Wind and sun are free, but it’s harder to get renewable energy projects built these days. Here’s why

SPRAKEBUELL, Germany — The wind gusting across north German farm country brings much to the village of Sprakebuell: fog and rain from the sea, the occasional migrating stork, the faint smell of manure in the newly fertilized fields. It’s not easy when headwinds from the post-pandemic global economy — including high interest rates and inflation — are holding back often costly investment in wind, solar and other forms of clean power. Interest rate hikes from the U.S. Federal Reserve, the European Central Bank and others have economists at University College London warning of “green collateral damage” and calling high borrowing costs meant to fight inflation “terrible news for the green transition.” Consultancy Wood Mackenzie found that “clean energy has witnessed one of the toughest years in its short history” with government calls for more generating capacity going unfilled in Germany, Spain, the U.K. and Italy. “Renewable energy projects are visible in the landscape, and for me, it’s very important that local people can identify with these projects,” said Christian Andresen, whose company, Solar-Energie Andresen GmbH, developed the wind farms and solar installations. In the U.S. higher rates have been a “speed bump” for some renewables projects, said David Shepheard, North American energy and utilities partner at global consultancy Baringa.