EU: Acceleration of deployment of renewable energy

During COP27 climate conference in Sharm el-Sheikh, the European Commission’s President Ursula von der Leyen said that the European Union aims to roll out a record 100 GW of renewable capacity next year. She stressed that accelerating the deployment of renewable energy is not only good for the climate, but also good for the EU’s energy independence and security of supply (see here).

On 9 November 2022, the European Commission published a proposal for a Council Regulation laying down a framework to accelerate the deployment of renewable energy in the EU. On 24 November, the EU’s energy ministers agreed on the final text (the “Regulation”). According to the press release, the Regulation is to be formally adopted at the next extraordinary energy Council meeting (expected on 13 December 2022). The Regulation follows on from the Commission’s EUR 300 billion REPowerEU strategy published in May (see our previous blog post). It is meant to be a temporary measure aimed at quickly implementing certain elements of REPowerEU for certain types of projects and technologies that have the highest potential for quick deployment, with the lowest environmental impact. This way, the Commission hopes to bridge the gap until a political agreement can be reached between the European Parliament and the Council (under the ordinary legislative procedure) on a revision of the Renewable Energy Directive (“RED III”), which is where these rules will ultimately end up.

The Regulation proposes a number of measures to address lengthy and complex administrative procedures, which are identified as key obstacles hampering the clean energy transition in the EU. Key measures include the following:

1. Planning, construction and operation of renewable energy plants and installations (including related grid and storage assets) will be presumed to be of overriding public interest and serving public health and safety, and therefore be given priority when balancing legal interests in individual cases. This would allow them to benefit from a simplified permitting process and specific derogations provided for in EU environmental legislation. Member States may, however, restrict the application of this provision to certain parts of their territory and certain types of technologies or projects in accordance with their NECP priorities.
2. The Regulation clarifies the relationship with certain rules foreseen in the EU Birds Directive and Habitats Directive. Planning, construction and operation of projects (including related grid infrastructure development) shall be given priority when balancing legal interests in the individual case, if and to the extent appropriate species conservation measures are undertaken and sufficient financial resources are made available for that purpose. This addition is meant to draw environmentalist over the line, which have been critical of the potential impact of fast-track permitting (and in particular loosening requirements for environmental impact assessments) on biodiversity.
3. Permitting processes for solar energy equipment and its co-located storage assets in existing or future artificial structures should not exceed three months, provided that these structures are not primarily created for solar energy production purposes (in other words: excluding solar farms). Furthermore, these installations (including their repowering within the same space) will be exempted from the requirement or determination to carry out an environmental impact assessment. Member States may exclude certain areas or structures from the application of these rules for reasons of heritage protection, or over national security or safety concerns.
4. In a particularly blunt move, solar energy installations with a capacity of 50 kW or less, will be deemed granted in case of a lack of reply by the relevant authorities within one month following the application, provided that the capacity of the solar energy equipment does not exceed the existing capacity of the grid connection. Member States may apply a lower threshold provided that it remains above 10.8 kW.
5. A cut-off of six months is provided to run through the permitting process for the repowering of renewable energy projects (including upgrading the grid connection assets). Their environmental impact assessments should be limited to the potential significant impacts resulting from the change or extension compared to the original project. Where the repowering does not result in an increase of total capacity compared to the original project beyond 15%, grid connections will need to be permitted within three months from the application, unless there are justified safety concerns or technical incompatibility.
6. A one-month cut-off of the permitting process is provided for heat pumps below 50 MW (three-months for ground pumps). Smaller pumps (up to 12 kW and, subject to certain conditions, those installed by a renewables self-consumer up to 50 kW) would also benefit from a simplified procedure for the grid connection, subject to safety. Again, Member States may exclude certain areas or structures from the application of these rules for reasons of heritage protection, national security or safety reasons.

To ensure transparency, permitting decisions taken in application of the above rules must be published in accordance with existing obligations. The Regulation further provides that certain processes relating to the development of grid (connection) infrastructure are not counted when calculating the above cut-off periods. Member States are also at liberty to impose (even) shorter deadlines.

The Regulation will enter into force on the day following its publication in the Official Journal of the EU and will apply to all permitting procedures commencing during its 18-month application period, which can be extended following a review by and on a proposal of the Commission. On the impulse of the renewables industry, the Regulation (as opposed to the Commission’s initial proposal) also allows Member States to apply it to ongoing permitting processes, provided it results in a shorter process and pre-existing rights are preserved. It is not clear from the Regulation what would happen to permitting processes that have started but are not completed within the (initial) 18-month duration of the Regulation. It is fair to assume that the Commission will propose an extension of the (emergency) Regulation for as long as necessary, until the RED III is agreed, containing similar rules to ensure continuity.

The Regulation does not offer any detail on how the permitting processes should be conducted in practice. Certain rules, in particular the ones declaring a permit to be “deemed granted” upon expiry of certain deadlines, may prove difficult to implement in practice, especially by permitting authorities that already suffer from a high workload. Moreover, it may prove difficult to reconcile with certain principles of public law and good governance. Legal challenges to permits granted in that way should not be ruled out. The outcome of the Commission’s review on these points will be something to look forward to.

NOTE ADDED ON 6 JANUARY 2023: the Regulation was published in the Official Journal of the EU on 29 December 2022. The Regulation entered into force on 30 December 2022 and will apply for a period of 18 months from its entry into force.