Credit FAQ Examines Why Regulatory Risk Is Assuming A Greater Significance For Renewable Energy Projects In Europe

Ambitious targets for clean energy generation in the EU, coupled with political reactions to the recent nuclear crisis in Japan, are fueling interest in renewable energy. But despite the momentum behind renewable energy projects, Standard & Poor’s Ratings Services sees signs that regulatory risk is becoming a bigger issue for these projects in Europe.

In a Credit FAQ titled "Why Regulatory Risk Hinders Renewable Energy Projects In Europe," we address the following questions:

What is Standard & Poor’s approach to analyzing renewable energy projects?

Why has regulatory risk become more significant for European renewable energy projects?

How does Standard & Poor’s determine whether the regulatory system is likely to support a project’s credit quality?

How sustainable is the financial support for renewable energy in EU countries, in Standard & Poor’s opinion?

Are Feed-In Tariffs the only incentive Standard & Poor’s considers when assessing regulation and regulatory risk

When analyzing renewable energy projects, does Standard & Poor’s assume that regulatory support will remain constant?

How does Standard & Poor’s assess uncompensated reductions in the regulatory support or incentives that were promised to a project at the outset?

Does Standard & Poor’s apportion a similar level of regulatory risk to all renewable energy projects in a given jurisdiction, irrespective of fuel source?

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