 2035.  
Offshore wind power bases on the coasts of eastern Denmark, Poland,  
Lithuania, Latvia, Estonia, Finland and Sweden will be developed in  
the Baltic Sea waters, with a development scale of 45.30 GW by 2035.  
Offshore wind power base in Norwegian Sea Area will be developed in  
the Norwegian Sea waters, with a development scale of 5.10 GW by  
2035. Offshore wind power bases in Greenland will be developed in the  
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waters of Greenland and Iceland, with a development scale of 14.00  
GW by 2035. Offshore and onshore wind power bases of the Barents  
Sea will be developed along and in the Barents Sea waters, with a  
development scale of 12.30 GW by 2035.  
Based on the digital site selection model and software, the above 17  
wind power bases are studied with regard to the development conditions,  
installation scale, engineering assumption, power generation  
characteristics and investment level, and a preliminary development  
scheme was put forward. The total installed capacity of the above 17  
wind power bases is about 158.16 GW and the annual power generation  
will be 680.25 TWh/a. According to the long-term scheme, the total  
development scale is expected to exceed 260 GW in the future.  
According to the forecast results of cost for onshore and offshore wind  
power in Europe by 2035 and investment estimation based on the basic  
situation of the project, the total investment of wind power bases in  
Europe is about 263.021 billion USD, and the LCOE of onshore wind  
power bases is 2.66 cents/kWh, while that of offshore wind power bases  
is 4.86-7.08 cents/kWh. See Figure 2-5 for the overall layout of large-  
scale wind power bases in Europe.  
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Figure 2-5 Layout of Large-scale Wind Power Bases in Europe  
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3. Solar Energy Resources Assessment and Development  
Europe has relatively good solar energy resources and the development  
potential is modest. The report assessed 46 countries and regions in  
Europe, and calculated that the total theoretical potential of solar  
photovoltaic resources in Europe is 9550.1 PWh/a, and the installed  
capacity suitable for centralized development is 10.4 TW, which is  
mainly distributed in southern Europe, with 14.1 PWh of annual power  
generation. Considering the characteristics and development conditions  
of resources, the site selection scheme of Andalucia Photovoltaic Power  
Base in Spain was studied and the main technical and economic  
indicators were proposed by using the digital platform, with a total  
installed capacity expected to be 720 MW.  
3.1Analysis of restrictive factors  
In terms of global horizontal irradiance, Europe holds general  
potential for solar energy development, and the distribution of global  
horizontal irradiance of solar energy is shown in Figure 3-1.  
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Figure 3-1 Distribution of Global Horizontal Irradiance of Solar Energy in Europe  
The mean annual global horizontal irradiance of the southern European  
countries along the Mediterranean with relatively good solar energy  
resources, such as Portugal, Spain, Greece, Malta and Albania, is above  
1500 kWh/m2, which is beneficial to the development of large-scale  
photovoltaic power bases.  
In terms of terrain slopes, the aspect and slope of the ground will  
affect the angle and spacing of photovoltaic power generation devices,  
thus affecting the amount of electricity generated per unit area. The  
global digital elevation model is adopted to calculate the aspect (0°-  
360°) and slope (0°-90°) of global grid points, and the grid point  
longitude and latitude coordinates are combined to form important  
input parameters for calculating the inclination angle and spacing of  
photovoltaic power generation devices. Figure 3-2 gives a schematic  
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diagram for the distribution of terrain slopes in Europe. Generally  
speaking, the flat area with a slope lower than 1.5° accounts for the  
largest proportion, exceeding 50% of the total area. The steep mountain  
areas with a gradient over 30° are rarely distributed.  
Figure 3-2 Distribution of Terrain Slopes in Europe  
3.2Resources Assessment  
In terms of theoretical potential, according to measurement and  
calculation of the solar GHI data, the theoretical potential of solar  
photovoltaic resources in Europe is 9550.1 PWh/a, accounting for 5%  
of the global total. Some areas in southern Europe are regions with the  
most development potential for photovoltaic resources.  
