Wind power is poised to be at the heart of the sustainable energy transition and could generate 35% of our total electricity needs by 2050. In order to achieve this target global onshore wind capacity must increase nine-fold by 2050 and offshore wind capacity must increase by over ten-fold.

Rapid growth in wind power capacity worldwide will require rapid growth in wind financial markets, which connect wind farm developers to investors providing finance. We study this network of developers and investors, exploring its structure and dynamics over time. Each individual investor and every co-investment they make is included in our analysis, affording critical insights into how investors behave and the conditions which encourage them to invest more and faster.

We find that investor hubs are a characteristic feature of mature wind markets – these are investors whose investment activity is significantly higher than the average. Moreover, some investor hubs hold international influence by investing in several leading wind markets. The figure above shows the activity of the international hubs in 2010 and 2019. In 2010 only three international hubs are active: two commercial banks and one public bank. But by 2019 there is a dramatic increase in the number and activity of international hubs, many of whom are commercial banks. Strong cross-border finance flows and the increased involvement of the commercial banking sector reflects growing confidence in wind power and the attractive commercial opportunity it now presents.

The more recent involvement of large commercial banks may also be driven by sustainability mandates and the increasing pressure on financial corporates to fund sustainable projects following the Paris Agreement. Strikingly, two Japanese banks (Sumitomo Mitsui Banking Corp and MUFG Bank) lead the international activity, investing heavily in four leading foreign markets while their domestic wind market is still relatively small. Both banks have been top issuers of green bonds since 2015.

Our forthcoming paper (‘A recipe for fast-growing wind financial markets’. Rickman J., Larosa F., Ameli N.) explores further the role of investor hubs in the wind markets and the conditions which enable market growth.