Europe's PV sector wants faster permitting for post-lockdown boost

Brussels — Faster permitting for new solar photovoltaic capacity would help boost EU economies after the coronavirus pandemic-related lockdowns, according to PV industry executives.

The main lockdown impacts in 2020 include demand slowdowns, short-term delays to projects as supply chains are disrupted, and more difficult access to financing, Michael Schmela, head of market intelligence at trade body SolarPower Europe, said during a webinar on Thursday.

Having the European Commission and EU governments simplify permitting would be the key driver for a strong post-lockdown recovery, Schmela and the other industry speakers said.

This would enable investments already planned to move ahead quickly, Alessio Cipullo from Italian power lobby group Elettricita Futura said.

Italy's government aims to have 51.1 GW of installed solar photovoltaic capacity by 2030, according to its national energy and climate plan.

This is nearly two-and-a-half times the estimated 20.9 GW of PV Italy had installed by the end of 2019, he said.

Italy's solar capacity would also likely have to keep growing after 2030 as part of the EU's efforts to be climate neutral by 2050.

"So we will have to see permitting simplified to get more projects in the pipeline," Cipullo said.

SolarPower Europe's president Aristotelis Chantavas agreed, saying that permitting was key to swiftly increasing solar capacity and calling on the EC to talk to each government about this.

"Permitting is a huge barrier for projects," he said. "We want the EC to guide local and national governments on this."

The EC is reviewing all EU legislation as part of its European Green Deal strategy to make the EU climate neutral by 2050.

It proposed making the 2050 goal binding in its draft European Climate Law published on March 4. The proposal needs approval from both the European Parliament and the EU Council, which represents the EU's 27 national governments, to take effect.

Lockdown slows Spanish PV

Spanish PV lobby group UNEF had forecast around 2-4 GW of new installed capacity for 2020, depending on financing and planning processes, its general director Jose Donoso told the webinar.

But it was scaling this back to about 2 GW in light of the lockdown impact.

"The big uncertainty is how long it takes to exit the lockdown," he said.

Other longer-term challenges include low power prices, project financing, and an outdated market design based on marginal costs.

"Solar doesn't work like that. If we want to go subsidy free, we need to reform the markets to give a credible price signal," Donoso said.

He worried that low power prices could prompt banks to change their financial terms.

Donoso called on the Spanish government to speed up planning processes and to organize more renewable auctions as soon as possible.

"Auctions for a fixed price will eliminate concerns about low prices and enable access to favorable financial terms," he said.

Spain's government aims to have 39 GW of installed solar PV by 2030, up from an estimated 9 GW in 2020, according to its national energy and climate plan.

Italian demand drop

Italian total power demand fell 22% or 8.2 TWh from March 23 to April 3 compared to the equivalent week in 2019, after stricter lockdown restrictions closed several commercial and industrial activities, Cipullo said.

Total March demand was down 10.1% or 23.7 TWh on the year before, while day-ahead prices crashed to an historic low of Eur32/MWh not seen since April 2016. This was down 18.5% on February and 39.5% on March 2019, he said.

There was no evidence of PV output being curtailed so far, however, Cipullo said.

Electtricita Futura estimates that PV output from March 23 to April 7 rose 6.2% to 1,266 GWh, compared with the equivalent period -- March 25 to April 9 -- in 2019.

Optimistic outlook

All the industry speakers thought a strong recovery for PV was possible in 2021, given the EU's commitment to being climate neutral by 2050.

Chantavas, who is also head of Europe for Enel Green Power, said his company planned to increase its investment in grids and renewables, particularly in Italy and Spain, to help boost the economy after the lockdowns.

Susannah Wood, marketing director at Solarcentury, said her company had 5 GW of projects in the pipeline, mainly in Europe, including 610 MW being built on three sites.

Two sites in Spain were currently shut, but building work was continuing on a project in the Netherlands.

The lockdown-related power demand and price falls were an "artificial shock," but the risk of a real shock would rise the longer the lockdowns continued, she said.

She remained optimistic, however, given that renewables had survived the 2008 financial crisis while gas-fired power plant was mothballed.

Renewables were also much cheaper now, and the industry was agile, "so there are reasons to be hopeful we will come out in a strong position," Wood said.