In terms of technical potential installed capacity, after  
comprehensive consideration of resources and various technical  
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constraints, it is estimated that the scale suitable for centralized  
development of solar photovoltaic resources in Europe is 10.4 TW, and  
the annual power generation is up to 14.1 PWh.  
In terms of distribution, most of the photovoltaic resources in Europe,  
more than 60% of the continent’s total, are mainly distributed in Spain,  
Greece, Italy, France and Portugal in the south, and Russia and Ukraine  
in the east. Most of the above-mentioned regions are below 2000 m  
above sea level and have relatively good solar energy resource  
conditions. However, the land cover restrictions, such as cultivated  
lands, cities and urban areas, make it impossible to build centralized  
photovoltaic power bases in most of them. Generally speaking, affected  
by factors such as topography and land covers, only 8% of Europe has  
the conditions for centralized development and construction of  
photovoltaic power bases. Most countries in Europe are more suitable  
to adopt the distributed development mode to develop photovoltaic  
resources using idle land in fields and roofs in cities and urban areas  
Similar to the technical indicator of wind power, the ratio of annual  
power generation per unit land area to installed capacity, that is, the  
number of installed capacity full-load hours (capacity factor) is also a  
key parameter reflecting the advantages and disadvantages of regional  
photovoltaic resource technology development conditions. Please refer  
to Figure 3-3 for the distribution of technical available areas for  
photovoltaic power generation in Europe and their full-load hours.  
According to the technical indicators, the average full-load hours of  
technical potential installed capacity of photovoltaic power generation  
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in the whole continent are about 1357 (the average capacity factor is  
about 0.15), among which, the full-load hours of photovoltaic  
technology are above 1500 in Malta, Spain, Portugal and Greece. The  
development conditions are relatively good, with the maximum value  
occurring in the southeast of Andalucia in Spain, exceeding 1700 hours.  
Figure 3-3 Distribution of Technical Available Areas for Photovoltaic Generation in Europe  
and Their Full-load Hours  
In terms of development cost, according to the estimation of the cost  
level of photovoltaic technology and equipment by 2035, considering  
the transportation and grid infrastructure conditions, the average  
development cost of centralized solar photovoltaics in EuropeA is 3.18  
cents, and the average development costs for each country are between  
2.27 cents and 3.59 cents. According to the current global average tariff  
level of about 8 centsB, 98% of Europe’s technical potential installed  
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capacity meets the economic requirements. Under the condition of  
global PV average development cost of about 5 cents, the calculation  
shows that the economic potential installed capacity of solar power in  
Europe is expected to be 7.6 TW according to the cost level by 2035,  
accounting for 73% of technical potential installed capacity. See Figure  
3-4 for the distribution of development costs for photovoltaic resources  
in Europe.  
In terms of economic indicators, countries and regions with excellent  
resource conditions and relatively good transportation and grid  
infrastructure have relatively low cost and better cost- effectiveness for  
photovoltaic power development. On the whole, the highest LCOE in  
most countries and regions is higher than 8 cents, which indicates that  
Europe as a whole does not have good conditions for large-scale  
development. Among them, some regions of Italy, France, Ukraine,  
Spain and other countries have extremely high LCOEs, which are  
closely related to their local weak solar irradiance level and poor  
transportation and grid integration conditions.  
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Figure 3-4 Distribution of Development Costs for Photovoltaic Generation in Europe  
From the perspective of the most cost-effective development regions,  
the lowest LCOE of photovoltaic power in Spain, Italy, Malta, Portugal,  
Greece, France, Albania, Russia and Andorra is less than 2.5 cents/kWh,  
showing a relatively high level of cost-effectiveness, with the lowest  
development cost occurring in the southeast of Andalucia in Spain, at  
2.1 cents/kWh. On average, Malta has the lowest average development  
cost in countries, namely, 2.27 cents, and its lowest development cost  
is 2.2 cents.  
3.3Power Bases Development  
Large-scale photovoltaic power bases should be laid out in regions with  
high technical indicators and low development cost. According to the  
overall local electricity demand and the layout of the main strategic  
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power transmission channels of energy interconnection in Europe,  
distributed photovoltaic development will be the focus in Europe in the  
future, with centralized development as the supplement.  
