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Europe’s current permitting regulations are not aligned with the bloc’s emissions reduction goals

The European Union is gearing up its climate ambitions. Last year the EU agreed to reduce greenhouse gas emissions by 55% by 2030. To make this possible the European Commission is putting together the so-called “Fit-for-55 package”. The package will increase Europe’s renewable energy target, reform of the EU Emission Trading System (ETS) and revise other key legislation. All this points to an accelerated uptake of renewable energies. Great times for wind energy, you might think. Alas, Europe is not building enough new wind farms to deliver the new 55% greenhouse gas (GHG) reduction target. The EU will only build 15 gigawatts (GW) of new wind capacity a year over 2021-2025. But the 55% goal needs us to build 27 GW a year. The problem is not technology, finance or costs. It is permitting. Europe is simply not permitting enough new wind farms to meet its renewable energy targets. Permitting rules are too complex, procedures too slow and often the permitting authorities are not adequately staffed to process permit applications as fast as they should. This creates additional costs and increases the development risk of wind farms. In many countries, it takes five years or more to permit a wind farm. That deters investors from putting their money into wind.

TROUBLED OUTLOOK

Because of their inefficient approach to permitting, 11 EU countries are already at risk of missing their existing 2030 commitments for the expansion of renewables. Even more countries would fall short of delivering the increased renewables targets that come with the new 55% emissions reduction goal. The long-term outlook for wind energy looks outstanding on paper. To deliver the Green Deal the EU aims to have 1000 GW of onshore wind and 300 GW of offshore wind by 2050—up from 165 GW onshore and 15 GW offshore today. But even the most ambitious targets for wind energy expansion remain academic if we do not get permitting right. The EU’s Renewable Energy Directive already imposes a two-year deadline on the Member States for deciding on permit applications and this comes into force in July this year. It requires them to have a one-stop-shop for information on permits. But what is missing is a strong and common understanding across Europe of how to simplify permitting rules and procedures. The Commission should actively disseminate best practices to guide Member States and act as a clearing house, praising and elevating good practice where it exists. Quantitative performance indicators can play a role here too.

POLITICAL BARRIERS

Aside from procedural hurdles some Member States need to radically change their approaches to wind energy. Take Poland, for instance, which wants to reduce its dependence on coal. Wind energy is perfectly positioned to help Poland deliver its transition to cleaner energy. But in 2016 the country’s government introduced a “10h” distance rule which says new onshore wind turbines can only be built if they are at least ten times the tip height away from any house—in practice two kilometres. This rules out new wind farms on around 99% of Polish territory. Onshore wind is the cheapest form of new power generation capacity in Poland. But the 10h rule makes it close to impossible to get new permits for onshore wind. Some old projects (with permits awarded before 2016) are still being built but they have to use the technology that was in their original permit application instead of using the most modern turbines. The Polish wind farm developers often struggle to find manufacturers that still produce these older turbines. The 10h rule is crippling onshore wind development in Poland. It is good that the Polish Government is now looking into revising the excessive rule. They have already held one public consultation on it and now Anna Kornecka, Poland’s deputy minister of development, labour and technology, has given public signals of intent towards a revision of the rule. The Polish Entrepreneurs Federation are also advocating for more onshore wind as a key factor for the future competitiveness of Poland’s industry, especially the energy-intensive sectors.

PURCHASING POWER

The interest from large corporates to source renewable electricity through corporate Power Purchase Agreements (PPAs) has been on the rise in Europe for the past years already. With nearly 4 GW of capacity contracted through PPAs across 12 countries, 2020 was a record year for new PPAs. Polish companies now also source their electricity through PPAs. Recently the Polish steel manufacturer Commercial Metal Company Poland (CMC) signed a long-term PPA demonstrating their engagement and support for the energy transition in Poland. To further facilitate the uptake of PPAs, the Fit-for-55 package should oblige all Member States to issue Guarantees of Origin to renewable electricity producers, irrespective of whether the renewable energy projects receive Government support. Guarantees of Origin make electricity from wind “traceable” and are key to corporate PPAs. Wind energy will continue to bring economic benefits to communities in Poland and the rest of Europe. The wind industry today generates €2.5 billion of value added to the EU economy for each new gigawatt of onshore wind installed. It pays €5 billion in taxes to the EU economy, including €1 billion in local taxes and other payments benefiting communities. Onshore wind turbines create lasting jobs in rural areas while offshore wind revives coastal regions. That is why it makes economic sense for the European Union to place wind at the centre of its Fit-for-55 package.

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