Spain risks dropping some 100 GW of renewables due to bureaucracy - report
The Cruz de Carrutero wind farm in Palencia, Spain. Image by Iberdrola (www.iberdrola.com)
The Spanish ministry for the ecological transition is scrambling to issue environmental permits for hundreds of large-scale renewable energy projects ahead of its own deadline on January 25, risking lawsuits from developers who will lose all financial deposits on that date if left empty handed, El Mundo reported on Thursday.
Clogged bureaucracy at the ministry, which issues environmental impact assessments (EIAs) for 50-MW-plus projects, is unable to cope with the amount of applications and could wipe out close to 100 GW of renewables due for approval before January 25, according to the report.
The minister, Teresa Ribera, is said to have called for all hands on deck within her department, asking staff to process the applications and push them out of the bureaucratic pipeline as fast as possible. The perception within the department is that renewables developers will sue the government if they fail to obtain the EIA before the January 25 deadline through no fault of their own, El Mundo writes.
Deadlines to obtain each permit in the permitting process for renewables were introduced back in June 2020. The ministry for the ecological transition conceived the measure mainly to prevent certain developers from sitting on grid access and other rights for too long, while pitching the projects for sale to big money investors in search of assets in Spain’s hot renewables market.
This lucrative business incentivised hoarding of grid permits, created portfolios with more renewables capacity than Spain’s power system can absorb and made it more difficult and expensive for serious projects to get ahead, according to the ministry.
In June 2020, Spain’s bureaucracy was dealing with over 430 GW worth of requests for grid access rights, with many of them sought for projects in immature stages. To clear the pile, the ministry invited permit holders to give up the rights and claim deposits, imposed a moratorium on new requests for grid access and established deadlines for each of the permits. Project developers that fail to meet any of the series of deadlines will lose financial deposits and all permits gathered by then.
Demand for Spanish renewables has not waned, and on top of applications that need to processed by January 25, new ones were added to the queue.
The biggest challenge in the whole process has been obtaining the EIA, on which subsequent permits rest -- consent, construction and plant operation licence. According to El Mundo, it is not just the ministry that is flooded. Regional governments, which handle projects of below 50 MW, are also overwhelmed with applications, and in some regions, the number of permits to process tripled in the past two years, the news outlet reported.
At the request of exasperated regional governments, the ministry extended the deadline once, in December 2021, giving breathing room of nine months. Minister Ribera has announced she will not be approving any more extensions, El Mundo reported.
Sladjana has significant experience as a Spain-focused business news reporter and is now diving deeper into the global renewable energy industry. She is the person to seek if you need information about Latin American renewables and the Spanish market.