Tuesday, October 19, 2021
HomeRenewablesWind and solar energy to build back better
Powered by

Wind and solar energy to build back better

Clean technologies have continued their march forward, delivering further cost declines, increasing their performance and entering more markets. According to the 2021 edition of Dentons’ guide, Investing in renewable energy projects in Europe, it looks like 2020 will deliver yet another record for new wind and solar installations, which Dentons’ partner BloombergNEF expects to reach 200 gigawatts (GW) globally, far surpassing any competing technologies.

Indeed, renewables played and will continue to play an important role in the European Union as to access the recovery fund (Next Generation. EU), each Member State must draft a recovery and resilience plan (RRP) which must allocate at least 37 per cent of funding to climate-related spending and the Commission has identified renewable energy as a priority for the RRPs.

Wind is the right bet to build back better

Despite experiencing major disruptions in the first half of the year, the European wind energy sector proved resilient: turbines produced a record amount of electricity, governments held auctions and the industry continued to build new wind farms applying strict health and safety protocols. With reduced electricity demand and less thermal generation, wind covered 17 per cent of Europe’s electricity demand in the first half of 2020, seeing also a record 14.3 billion euro raised for the financing of new wind farms. For Brussels-based association WindEurope, this is a clear signal: wind is the right bet to build back better.

Following the Green Deal targets, the EU aims to become climate neutral by 2050 and it wants wind to account for half of Europe’s electricity which entails a huge expansion in onshore and offshore wind between now and then.

“If European governments fully implement their National Energy and Climate Plans, improving their current approach to permitting and making the most out of the EU’s recovery strategy, the EU will have 392 GW of wind capacity by 2030, up from 192 GW today,” wrote Giles Dickson CEO of WindEurope. “That would increase jobs from 300,000 to 450,000. This is an opportunity we simply cannot miss.”

Focus and priorities are shifting towards wind and solar

Also, solar PV power in the EU has shown strong resilience in 2020 despite COVID-19. EU member states installed 18.2 GW of solar power capacity in 2020, 11 per cent more than in the previous year.

The Czech Republic has been ahead of its 2020 RES share target: its solar PV capacity increased by 23 MW in the first half of 2020 and the National Energy and Climate Plan expects at least 2,000 MW more to be built before 2030. Among the key drivers of public funding of RES in the next few years, there is the proposed Modernisation Fund which aims to use resources from the sale of emission allowances to subsidise projects through nine programs, which will focus in the first wave on the development of new non-fuelled RES, modernisation of heat supply networks, improved energy efficiency and reduction of industrial greenhouse gases in the EU ETS installations.

Overall, members-led association SolarPower Europe forecasts additions of 22.4 GW in 2021, 5 per cent higher than forecast last year. As underlined by CEO Walburga Hemetsberger, the crucial topics under discussion to speed up solar growth include ambitions for the Clean Energy Package 2.0, tackling the gap on carbon pricing, initiatives to tap Europe’s gigantic rooftop solar potential and power grid constraints.

“While most member states are increasingly seeing total solar capacities grow and have acknowledged solar in their National Energy and Climate Plans (NECPs) to meet 2030 EU targets, most of these deployment levels are still not ambitious enough,” she noted. “We are seeing market leaders, such as Germany, putting regulatory obstacles in the way of solar that make investments much more difficult and thus slow down long-term growth. This is not the way forward if we want to achieve climate neutrality by 2050.”

Georgia is one of those counties where the government’s focus and priorities have moved from hydropower plants (HPPs), the most established technology, towards wind and solar, partly in order to reduce reliance on imported electricity during periods when HPPs generate less power. The country’s energy market will undergo significant changes from July 2021, improving the environment for potential investors to capitalise on the untapped potential from hydro, wind, solar, geothermal and biomass sources.

And when it comes to unexploited natural RES resources, we have to look to Romania. Despite the legislative agenda moving forward, further measures need to be taken in order to meet investors’ expectations, especially regarding support schemes. Looking further ahead, although much remains to be done before developers can exploit the tens of GW of potential for wind generation in the Romanian Black Sea, a law on offshore wind is now progressing through parliament. Offshore wind is seen as potentially playing a big part in a future green hydrogen industry in Romania. Also, pilot renewable hydrogen projects are taking shape and a preliminary regulatory step has been taken in relation to licensing hydrogen producers.

More technological drivers

Among other technologies, lithium-ion battery prices have gone down almost 90 per cent over the last 10 years, helping decrease the cost of flexibility services in power grids and electric vehicles. Thus, EV sales are expected to grow 28 per cent over 2020, on the back of record growth in Europe, despite the crash of the wider auto market during the pandemic.

This progress on the technology front is now increasingly being recognised by, and matched with, commitments in the financial community and orporate decarbonisation commitments have accelerated throughout 2020.

For BNEF, 2021 must be the year where we start focusing on execution, especially in Europe. Without a change in the deployment of sustainable technologies and phasing-out of fossil fuel assets, the EU will miss its new climate target of 55 per cent emissions reduction by 2030 against 1990 levels. This level of ambition means that the transition needs to accelerate and spread to every country and carbon-emitting industry in the region.

Sign up to our biweekly newsletter


    Most Popular