Journal
ENERGY POLICY
Volume 105, Issue -, Pages 512-523Publisher
ELSEVIER SCI LTD
DOI: 10.1016/j.enpol.2017.02.048
Keywords
Policy risk; Onshore wind; Solar PV; Weighted average cost of capital; Energy policy; Greece
Funding
- Intelligent Energy Europe (IEE) Programme within the framework of the project DIA-CORE - Policy dialogue on the assessment and convergence of RES policies in EU Member States [IEE/12/833/SI2.645735]
- European Commission [642260]
- European Climate Foundation [EPONL17190]
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Significant renewable energy (RE) investments have to be implemented in order to achieve the ambitious RE targets set in the EU for 2020 and beyond. Moreover, a great amount of capital has to be leveraged, as these projects are followed by high investment and financing costs. Main aim of this paper is the provision of a comprehensive assessment of the existing risk elements of RE investments in relation to the respective policies and the evaluation of their impact on the weighted average cost of capital (WACC) in Greece. A consultation procedure with key national energy stakeholders took also place, including policy makers, project developers, investors, equity providers, bankers and energy analysts in the Greek RE market, in order to provide a validation of the respective results. It has been concluded that the policy design risk represents the risk element with the greatest impact on the cost of capital and, thus, the level of RE investments' deployment. Based on the cost of capital valuation process followed, the WACC was estimated to reach approximately 12% for onshore wind and little lower values for solar PV projects in Greece.
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