This week, I keep coming back to a statement from WindEurope, the industry group, made before EU Energy Ministers met on 26 June to talk about energy policy for the next decade.
“Capital flows to clarity.”
These words sum up how private investment really works, at least in my experience advising clients on energy infrastructure.
WindEurope is calling on EU Energy Ministers to commit to a binding renewables target for 2040. Without it, they argue, Europe risks stalling the investment momentum that has made renewables its most powerful energy security tool since the Ukraine crisis began. The EU’s 2030 target worked. It accelerated deployment, shielded the continent from fossil fuel price volatility, and unlocked billions in manufacturing investment. Wind alone now provides 20% of Europe’s electricity and supports over 440,000 jobs across more than 250 factories. The European wind industry has invested more than €15 billion in new and upgraded factories in the last three years alone.
But after 2030, things become uncertain. As WindEurope says, capital needs certainty.
The Policy Gap and What It Creates
Not having a binding 2040 target doesn’t mean renewable energy projects will stop after 2030. Solar and wind are still strong investments on their own. But the lack of a target does change how investors see the risks for big, long-term projects.
Investing in energy infrastructure is a long-term commitment. Solar parks and battery storage can last 25 to 40 years. Wind farms are planned five to eight years before they start producing power. Investors need to see not just the construction phase, but also what the policy landscape will look like throughout the asset’s life.
When there isn’t clear policy, major investors usually do one of three things: they wait, they demand higher returns to cover the extra risk (which means lower returns for projects that go ahead), or they invest in places where the policy is clearer.
None of these outcomes serve the EU’s energy security objectives. And the twelve EU member states currently pressing the European Commission to extend the Modernisation Fund beyond 2030 understand this acutely. As Euronews reported this week, Croatia, Bulgaria, the Czech Republic, Poland, Romania and seven others have written directly to the Climate Action Commissioner arguing that the fund, which has mobilised over €57 billion since 2021, cannot simply be switched off in 2030 when the transition it is financing is nowhere near complete.
These countries rely most on fossil fuels in the EU. Their energy systems are based on coal, gas, and nuclear power. Switching to renewables will require a lot of investment, and it’s harder to attract private money without public support and clear long-term policies.
What This Means for Private Capital Positioning
This is the key investment takeaway for my clients.
EU policy uncertainty doesn’t affect all energy investments the same way. It hits hardest for investments that rely on policy-driven revenue, like listed funds that react to regulatory news, and early-stage projects in markets where permits and grid connections depend on politics.
It has much less impact on private, structured investments in assets with guaranteed revenues, in places where policy is already clear, and in sectors where the business case is strong even without subsidies.
Portugal is worth noting here specifically. It is not among the fossil-fuel-dependent economies pressing for an extended Modernisation Fund. It is among the markets already identified by the European Commission as an example of good practice in renewable energy deployment. Its grid hybridisation approach, combining solar generation with co-located battery storage, is ahead of where most European markets currently sit. The policy environment there is not dependent on a 2040 EU target to make individual projects viable.
“Without a binding 2040 renewables target with dedicated wind volumes, investment signals become confused. Once industrial capacity is lost, you can’t claw it back.” Tinne van der Straeten, CEO, WindEurope
The UK government made a related point this week, confirming over £100 billion of private clean energy investment secured since taking office, including £27 billion mobilised through this year’s renewable energy auctions alone. That level of capital mobilisation shows a domestic policy environment with clear targets and visible government commitment. The IEA’s World Energy Investment Report 2026 estimates that globally around $2.2 trillion is expected to flow into clean energy this year. Clarity produces capital. The EU needs to demonstrate the same beyond 2030 if it wants to sustain equivalent momentum.
The Structural Advantage of Private Infrastructure Exposure
The bigger point I often discuss with clients is this: the energy transition is underway. The direction is clear. What matters now is how fast it happens, what policies shape it, and which investment structures can benefit without being exposed to policy-driven ups and downs.
A listed renewable energy vehicle is exposed to that volatility directly. Its valuation moves with policy announcements, discount rate changes, and the market’s shifting view of where power prices will be in 2035. I covered this in detail recently in my piece on why Europe’s solar market is splitting in two, where a major listed solar fund’s 20% NAV decline illustrated exactly this situation.
A private infrastructure fund with guaranteed revenues and long-term contracts is mostly protected from that kind of volatility. That’s why I focus on structure when clients look at energy infrastructure investments. The sector is solid and the long-term outlook is strong, but the way you invest in it affects the risks you take on.
For clients interested in understanding how structured private capital is being deployed into solar and energy storage infrastructure, the Solar45 strategy at Univere Investments integrates solar development with co-located battery storage in Portugal, while the Baloico strategy takes a complementary infrastructure lens to Iberian energy assets. Both are designed for qualified professional investors. The conversation begins with the documentation.
If you want to discuss how policy affects investment choices, I’m happy to help. You can learn more about my work with clients at Stuart McKenzie Consultancy.
