As countries seek to reduce their reliance on fossil fuel imports from Russia, the prospect for renewables has never looked brighter. While it is intermittent, the output from wind and solar projects is emissions-free and effective in improving a country’s energy security, particularly for those with strong natural resources such as sunny Spain or windy Britain.
However, the time it takes to develop, certify and connect these projects can be lengthy — posing a roadblock to the faster integration of renewables into national energy mixes. Both Red Electrica Corp. in Spain and National Grid Plcin the U.K. are receiving very high interest from developers wishing to build new renewable energy projects, according to interviews conducted by BloombergNEF. Both grid operators have backlogs of projects waiting to be built — for which the connection permits have already been granted and that will require environmental permits, financing and potentially policy support to advance to construction stage.
Grid access requirements are the first hurdle for project developers to overcome, meaning that many projects with grid access granted do not end up being built. While in a state of limbo, these projects can occupy theoretical space on the network, preventing other project proposals from moving ahead.
More solar in Spain
“We try to ensure that the grid doesn’t pose a limitation to the rapid installation of new power plants, but there are many other factors that do not depend on grid availability,” Miguel de la Torre, head of electrical planning at Red Electrica, told BloombergNEF. One of these is Spain’s auction system, which has been dormant in recent months. Since July 2021, new regulation has required Red Electrica to inform the government on a monthly basis about nodes on its network with room to connect more than 100 megawatts of additional capacity. The energy ministry can then decide whether to publish auctions specific to particular nodes, de la Torre said. No auction has occurred since July, but could occur in the near future, he said. Developers can also proceed with project development without the support of auctions, by signing power purchase agreements (PPAs) with large corporates for the energy output, for example.
In Spain, grid access has been granted to 145 gigawatts of potential solar and wind projects — far in excess of what the government aims to have installed by 2030, de la Torre said. The access granted is twice that required to meet the country’s 2030 wind target and four times that for solar, but then again, many of these potential projects may not ultimately be built. The country has almost 15 gigawatts of solar capacity installed currently, and is adding between 3 and 5 gigawatts per year on average, de la Torre said. Since 2019, he has seen a “rapid evolution” in the installed capacity of both utility-scale and rooftop solar. The European Union plans to cut Russia gas imports by over two-thirds in 2022, and expects to be able to do so partly from installing additional rooftop solar generation.
Red Electrica also plays an important role in maximizing the generation from existing assets. “One challenge is to maximize production from solar,” de la Torre said. “Our role is to identify places where curtailment will happen, and focus on reinforcing the network there, while maximizing the usage of the existing grid.”
U.K. momentum
Developers in the U.K. have shown strong interest in building new renewable energy projects since before the Russia-Ukraine war led governments to seek ways to quickly reduce reliance on Russian energy exports. The U.K. will phase out imports of Russian oil by the end of 2022.
In the last four years, there has been a quadrupling in applicants to the U.K. power system, and this year the number is expected to rise even further, said Roisin Quinn, director of customer connections for National Grid Electricity Transmission. Her team are “looking at ways to cut days, months and even years out of the connection process,” Quinn told BNEF. Options could include removing the need for new power lines or circuits, developing new connection designs, and speeding up the time it takes to do design, construction and development work, she said.
There are queues of developer contracts waiting to connect to the U.K. network, which have already been granted access to do so, but that now must secure financing, policy support and environmental permits in order to proceed, Quinn said. “We could do with freeing some stuff up — that would help us more easily articulate when customers can connect,” she said.
The transmission operator is looking at ways to improve queue management — to identify where contracted projects are unlikely to proceed, and to remove them from the lined-up capacity, freeing up space for others. “That will be really powerful in getting more projects online,” said Quinn. “There will be projects still on the register, where the developer no longer plans to take them forward, and they will be part of the reason why other projects don’t get connection agreements,” she said.
Some 22.5 billion cubic meters of Russian gas imports could be displaced by wind and solar in the EU this year, according to EU targets.