This article is featured in our Q1 2023 Global Renewables Market Update, a comprehensive analysis of North American and European renewable energy markets, current PPA pricing developments, policy movement, and trends shaping the global renewable energy landscape. Click here to read and download the full report.
Despite efforts by the EU to simplify permitting procedures for renewable energy projects, the speed and effectiveness of local adoption varies. While expanding access is at the center of many of the most recent EU interventions, challenges in local adoption persist in most European countries. Generally, lengthy permitting processes, not-in-my-backyard (NIMBY) attitudes, and interconnection queues due to grid underinvestment significantly stall project development pipelines.
Several countries continue to face challenges around project development due to conflicting guidance between local and EU law. In the Netherlands, onshore wind is still experiencing a backstop. This is due to current environmental regulations for the operation of onshore wind projects, which are unaligned with EU law. As such, projects have been stalled.
While now resolved, similar issues had occurred in Denmark, where all new applications for offshore wind farms had been suspended due to concerns around the breach of EU law. This had endangered the offshore wind pipeline, which amounts to nearly 20 GW of capacity. Fortunately, the government has started to issue new offshore wind tenders. In Croatia, project development is challenged by permitting issues. The country enacted new renewable energy laws in 2021,15 but critical bylaws covering grid connection and extended environmental permitting have not yet been adopted, causing significant delays in renewable deployment.
In contrast, Spain continues to take steps to accelerate renewable development. Regulators have cleared hundreds of applications (amounting to over 84% of the queue) for environmental impacts assessments (EIA) for renewable projects. This is a relatively challenging step in Spain’s regulatory process and has allowed these projects to move closer to ready-to-build status. Given that project development is often delayed as a result of these hurdles, companies seeking to hedge their longer-term electricity prices and reach their decarbonization goals should act swiftly to engage in the PPA sourcing process. Project development constraints in many countries can put corporate procurement ambitions at risk.
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