Renewable Energy Industry in EU

The European Union has been an active player in increasing the usage of renewable energy since the year 1997. It also agreed on a strategy that will help to increase the share of renewable energies in the domestic energy consumption. The member states of the EU also participate in achieving the targets set in the electricity production with the help of renewable sources.

Majority of the member states of the European Union have now realized that targets of renewable energy could not be achieved without the proper support from the government. The government of these countries has also granted the necessary support that is helping to eradicate the barriers that halt the growth of use of renewable energy. This has also led the government to seek foreign investment in the sector.

The European Union Commission and the national governments of the member states are keeping no stone unturned to attract foreign investment in this sector and have already made investor friendly economic policies that will encourage investors to invest in this sector.


The Renewable energy is now considered to be an expanding industry in the European Union which promises lots of capabilities in the numerous technologies. This positive trend in this sector is mostly due to the rapid increase in the Research and Development which has raise the standards of availability, reliability and performance of the renewable energy sector. Today, the European Union has become a world leader in producing renewable energy technologies. This indicates that there is loads of positive trend prevailing in the European Union markets which are showing tremendous growth prospects in the coming future.

Market size:

The European Union, along with the US and Japan, is one of the principal market for the renewable energy industry. This is mostly because of the fact that all the member states have dedicated themselves towards environmental protection and have already taken steps to encourage the use of renewable energy.

Key players:

The key players in this sector are mostly Danish companies which have a presence not only in the EU market, but also in the world market. There are also some Spanish companies, such as MADE and Gamesa, which have made their presence felt in this sector in the EU.

Growth figures and FDI figures:

The renewable energy market of the European Union is growing at a rate of 2-30 billion Euros of which the biomass and offshore wind energy were the major contributors in the growth. As far as FDI is concerned, the European Union has managed to attract lots of it in the recent past. The European Union managed to attract 524 investments which accounted for more than 30% of the FDI share in the entire world. Until now the western part of the Europe wherein there are countries such as Germany, Italy and Sweden have attracted a foreign capital worth 61,328 million Euros.

Key investment areas:

There are various individual sectors in the renewable energy. Some of these sectors include the wind energy, photovoltaic and biomass. The European Union is in fact the largest market for wind energy developments. It is estimated that the wind energy capacity of EU is expected to grow up to 60GW. The same thing applies to the photovoltaic market whereas the biomass sector is going to contribute a major chunk of the electricity production in the coming years.

FDI/ Investment policy:

The EU policy on renewable energy gives a lot of importance towards increasing the use of renewable energy. This is mainly because of the effect that the use of renewable energy would have in the diversification of the energy supply and in improving energy security as well as enhancing environmental protection and economic as well as social cohesion. The policy of the EU on renewable energy is based on the EU’s White paper for a Community Strategy and Action Plan whose main objective is to increase the share of the renewable energies in the gross domestic energy consumption all around the EU. For this, the EU has laid down legislations which focus on overcoming the hindrances and develop a more conducive environment to boost the renewable energy sector. It is also liberalizing gas and electricity markets.

Special incentives:

The European Commission is providing lots of non-technical incentives to the investors looking to invest in the renewable energy sector. These incentives are mostly in the form of framing mild legislative and financial policies, providing financial support in the form of loans, subsidies and grants for investment in the Renewable energy projects and also several other fiscal and political encouragement.


There is a council known as the European Renewable Energy Council (EREC) which works for the betterment of the renewable energy industry. Apart from these, there are also national agencies of majority of member states that help investors by providing necessary information with respects to investing in this sector.

A positive growth trend in the future, investor friendly policies and legislations and the need to protect the environment from the effects of global warming, all these factors have really made the European Union one of the best places to invest in the renewable energy sector. Investors who wish to invest in the European Union would really find this sector promising due to the growth prospects it possesses and the future it holds for the world.


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