The photovoltaic power in Europe is developed mainly through  
distributed building-mounted photovoltaics. In view of the coverage of  
forests, cultivated lands, cities and urban areas in European land, as well  
as factors such as high land costs and strict environmental protection  
requirements, it is not suitable for large-scale centralized photovoltaic  
development. The utilization of solar energy resources may be  
improved by renovating and upgrading existing or new buildings, and  
by vigorously developing distributed development modes that are  
flexible and highly price-competitive and do not need much space, such  
as industrial and commercial building-mounted photovoltaics, and  
rooftop photovoltaic systems on residential buildings without/with  
energy storage. According to the research results of energy  
interconnection planning in Europe, the total scale of distributed  
photovoltaic development in Europe is expected to exceed 800 GW, and  
the total photovoltaic power generation will reach 960 GW.  
Considering the solar energy resource conditions in Europe, large-scale  
photovoltaic power stations can be built in areas in southern Spain,  
Greece, Portugal and Italy that have land conditions for centralized  
development. Given the high level of solar energy availability and the  
cost reduction brought about by scale effect, the centralized  
photovoltaic development presents a relatively high level of cost-  
effectiveness. The report, based on the digital site selection model and  
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software, carried out research on the development conditions, installed  
capacity scale, project assumptions, power generation characteristics  
and investment level of the Andalucia Photovoltaic Power Base in  
southern Spain, and proposed a preliminary development scheme. The  
installed capacity of the base is expected to be 720 MW and the annual  
power generation is expected to be 1.26 TWh/a. According to the  
forecast results of cost for photovoltaic generation in Europe by 2035  
and investment estimation based on the basic situation of the project,  
the total investment of Andalucia Photovoltaic Power Base in Spain is  
about 361 million USD, and the average LCOE is 2.20 cents /kWh.  
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4. Outbound Transmission of Large-scale Renewable  
Energy Bases  
Based on the development trend of energy and power supply and  
demand in Europe and in combination with the distribution and  
development pattern of renewable energy, the report analyzes the power  
delivery direction and transmission mode of large-scale renewable  
energy bases in Europe by coordinating the regional, cross-regional and  
inter-continental power consumption markets, and fully considering  
such factors as power delivery capacity, transmission distance and grid  
structure development. The research results have important and positive  
significance for promoting the development of renewable energy bases,  
speeding up the construction of domestic power grids and the  
interconnection of transnational power grids, and realizing the wide-  
range optimal allocation and efficient utilization of renewable energy  
resources in Europe.  
5.4Wind Power Bases in the North Sea  
The countries around the North Sea are economically and socially  
developed, and have a relatively good industrial base. People in these  
countries have a high level of environmental awareness. The countries  
have implemented diversified incentive policies to promote energy  
transition to renewable energy and low-carbon economic development.  
The development potential of renewable energy is huge. In the future,  
the North Sea area will focus on developing large- and middle-scale  
offshore wind power bases in the region, and equip appropriate-scale  
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energy storage and gas power generation to promote renewable and  
low-carbon development of power supply in all surrounding countries.  
Meanwhile, the transnational sea-land corridor is fully used to build a  
±800 kV flexible DC loop grid so as to build a regional renewable  
energy hub platform and realize mutual complementarity and support  
of renewable energy power in the British Isles, Northern Europe and  
Western Europe around the North Sea. The power delivery direction of  
wind power bases in the North Sea is shown in Table 4-1.  
