Ready, Set, Go: Europe’s race for wind and solar

While the European Union keeps advancing renewables targets, on-the-ground deployment needs to accelerate to meet them.

With the gas crisis and Russia’s war in Ukraine, energy security has shot to the top of the EU’s agenda. Seeing the urgency of reducing dependence on imported fossil fuels, the European Commission and EU member states have increased ambition on renewable energy. The REPowerEU proposal aims for the EU to reach 1236 GW of renewable capacity by 2030, compared to a target of 1067 GW under previous plans, and up from 513 GW of installed capacity in 2021. Analysis from Ember and CREA reveals that many national governments have also committed to expanding renewables as a way to address spiking fossil gas prices and energy security concerns.

Europe is in search of a cheaper and more stable power system. Modelling from Ember shows how this can be achieved through possible pathways to a 1.5C aligned clean electricity system in Europe. The modelling provides insights into the required 2030 capacity for wind and solar. Comparing these capacities with the pace of actual deployment shows that EU countries need to accelerate the rate of wind and solar capacity additions to reach the volumes required in 2030.

The EU is charging forward on renewables ambition. While increased targets are an important step towards adding renewables to Europe’s electricity system, this needs to be coupled with actual delivery through national legislation, the removal of administrative barriers, effective support schemes and increased investment.

Europe increased its renewable energy ambitions. Now the focus must move towards deployment at speed or risk missing key benchmarks.

EU behind on wind and solar deployment pace

Europe is hungry for more renewables. The EU aim of a green post-Covid recovery and pressure from the continuing gas crisis and Russia’s invasion of Ukraine are pushing countries towards cleaner, cheaper and more secure sources of power. This shift is already underway: installed capacity of wind and solar in Europe has been increasing for the last decade. However, rates of deployment will have to significantly step up to keep pace with more ambitious 2030 targets.

Recent increases in solar deployment are a positive sign. However, future deployment predictions are below pathways compatible with 1.5C. In the case of wind power, both current and future deployment rates are not aligned with 1.5C compatible benchmarks or REPowerEU targets. This is especially worrying because wind’s higher capacity factor (compared to solar) means that delays in wind deployment will have a larger impact on the electricity generation mix.

The 2030 benchmark

Ember’s recent modelling work outlines different 1.5C-aligned pathways to reach a clean European electricity system by 2035. Capacity figures from the ‘technology driven’ (TD) pathway are used in this analysis to indicate 1.5C compatible benchmarks for country and EU-level targets. At an EU level, the overall targets from the TD pathway for 2030 are 476 GW wind (onshore & offshore) and 600 GW solar. This pathway was chosen as the most aligned with the recently announced REPowerEU 2030 targets of 510 GW wind and 592 GW solar and throughout this report is referred to as ‘required capacity’.

Since REPowerEU does not provide country-level targets, results from Ember’s study are used to break down the required capacity according to each country. The resulting country-level numbers should be viewed as indicative of what is required for the EU27 as a whole to reach sufficient installed capacity of wind and solar.

There are different ways wind and solar could grow to meet capacity requirements aligned with 1.5C (full detail in the methodology). Based on discussion with developers and analysis of current growth rates, our research shows that annual additions face the need for a steep continual increase in coming years, rising to four times the 2021 levels by 2030. WindEurope and IEA forecasts provide expected additions for wind and solar respectively from 2022 – 2026. These figures show wind and solar capacity additions are close to the required values in 2022 and 2023, but from 2024 onwards begin falling behind, reaching only half (38 GW) of the required trajectory (76 GW) by 2026.

Six countries with the potential to play a key role in wind installations look set to install only half of the capacity needed in 2026. Predictions for France, Spain and the Netherlands show flatline or decreasing installation rates to 2026. The later these countries pick up their deployment pace, the faster they will have to accelerate in the lead up to 2030. This deployment ‘deficit’ exposes countries to financial losses: least-cost pathways clearly indicate the need for rapid wind deployment, which would also reduce reliance on fossil fuel imports and lower electricity prices in a time of economic struggle.

There have, however, been positive recent announcements signalling that European governments are taking deployment challenges seriously. The German Easter Package lays out an ambitious deployment schedule which plans to add 10 GW/year onshore wind capacity from 2025 onwards and 19 GW of offshore wind between 2026 and 2030. This would put German deployment rates far above current predictions and on track to reach a total of 145 GW wind capacity by 2030 and aligned with 1.5C benchmarks. In Poland, the government reached preliminary agreement to update a problematic wind law which has blocked investment in onshore wind since 2016, and the first offshore wind farm is expected to start operating in 2026.

Future solar deployment rates not 1.5C aligned

At the EU level, solar deployment rates from the previous three years seem promising. However, predictions for the next four years paint a different picture. Analysis of six key countries reveals the pace varies widely, with many falling short.

Permitting deadlines for wind and solar exceeded by up to 5 times

A long permitting process is a key reason why the EU and several countries are deploying wind and solar too slowly — it is usually the most time-consuming phase of a renewable energy project. Permitting includes all the administrative processes required to move from an idea phase to the construction of a wind or solar power plant: i.e. securing construction permits, performing environmental impact assessments, and navigating local spatial planning processes. Ember’s analysis also includes the grid connection process in permitting times.

To keep up with REPowerEU and 1.5C-aligned ambition, attention must now turn to removing barriers to installation.

