Iberdrola calls for ‘national interest’ approvals for green energy projects
Red tape threatens climate targets around the world, says utility chief executive Galán
Governments globally need to fast-track permitting for “green” infrastructure projects of national importance or risk missing decarbonisation targets, the head of one of the world’s biggest utilities has warned.
Ignacio Galán, the longstanding chair and chief executive of Iberdrola, said clean energy projects such as large offshore wind farms are too often slowed down by planning bureaucracy in regions such as Europe, and can take nearly a decade from conception to start generating power.
Galán, in Glasgow for the COP26 climate summit, said it sometimes took seven years to secure the necessary permissions and contracts for offshore wind projects in countries such as the UK, while construction takes less than two years. In the case of solar farms, the construction phase can be as little as six months following lengthy planning processes.
Citing France’s nuclear power plants, which were built under “national interest” programmes, he said policies that speed up permitting should be applied now to renewable energy assets such as solar and wind farms.
“We are passing through too many processes that are not . . . in the national interest,” Galán told the Financial Times, adding that there should be only one process with which energy companies have to engage rather than jumping through various local, regional and national hoops.
Permitting varies by country — and Galán pointed out that there can also be separate regimes within the same nation. “In Spain we have . . . different processes of permitting for those power plants which are below 50MW and over 50MW. Below 50MW it’s a regional approval . . . and it takes those ones . . . less than six months” to secure approval, he said. “When we are over 50MW, between two and four years.”
Permitting is becoming a big issue in the wind industry in particular. Global wind companies including Vestas, Orsted, SSE and Siemens Gamesa warned G20 leaders in July that efforts to meet climate targets were “condemned to fail” unless they urgently stepped up the installation of turbines. They identified “inadequate” permitting regimes as among the greatest barriers to faster deployment.
Galán said fast-track permitting was among his major requests of leaders during the climate summit, alongside reducing the bureaucracy around investment in electricity grids, which will be needed to support the electrification of sectors such as transport.
Leaders including US President Joe Biden and UK Prime Minister Boris Johnson pledged to accelerate the rollout of clean energy technologies during the first week of the COP.
The commitment came against a backdrop of high gas and power prices in many parts of the world, including Europe, caused by factors including demand roaring back after the coronavirus pandemic and lower gas supplies from Russia to western Europe.
Galán expressed optimism that wholesale gas and power prices, which surged to record highs in Europe and the UK in October, “would be normalised” by spring.
Citing expectations that Russia would increase supplies to Europe over the winter and of higher exports from countries such as Norway, Galán said: “Even today, the forward prices of gas for next year are [nearly] half of those that they were already a few months ago.”
In the UK, the wholesale gas contract for delivery in December 2022 is currently trading around £1.22 a therm, compared with £1.97 for the December 2021 contract.