Copenhagen Infrastructure Partners (CIP), a global green investment company, has emphasized that the lack of access to acreage and slow permitting procedures pose greater challenges to the expansion of renewable energy than rising costs. In a recent interview with Reuters, CIP's senior partner, Christina Grumstrup Soerensen, shed light on the obstacles faced by the industry.
CIP, founded in 2012, manages 10 funds valued at approximately 20 billion euros, focusing on investments in onshore and offshore wind power, as well as other renewable technologies. With a project pipeline exceeding 100 gigawatts (GW) across Europe, the United States, and Asia, CIP plays a crucial role in achieving the European Union's renewable energy targets for 2030, which include a goal of 111 gigawatts of offshore wind capacity.
According to Soerensen, the timely attainment of permits necessary for constructing new renewable power plants often takes several years, making it challenging to plan and secure crucial supply agreements. Therefore, expediting permitting processes is essential for meeting renewable energy goals. Additionally, she emphasized the need for a standardized approach to development to streamline and simplify the entire process.
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In addition to permitting challenges, access to suitable areas for renewable energy installations was identified as another significant hurdle. Soerensen highlighted the magnitude of this obstacle, suggesting it to be of greater concern than potential delays caused by uncertainties such as inflation.
While rising costs remain an important factor, negotiations with suppliers have become more time-consuming. Soerensen clarified that despite the added complexities, the industry is not at a standstill, but rather facing a slightly more cumbersome environment.
To counterbalance increasing costs, CIP has the flexibility to adjust the pricing of power purchase agreements (PPAs) with companies interested in purchasing renewable energy. This enables CIP to adapt to changing market conditions while ensuring the continued viability of their projects.
Soerensen also stressed the significance of collaboration within the industry to successfully deliver the wind turbines, solar panels, and transmission systems necessary to meet the 2030 targets. She anticipated a more strategic development approach, involving close cooperation between suppliers and developers that extends beyond procurement and encompasses co-planning. This collaboration is crucial to ensuring that the required capacity is available in the right locations and at the right time.
Addressing concerns about quality issues with onshore wind turbines reported by Siemens Gamesa, a major producer, Soerensen reassured that none of the affected products were currently in CIP's operational fleet. However, she emphasized that CIP would proactively engage with Siemens to assess any potential implications for their development portfolio.
As the situation is still in its early stages, Soerensen refrained from speculating on the extent of the impact. CIP remains committed to closely monitoring the issue and maintaining an open dialogue with Siemens Gamesa.
The challenges of permitting delays and limited access to suitable land present significant hurdles for the expansion of renewable energy. While rising costs add complexity, Copenhagen Infrastructure Partners believes that strategic collaboration, faster permitting processes, and standardized development approaches are vital for meeting the renewable energy targets set for 2030.
