At today’s high-level Policy Roundtable in Brussels — “Unlocking Growth: How Financial Tools Can Fuel EU Clean Tech Leadership” — we brought together members of the European Parliament, renewable energy associations across Europe, and member state representatives. The goal of this roundtable was to get a shared understanding of how a diverse set of financial instruments – ranging from monetary policy to EU-level mechanisms and national support tools – can help unlock investment and strengthen Europe’s leadership in clean tech and renewables.
Key takeaways from today’s session: we need faster permitting, demand creation could be a good opportunity to de-risk investments in clean energy, and we need more focus on instruments such as guarantee funds, PPA’s and contracts-for-difference.
Key speakers included Olof van der Gaag, Chairman of the Dutch Association for Sustainable Energy (NVDE) and Phil Cole, Director of Industrial Affairs at WindEurope.
Phil Cole explained how the European Investment Bank’s counter guarantee tools could unlock private capital for clean tech and renewable energy, while overcoming investment barriers in clean tech. The open discussion further examined investment barriers in the renewable energy sector and what could be done to de-risk green energy investments.
In Olof van der Gaag his presentation, he highlighted an important bottleneck for renewables: Renewable energy projects typically have high initial investment costs, which makes them very vulnerable to the interest rate, and thus the policy of the European Central Bank. Rising interest rates are therefore disproportionately harming clean tech investments across Europe, while fossil fuel projects are not so much affected by monetary policy. A Dutch case study revealed that recent interest rate hikes could add €17 billion in costs by 2030, and up to €163 billion by 2050, undermining business cases and investor confidence.
Van der Gaag urged the ECB to consider a “green interest rate” through Green TLTROs (Targeted Longer-Term Refinancing Operations). This would allow lower interest rates for sustainable projects, with the EU Taxonomy serving as a way to define green lending. Similar instruments are already being implemented in countries like Japan and China.
The session also addressed how renewable energy contributes to price stability — the primary ECB mandate — by reducing exposure to fossil fuel-driven inflation. Fossil energy was responsible for over 50% of inflation in 2022, and Christine Lagarde herself mentioned renewable energy will result in more stable and lower energy prices. A shift to renewables not only supports climate goals, but also strengthens Europe’s geopolitical and economic resilience.
A case study in the Netherlands showed that a green interest rate could lower electricity grid tariffs by 10%, benefiting households and SMEs across Europe.
Olof van der Gaag presentation in PowerPoint and text.