Figure 4-1 Schematic Diagram of Long-run Transmission Scheme for Wind Power Bases in  
the North Sea  
5.5Wind Power Bases in the Baltic Sea  
The Baltic Sea is surrounded by three regions, namely Northern Europe,  
Baltic countries and Eastern Europe. The coastal and offshore wind  
energy resources are very abundant, and the waters are relatively  
shallow on average, which is conducive to the development and  
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utilization of wind energy resources. Surrounding countries attach  
importance to the development of renewable energy and have  
formulated a series of policies to promote the development and  
utilization of wind energy and other renewable energy. In the future, the  
development focus in the Baltic Sea region will be on large and  
medium-sized offshore wind power bases. Meanwhile, the transnational  
sea-land corridor will be fully used to build a ±800/±660 kV flexible  
DC loop grid so as to build a regional renewable energy hub platform  
and realize mutual complementarity and support of renewable energy  
power in Northern Europe, the Baltic countries and Eastern Europe. The  
power delivery direction of wind power bases in the Baltic Sea is shown  
in Table 4-2  
Figure 4-2 Schematic Diagram of Long-run Transmission Scheme for Wind Power Bases in  
the Baltic Sea  
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5.6Wind Power Bases in Norwegian Sea Area  
The Norwegian Sea lies northwest of Norway, between the North Sea  
and the Greenland Sea, and is rich in wind energy resources. In the  
future, the focus will be on the development of large and medium-sized  
offshore wind power bases in the western waters of Norway. Power  
from these bases will be brought together with the hydropower from  
Scandinavian Mountains, and transmitted to the British Isles or  
transferred from Denmark to Germany for consumption. At the same  
time, the flexible DC grid planned to be built in Europe in the future  
will help realize mutual complementarity between the wind power from  
the Norwegian Sea in the north and the solar power from Iberian  
Peninsula in the south. The long-run transmission scheme for wind  
power bases in the Norwegian Sea is shown in Figure 4-3.  
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Figure 4-3 Schematic Diagram of Long-run Transmission Scheme for Wind Power Bases in  
the Norwegian Sea  
5.7 Wind Power Bases in Greenland  
The Greenland Sea is located in the vast area between Iceland,  
Greenland and Spitsbergen. It is rich in wind energy resources. In the  
future, priority may be given to the development of wind power on the  
coast of southeastern Greenland and in Iceland and its surrounding  
coastal areas, and the construction of large and medium-sized wind  
power outbound transmission bases, to transmit clean power to the UK  
and realize mutual complementarity and support with the power from  
the UK and continental Europe. The long-run transmission scheme for  
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wind power bases in Greenland is shown in Figure 4-4.  
Figure 4-4 Schematic Diagram of Long-run Transmission Scheme for Wind Power Bases in  
Greenland  
5.8Wind Power Bases in the Barents Sea  
The Barents Sea lies north of Norway and Russia. It is one of the  
epicontinental seas of the Arctic Ocean. The areas of Norway and  
Russia along the Barents Sea are rich in wind energy resources. In the  
future, priority may be given to development of the coast of  
northeastern Norway to transmit clean power to Eastern Europe for  
consumption, and to development of wind power base on the coast of  
northwestern Russia to transmit offshore wind power to the load centers  
in northwestern Russia. The long-run transmission scheme for wind  
power bases in the Barents Sea is shown in Figure 4-5.  
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Figure 4-5 Schematic Diagram of Long-run Transmission Scheme for Wind Power Bases in  
the Barents Sea  
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5. Policy Environment and Investment and Financing  
Suggestions  
Based on the characteristics of renewable energy resource  
endowment and regional economic development in Europe, this  
report comprehensively analyzes the investment and financing policy  
environment of renewable energy in Europe, and systematically  
analyzes the major European countries in six aspects such as business  
environment, renewable energy development goals, power industry  
system and market, energy and power investment policy, supportive  
fiscal policy and land, labor and environmental protection policy. This  
report presents some investment and financing suggestions through the  
research, including adopting various patterns such as cross-border  
mergers and acquisitions and equity transactions to participate in the  
development, investment and operation of European clean energy  
projects, and leveraging the European green financial market to reduce  
financial costs and increase project returns through green bonds, green  
credit, green insurance, green funds, etc., to further improve the  
investment and financing environment, expand the scale of renewable  
energy development and utilization and stabilize the leading position in  
clean development, realizing high-quality coordinated development of  
economy and environment.  
