The world’s green energy transition, which is essential to achieving net-zero emissions and halting climate change, is under threat, as a financial era of rising interest rates has made some projects, like new offshore wind farms, unaffordable.
Estimates suggest that Europe must now find an additional €163 billion to reach net-zero by 2050, with figures likely to be similar elsewhere in the world. As such, firms are pulling back from new projects.
Last week, Swedish energy firm Vattenfall announced it would stop work on an offshore wind farm in the UK’s North Sea, warning development costs for the Norfolk Boreas scheme had increased by 40 per cent due to rising interest rates and supply chain costs.
Rising interest rates have made the green energy transition more expensive.