MUNICH (dpa-AFX) - Despite all the political declarations of intent regarding the energy transition, the construction of new wind and solar power plants remains a laborious process that takes years, according to one of the leading companies in the industry - but not only in Germany. "Unfortunately, the expected speed of the expansion of renewable energies does not yet match reality," said Michael Kohn, Head of Global Project Finance at Baywa r.e..

"Solar plants often take up to five years from planning to construction. Wind farms are more complex in terms of approval. It can take even longer." However, the manager emphasized that this also applies to other countries: "Not only in Germany, but in many markets." The Munich-based company plans and builds wind and solar parks internationally with 5400 employees worldwide.

The German government aims to cover 80 percent of German electricity consumption from renewable energies by 2030. There is a consensus in the industry that expansion needs to progress faster to achieve this target - and that bureaucracy is one of the obstacles.

The German Association of Energy and Water Industries, the Association of Municipal Enterprises and management consultants Deloitte estimated in the fall that annual investment in the energy transition would have to increase almost fivefold by 2030 compared to 2022: from 22 billion to 100 billion euros.

Apart from the capital requirements, this would also mean more work for the authorities. However, according to Baywa r.e., they are already at the limits of their capacity at the current pace: "This cannot be accelerated immediately and aligned with the expansion requirements, partly due to a lack of staff in the offices that process the permits," said Kohn.

In Germany, objections and lawsuits also make the procedures more difficult and unpredictable in terms of time and content. Appeals and lawsuits are very important, but "in our opinion, they should be limited to the important areas worthy of protection," said Kohn. "We see complaints from residents who have legitimate concerns, for example about the noise and shadows cast by a wind turbine." These concerns are best addressed beforehand in dialog or as part of the approval process. "However, it is often the case that people sue for the sake of it, even if there is no prospect of success. A lawsuit usually means a delay of up to several years."

The next major obstacle in many markets is the grid connection. "There is often a bottleneck in the availability of grid connection capacities. In some cases, connection points are allocated that are far too far away from the actual project."

Easier financing

According to Kohn, however, financing new green energy plants in Germany is generally less complex than abroad: "Instead of requiring extensive external advice - including legal, tax, technical and insurance advice - as is quite common in the international environment, the project assessment in Germany is generally carried out within the bank without the help of external consultants," said the financing expert. "This means that very time-critical and often complex work packages are shortened."

Baywa r.e. emerged from the green electricity business of the Baywa Group, which was originally active in agricultural trade, and generated sales of almost 6.5 billion euros in 2022. The parent company will publish the figures for 2023 at the end of the week. "At the moment, we as an industry are dealing with very tense market parameters, still high inflation rates, high interest rates, high investment costs and one or two uncertainties in the supply chains," said Kohn. However, banks and other investors are still keen to invest. "Overall, the industry in Germany is continuing to grow and we are very confident about the future thanks to our well-filled project pipeline."/cho/DP/zb