5.1 Overview of European Countries  
The overall business environment in European countries is at  
the leading level in the world. According to the Doing Business 2020  
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issued by the World Bank, the ten key European countries and regions  
studied in this report ranked upstream among all 190 countries and  
regions and ranked among 4th-79th, and their rankings are relatively  
stable in recent years. Among them, Denmark, the UK and Norway are  
among the top ten.  
European countries attach great importance to the  
development and utilization of renewable energy, and there are  
good investment opportunities for renewable energy projects. To  
improve the energy supply shortage and achieve climate goals, most  
European countries have issued detailed and specific strategic schemes  
for renewable energy development, including medium-term and long-  
term goals and proportion of renewable energy consumption in various  
sectors. Meanwhile, they have issued preferential policies such as  
financial subsidies, tax breaks and financing facilities to support  
domestic and foreign investors to participate in and expand the  
renewable energy development.  
The level of diversified competition in the electricity market in  
European countries is among the best in the world. Most European  
countries have introduced market competition in the links of generation,  
transmission, distribution and retail, and adopt the advanced retail  
competition mode of splitting the generation, transmission, distribution  
and retail links. The power market has obvious diversified  
characteristics. Among them, the four Nordic countries such as Norway  
and Denmark have formed the Nordic power market that is one of the  
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typical power markets that have successfully operated in the world. The  
market mechanism is relatively sound and the market players are highly  
active. Spain and Portugal have formed a deeply integrated Iberian  
regional power market, with a high proportion of renewable energy  
installed capacity and power generation. European countries make full  
use of renewable energy to achieve the EU’s renewable energy  
development goals by forming a larger EU unified power market.  
Most European countries encourage and welcome foreign  
investment, but some countries have certain restrictions on energy  
and power investment. Denmark, the Netherlands, Spain and Greece  
have introduced policies to encourage foreign investment, and give  
additional preferential policies for investment in the renewable energy  
industry. France gives preferential policies for foreign investment, but  
has not yet formulated additional support policies for foreign  
investment in renewable energy. Norway and Germany stipulate that  
the foreign investors could enjoy the same investment policy as their  
own enterprises, and have not yet introduced special preferential  
policies for foreign investment. Iceland, Italy and the UK have set  
certain restrictions on foreign investment access to the energy and  
power industry. For example, Italy emphasizes the equal conditions  
with the source countries of investment, while Iceland stipulates that  
only Icelandic citizens and other Icelandic entities, as well as residents  
and legal entities from the European Economic Area could obtain the  
right to develop, produce and sell energy such as waterfalls and  
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geothermal energy for non-residential purposes.  
Most European countries have formulated supportive fiscal  
policies such as subsidies and tax preferences for renewable energy  
projects. Except Iceland that has restrictions on foreign investment in  
energy, most countries such as the UK, Germany, the Netherlands,  
Denmark, France, Italy and Greece have formulated various tax  
preference, direct financial support, feed-in tariff subsidy policies for  
renewable energy projects. The tax preference policies include  
reductions and exemptions of business tax, income tax and value-added  
tax, and maintaining a low tax rate system. The direct financial support  
includes providing funds for investment and operation of renewable  
energy projects and relevant technology research and development. In  
addition, the UK has also established enterprise zones for the renewable  
energy industry and provides preferential policies such as commercial  
interest rate discounts and rent reductions and exemptions. Germany  
and Italy provide preferential loan policies for renewable energy  
projects. The Netherlands and Spain provide financing facilities for  
renewable energy projects and implement lower financing interest rates.  
Most countries such as the UK and the Netherlands use the net metering  
mechanism at the end-use level to support the development of  
distributed renewable energy.  
