(Bloomberg) -- Talk to renewable-energy executives for long enough and almost everyone will complain about the time it takes to get government permits to build their power plants. Unless you’re operating in Germany these days.
“We’re quite pleased,” said Karsten Brüggemann, vice president of Nordex, which manufactures wind turbines. Particularly since 2022, he said, Nordex has seen a rapid rise in the number of turbines deployed and future wind farms permitted.
Germany has been among the countries hardest hit by Russia’s invasion of Ukraine, which forced it to quickly wean itself off Russian gas. The urgency translated into building more import facilities for liquefied natural gas, to speeding up renewable installations.
Solar and wind projects across Europe had at the time been stymied by bureaucracy. The time it took to get permits had doubled since 2017. In Germany, securing approvals for one 2022 project to erect three wind turbines required 36,000 pages of documentation printed out and handed to the authorities.
Since then, German red tape has been drastically reduced, according to interviews with renewable-energy executives. In just over two years, the country is now deploying more renewables than any other European peer. “We are experiencing a significant increase in renewable electricity generation,” said Fiete Wulff, a spokesperson for Germany’s Federal Network Agency, which is responsible for regulating electricity and other markets.
How did that happen? The government attacked the problem in a systematic way and anchored the solutions in legislation.
One law designated clean-energy projects an “overriding public interest” that serves national security. Another required German states to allocate about 2% of their land for wind turbines. Further amendments cut the number of environmental assessments required to just one and simplified the previous double-tracked grid-planning process by removing an entire agency’s involvement.
“We save two to three years for new [transmission] corridors,” said Werner Götz, chief executive officer of transmission grid operator TransnetBW. “It’s definitely a significant improvement.”
Germany aims to get 80% of its electricity from renewables by 2030. That means it needs to deploy a lot more solar and wind power, while connecting them through longer transmission lines. The reforms so far have helped solar deployment in particular.
The 2023 figures don’t reflect the full impact these regulatory changes have had. Many projects that received permits have yet to be built. Germany’s parliament also recently made it easier for people to deploy solar on their balconies and harder for landlords to object to the installations. Berlin, which has offered subsidies for these plug-and-go panels, had already received almost 10,000 applications in April.
What Germany has done “can certainly be a model for other European countries,” said Bärbel Heidebroek, president of the German Wind Energy Association. Some especially conducive moves include designating renewable energy projects as being in the national interest, sharing power-generation profits with locals who host solar panels or wind turbines, and providing long-term certainty to energy businesses that the government is serious about its climate goals.
“Germany combines two things: a longstanding strategic approach and the recently developed strong economic opportunity of renewable deployment,” said Simon Müller of the think tank Agora Energiewende.
There are still problems to be solved. Now that projects have received land permits, the challenge for wind companies is getting permission to transport the enormous turbine blades. That can still take months to secure in Germany, said Brüggemann of Nordex, whereas some other European countries can make them available within days or weeks.
Another is supply chains. The major issues arising after the pandemic have been resolved, but there are lingering backlogs for some key equipment. Transformers, for example, are necessary to use electricity from high-voltage transmission lines in homes and offices. But the delivery times for them are long, Heidebroek said.
Europe still manufactures only a small fraction of what it deploys in clean energy. While the Inflation Reduction Act in the US created a compelling business case for relocating manufacturing to the country, Europe’s production-offshoring trend will continue, according to Oliver Beckel, director of corporate strategy at the solar cell manufacturer Qcells. “There is political will for ‘Made in Europe,’ but so far no concrete measures to facilitate it,” he said.
And energy prices in Germany are still higher than they were before the pandemic. “What needs to be a laser focus of attention going into the next legislative term is affordable electrification,” said Müller. “That is probably the most important component in order to solidify this progress.”
--With assistance from Petra Sorge and Eva Brendel.
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