Solar developers, asset owners and financiers bracing for impact of Ukraine conflict

The solar finance and investment community gathered at Solar Finance & Investment Europe 2022 today. Image: PV Tech.

Europe’s community of solar developers, financiers and asset owners are braced for broader impacts and headwinds caused by the ongoing conflict in Ukraine, with inflation and spiraling commodity prices highlighted as of particular concern.

A panel of European solar stakeholders at today’s Solar Finance & Investment Europe conference, organised by PV Tech publisher Solar Media, discussed how recent headwinds had impacted commodity prices as well as both the cost and availability of capital, with talk quickly centring on Russia’s invasion of Ukraine, which has caused significant turbulence in Europe’s energy industry.

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Wholesale prices throughout Europe are continuing to soar, while commodity price increases have escalated in recent days amidst threats and counterthreats over the supplies of oil and gas in Europe. Benchmark gas prices leapt by nearly 80% to €345/MWh (US$375) yesterday, while Brent crude oil jumped to a 14-year high of US$139 per barrel.  

Last week PV Tech Premium explored how the crisis in Ukraine holds the potential to change Europe’s energy apparatus beyond recognition, however today investors and developers alike voiced their immediate concerns, especially in relation to supply chains and the cost and availability of capital.

Aldo Beolchini, managing partner and chief investment officer at European solar investor NextEnergy Capital, said that PV industry needed to question whether or not its supply chain is secure, highlighting the potential for geopolitical issues to constrain supply in a similar fashion to how the Ukraine crisis has pinched Europe’s supply of gas.

“Are we relying on concentrated supply chains for key components? We don’t want to find ourselves in a similar position if the world takes a dramatic turn,” he said.

Giovanni Terranova, managing partner at Bluefield, stressed that the energy landscape was a “new world these days” and would require “new ways of thinking” if projects are to come to fruition given the impact both the COVID-19 pandemic and the conflict in Ukraine has had, and is likely to have, on inflation and interest rates.

“Big changes in alternative energy will be needed and we need to look at it through different lenses,” Terranova added.

Karen Boesen, CFO at independent power producer Sonnedix, said that events of the last month were unlike anything else the energy industry had seen, but stressed that the impetus remains on the PV industry to find solutions to surging headwinds. She noted the potential for portfolio optimisation and increasing digitalisation to bolster operational efficiencies, but equally highlighted the need for scale to help ride out fluctuations in component and commodity prices.

Solar Media’s Solar Finance & Investment Europe 2022 conference continues over the next two days at London’s Victoria Park Plaza hotel. Last-minute tickets for the event can still be purchased here.

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