Regulatory Hurdles Threaten Global Green Energy Ambitions

Many green energy projects worldwide are being delayed or abandoned due to complications in expanding and connecting to the power grid.
Issues with the power grid, such as curtailment, hinder the functioning of existing renewable energy projects, with places like Jeju Island facing significant disruptions.
Simplifying and centralizing the regulatory and permitting processes for grid projects, both in the US and EU, could alleviate these challenges.

An effective green energy transition doesn’t just depend on the deployment of solar panels, wind turbines, and electric vehicle fleets – it also hinges upon a rapid buildout of all of the infrastructure that those components rely on, from long-term energy storage solutions to power lines. And grid regulators are really dropping the ball.

The electrification of the global economy is going to require a massive and unprecedented buildout of the power grid…yesterday. Already, green energy projects are being abandoned because of issues with grid connectivity and permitting, or languishing fully formed for years while they wait their turn to plug in. The issue is complex and multiple; it’s not just a matter of building more transmission and distribution networks, switching stations, and transformers, it’s an issue of permitting and byzantine permitting and regulatory processes that can bog down new projects for years.

The scale of the challenge – as well as its urgency – are both unprecedented and enormous. The International Energy Agency calculates that meeting global pledges to achieve net zero emissions by 2050 will require annual investments in energy sector infrastructure and technologies to nearly quadruple over the next 7 years – from today’s level of more than $1 trillion to $4 trillion by 2030.

The issue is particularly pressing in places with rigorous regulatory mechanisms that require lengthy bureaucratic processes at odds with the urgency of the decarbonization imperative. In both the United States and Europe, getting all of the permissions necessary to build new grid projects can take a full decade. In a September Financial Times op-ed, EU energy commissioner Kadri Simson decried the fact that securing permits for grid reinforcements can take up to ten years in Europe. Meanwhile, in one particularly egregious example from the United States, the TransWest Express project took a full 18 years to get approved, and is still expected to take another five years to be completed.

The issue doesn’t only apply to new development projects – insufficient grid infrastructure is also negatively impacting the functioning of already online renewable energy production. Curtailment is becoming an increasingly widespread and pressing issue, as solar and wind farms are forced to stop production when the grid can’t handle the influx of electricity – an extremely wasteful practice which undermines the efficacy of renewable energy expansion.

In South Korea’s Jeju Island – a poster child of green energy expansion – incidences of curtailment have skyrocketed from just three cases in 2015 to a whopping 103 cases in 2022 – a record high. The situation in Jeju is the canary in the coal mine for other nations which have failed to adequately prepare their energy grids and other essential infrastructural components. “The expansion in renewables is necessary to meet Jeju’s goals but has brought acute disruptions to its existing energy system,” Inside Climate News reported in August. Already, Australia, Japan, and China, and parts of the European Union and the United States are facing similar hurdles. California broke its own record for solar and wind curtailments earlier this year, and, according to the United States Energy Information Administration, Texas is next.

A recent opinion piece in the New York Times proposed a solution to this nightmarish gridlock of red tape: remove all of the overlapping and redundant federal- and state-level systems and institutions currently tasked with reviewing and approving grid projects and hand the responsibility over to a single national entity. The same logic applies to the European Union, which clearly desperately needs to retrofit its own regulations, which were designed far before the decarbonization movement was in motion. The private sector has also gotten involved. Google has thrown money and brainpower behind a reimagining of key permitting processes which are currently serving as major bottlenecks for the tech sector’s own decarbonization efforts.

By Haley Zaremba for Oilprice.com