Spain, in the tail in the execution of green projects due to the bureaucratic traffic jam

Spain, in the tail in the execution of green projects due to the bureaucratic traffic jam



The Government approved last week 170 environmental impact declarations of more than 200 construction projects renewable energy. An administrative advance in the sector that was looked at with a magnifying glass after more than two years of traffic jam. The international investment bank continues to notify its clients that Spain has a bureaucratic problem in the processing of these projects.

Credit Suisse warn in their reports about this situation. The Swiss bank analyzes in a report that it shares with investors and companies, to which Vozpópuli has had access, that 2023 will be “another year of major political intervention”. In reference to Spain, Credit Suisse points out that it is the country in Europe with the worst ratio between wind projects with development permits, 22,100 megawatts (MW), and ‘only’ 2,400 MW under construction.

Countries like France manage to have the same power under construction with a third of the bureaucratic jam. The report also shows that Spain is one of the countries that doubles the average permit granting time for renewable projects. “The acceleration in the implementation rate needs the support of the member states of Europe by reducing red tape”, the analysts explain in their report.

This report is shared among the sector pending the next step by Teresa Ribera’s team, which will have to arrive in July. The Ministry for Energy Transition is now facing the administrative authorization for the construction of the 154 files that have passed the January 25 test.

For Credit Suisse, the fact that countries such as Spain or Poland delay the process of obtaining permits is the main reason for the delay in the deployment of wind and solar capacity in Europe. The obstacles that occur in the process, as Credit Suisse recalls, are the lack of digitization in the process, resource problems within local authorities, delays caused by legal appeals and overlapping responsibilities between different authorities.

“Other challenges faced by developers of renewable assets in Europe include lack of regulatory clarity, supply chain constraints, cost inflation, and staff availability”, they conclude in their report.

Price drop in Spain

The power of the projects evaluated, before January 25, amounts to 35,879 MW, of which 27,943 MW have obtained the favorable DIA; belong to 132 photovoltaic projects (24,752 MW) and another 20 wind projects (2,897 MW).

“Although the acceleration in the processing of permits is good news for a greater implementation of renewable energies in Spain,” say analysts from Rent 4, “approving so much renewable capacity simultaneously can push down the prices of long-term agreements or PPAs and the prices of electricity from the wholesale market in solar hours, which could consequently reduce the valuation of the projects in Ready to Build, which until now it was a very valuable asset due to its scarcity”.

Brussels wake-up call

After last January 25the European Commission gave Spain two months to fully transpose the directive on renewable energy in the electricity, heating and cooling, and transport sectorsafter observing a delay of almost seven months.

If Spain does not comply with this requirement, Brussels may decide to take the matter before the Court of Justice of the European Union. The Commission sent a reasoned opinion to Spain for not having completed the transposition of European standards to promote the use of renewable sources in various sectors.

The directive in question sets a binding target at EU level for 2030 of at least 32% renewable energy. The regulation includes measures to ensure that support for renewable energy is cost-effective and simplifies administrative procedures for projects. Yet another argument to speed up bureaucratic processes in the ‘green’ sector.

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