European Wind Power Action Plan. Key Points for Investors and Energy Producers
The European Commission has unveiled a new plan to support the European wind industry and promises to deliver on 15 action points across six areas of interest, including faster permitting, updated auction support design and better access to finance. Here is what stakeholders in the European wind industry can expect in the near future:
1. Permitting: acceleration through digitalisation and training
- Having identified slow permitting as one of the main bottlenecks for the expansion of new renewable energy sources in Europe, the European Commission will prioritise the digitalisation of national permitting processes in Member States. Although there is no specific deadline for the full substitution of paper documents with their digital counterparts, online RES permitting procedures are likely to emerge in Europe already in 2024.
- To support this transition, the European Commission plans to roll out a training programme for national permitting authorities. This could potentially contribute to the unification of the approach to permitting matters across different countries, reducing uncertainty for investors with international portfolios of wind projects.
2. Grid: separate action plan for electrical grids
- Limited grid capacity is a major constraint on the development of new wind and solar projects in Europe. The European Commission announced that it will adopt a dedicated action plan for grids as early as November 2023. The action plan will facilitate the improvement of existing grid systems and the development of new ones, although no detailed measures have been announced yet.
- Crucially, the European Commission intends to take measures to “increase visibility of existing capacities”. Specific solutions are yet to be announced, but investors will certainly welcome regulations that would oblige grid operators to disclose where new projects can be located and what their capacity can be.
3. Updated auction design: penalties for non-execution of projects
- According to the European Commission, projects that won renewable energy auctions but were subsequently abandoned or delayed harm the European wind market and hinder the achievement of EU renewable energy targets. To ensure that renewable projects are executed fully and on time, the European Commission will take action to introduce penalties for abandoned or delayed projects. Such measures could negatively impact business models where projects secure support early in the development process but then pull out if selling energy on market terms proves more profitable.
4. Financing: counter-guarantees from the European Investment Bank
- The European Investment Bank is working together with the European Commission to launch a new instrument that would counter-guarantee commercial banks’ credit exposures to wind industry suppliers. The European Commission’s objective is to ensure broader access to advance payment and performance guarantees, thus making it easier for investors to develop new wind projects using European manufacturing capacity. This credit de-risking tool should be in place by Q4 2024.
5. Next steps: European and national legislation
- The European Wind Power Action Plan is not legally binding, and its implementation will require the adoption of dedicated European and national legislation. The timelines set by the European Commission are not the same for all categories and action plans, but, overall, the new measures are expected to be adopted by the end of 2024.