Most European countries have loose management of land use  
by foreign investors, strict restrictions on foreign workers and strict  
environmental impact assessment system. Except Iceland that has  
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certain restrictions on the purchase of land by foreign-funded  
enterprises, most European countries allow foreign-funded enterprises  
to obtain the ownership and use right of private land through purchase  
and lease in their own countries. Generally, there is no restriction on the  
use period, and foreign-funded enterprises could enjoy the same  
treatment as domestic enterprises. Denmark, Norway, France and  
Greece require that foreign-funded enterprises must first apply to the  
government for approval before they buy or lease land. Foreign-funded  
enterprises in Iceland generally acquire land by signing long-term lease  
agreements. European countries have strict restrictions on foreign  
workers, and they all implement a strict work permit review system,  
and it is difficult to obtain work permits. In terms of environmental  
protection policies, European countries have implemented a strict  
environmental impact assessment review system for major projects, and  
the investment enterprises will be punished accordingly in case of  
failing to carry out an environmental assessment as required.  
5.2 Investment and Financing Proposal  
1. Participating in the development, investment and operation of  
European clean energy projects in various forms such as cross-  
border mergers and acquisitions and equity transactions  
The European energy and power industry has a good market foundation  
and large stock of assets, and foreign companies face high barriers to  
entry for greenfield investment and obtain operating permits. Local  
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energy and power companies often have mature resources and markets  
including complete sales networks, intangible assets such as patent  
rights, proprietary technology, trademark rights, and business  
reputation, stable raw material supply guarantee system, formed  
management system and human resources. It is recommended that  
foreign companies adopt patterns including cross-border mergers and  
acquisitions, equity transactions to obtain high-quality European energy  
and power assets, and participate in investment and operation of clean  
energy projects. This is conducive to smoothly acquiring the existing  
resources and markets of local companies, so as to quickly start  
production, develop and improve sales channels to expand market share  
and improve the competitiveness of clean project.  
2. Actively Participate in Investment and Financing of PPP  
Projects  
Europe is the region where the PPP model emerged and developed most  
maturely. The PPP model is preferred in renewable energy development  
in Europe. At present, most European countries have independent PPP  
legal systems and management mechanisms, and countries such as  
Austria, Denmark, Germany, Ireland, Italy, the Netherlands, Portugal  
and the UK have also set up specialized PPP agencies for management.  
Special consulting service agencies may be set up for PPP projects in  
the EU and some European countries, such as the European PPP  
Expertise Centre under EIB and the German PPP Competence Center,  
to provide management technical support and consulting services for  
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project planning, development, tendering, implementation and  
supervision. It is recommended that investment companies actively use  
PPP institutions and learn from the experience of European PPP  
projects to participate in PPP projects for European clean energy  
development.  
3. Financing through European Green Financial Market  
Europe is a pioneer in the development of global green finance, and the  
scale of Euro green bonds has grown rapidly since 2013. In the  
European capital market, due to the large number of institutional  
investors, renewable energy projects such as offshore wind power  
projects are gradually showing a trend of asset standardization, which  
is conducive to further facilitating project financing and improving  
project asset liquidity. It is recommended that clean energy projects use  
the European green financial market to develop green financial services  
such as clean energy project investment and financing, project  
operation, risk management for the clean energy sector, issue  
standardized green financial products, and use green financial bonds  
and green credit, green insurance, green funds and other methods to  
reduce financial costs, optimize financing structures, and increase  
project returns, so as to attract capital to green industries and promote  
the rapid development of clean energy.  
Europe is one of the most developed regions in the world, with a  
superior business environment and complete infrastructure. It attaches  
great importance to the coordinated development of economy and  
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environment. It is leading the world in terms of renewable energy  
technology development and investment in related areas. In recent years,  
Europe has actively responded to climate change and advocated green  
development. At the same time, some European countries are facing  
problems such as insufficient energy supply and lack of security, great  
pressure in emission reduction, debt crisis impact, and economic  
recession. There is an urgent need to further strengthen clean  
development and promote sustainable economic growth. This Chapter  
reviews the overall policy environment in Europe and the relevant  
policies of major countries, and proposes investment and financing  
suggestions, including adopting various patterns such as cross-border  
mergers and acquisitions and equity transactions to participate in the  
development, investment and operation of European clean energy  
projects, and leveraging the European green financial market to reduce  
financial costs and increase project returns through green bonds, green  
credit, green insurance, green funds, to improve the investment policy  
environment, reduce financing costs, increase foreign investment in  
renewable energy, and further promote clean development.  
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