At an EU level, expected wind and solar deployment rates are below those required for 1.5C, reaching only 50% of necessary additions in 2026. Of the EU member states, only a handful are reaching required wind deployment rates, and key countries for solar deployment are also lagging behind. A crucial barrier to wind and solar deployment is the permitting process time, which in most countries exceeds the EU legislative limit of two years.

To begin tackling barriers to deployment, the existing two year permitting limit, stated in the Renewable Energy Directive (RED), needs to be enforced by the European Commission. To align with REPowerEU and 1.5C, it is equally important that the amendment to the RED is passed this autumn, raising the EU’s 2030 renewable energy target to 45%.

Further, the 1.5C-aligned capacity expansion pathways should also be transposed into the updated National Energy and Climate Plans (NECPs) during the formal review process in 2023. At a national level, auction volumes should be significantly increased to capacities in-line with 2030 targets. Renewable energy ‘go-to’ areas, taking into account environmental and social concerns, should be designated as suggested in REPowerEU where permit-granting should not exceed one year. Finally, permitting processes should be streamlined through investments in personnel and digitalisation to ensure they are compliant with the two year limit.

Slow wind and solar deployment will only exacerbate the current cost and security crisis the EU’s energy sector is facing. Rapid expansion of these technologies will help the EU to replace expensive and uncertain fossil fuel imports with clean and secure sources of energy, whilst also reducing electricity prices.

In this report, upcoming and complete country wind and solar auction results, and discussions with developers, were used to verify the wind and solar capacity predictions. Predictions for solar deployment numbers were taken from IEA’s Renewables 2021 data explorer. Predictions for wind deployment were taken from WindEurope’s 2021 Statistics and the outlook for 2022-2026 report.

Onshore wind and solar auction results from six key countries were collated to cross-check the predictions used in the main report and get a more robust idea of deployment numbers on the ground and in the coming two to three years. Solar auction results were supplemented with forecasts from the IEA for small-scale and commercial solar installations that are not covered by the auction schedules to estimate total yearly solar additions.

Upcoming auctions which are scheduled or have not yet released results were assumed to have awarded the total capacity available. It was also assumed all successfully auctioned capacity will be built, secure grid connections and obtain finance, making it a best-case scenario estimate. Generally, differences between predictions and auction results were less than 15%.

*table*

* Deployment deadline is the time after the auction by which the renewable project must be commissioned – it is assumed that this will be the date the auctioned capacity comes online. Where unavailable, this is estimated as two years for solar, three years for onshore wind and five years for offshore wind.

** Deployment deadline of 84 months

*** The Netherlands does not use renewable auctions for onshore wind and solar. Instead it has a subsidy scheme with a set budget rather than capacity.

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Methodology

Estimating wind & solar growth scenarios

Throughout this report at the EU level, a fixed percentage growth in total installed capacity using 2021 as the baseline has been used to estimate the pathway to 1.5C 2030 capacity. This growth scenario is intended to act as a realistic benchmark for deployment rates from 2022 – 2030 and was decided upon after discussion with developers, analysis of current growth rates, and a comparison of other options. These options included fixed GW annual additions and increasing annual GW additions followed by constant capacity increase (similar to the schedule outlined in the German Easter Package). At EU-level, total installed solar capacity currently shows a fixed percentage growth pattern – with more and more gigawatts being added every year. For wind, capacity is currently increasing by roughly 10 GW/year. However, to reach 2030 targets at constant GW additions, this would have to jump to more than 30 GW/year from 2022. A fixed percentage growth in total installed capacity scenario requires adding around 20 GW/year from 2022 (a more realistic number based on WindEurope’s projected net additions of 15 GW in 2022) , rising to 45 GW/year by 2030.

At the country level, a fixed percentage growth rate in total installed capacity is also used. In this case, forecast data is used to calculate the average yearly percentage increase from data between 2021 and 2026. This is then extended to estimate 2030 capacity which is used to determine whether countries are on track for required capacities.

Solar forecast data

Solar forecast data was taken from the IEA Renewables 2021 report, released in December 2021. This data set was chosen after comparison with solar auction results from key countries (Germany, Italy, Spain, Netherlands, Poland) to cross-check the figures, and due to the public availability of country-level data alongside EU numbers. The Renewables 2021 report included an accelerated scenario which assumes certain market and policy advancements can occur in the next 1 – 2 years. For this report, the IEA’s main case has been used to display what would happen in a ‘business as usual’ scenario. Industry believes higher solar growth is possible. In their report ‘EU Market Outlook for Solar Power 2021-2025’ from December 2021, SolarPower Europe outlined a medium case scenario which sees the EU-27 adding 41 GW (ac) solar capacity in 2025. This is significantly higher than the IEA forecast of 21 GW (ac) in 2025, however, combined with forecast wind deployment, it would still leave the EU 20% behind 1.5C compatible additions. There are also supply chain and skills shortage issues in the solar industry which must be addressed to accelerate solar at pace.

Wind forecast data

Wind forecast data is taken from WindEurope’s report, ‘2021 Statistics and the outlook for 2022-2026‘ which was released in February 2022. Net additions were used from the realistic expectations scenario.

Acknowledgements

Report Authors

Harriet Fox, Paweł Czyżak, Alison Candlin, Sarah Brown

Thank you to the following for their contributions

BNE, Elettricità Futura, Enel, Green Genius, Holland Solar, Statkraft

Photo credit: Joan Sullivan / Climate Visuals Countdown

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