Wind and solar at odds as EU strikes deal over green industries protection measures

The European Parliament and Council have reached a preliminary agreement on regulation governing its industrial policy for green technologies that includes rules on faster permitting and non-price criteria for tenders – but the wind and solar sectors had divergent views on details of the deal.

The framework of measures in the Net Zero Industry Act (NZIA) now still needs to be endorsed and formally adopted by both institutions.

The regulation aims at boosting the industrial deployment of net-zero technologies needed to achieve Europe’s climate goals, and at maintaining the EU’s leadership in industrial green technologies.

“With the Net-Zero Industry Act we want to support our industry in its transition. The NZIA is an important step in creating the necessary ecosystem to boost the manufacturing of clean technologies,” said Jo Brouns, the Flemish minister for economy, innovation, work, social economy and agriculture.

“Now the time is ripe for Europe to take back the lead on the global scene for clean technologies and to build a competitive, green, and job-creating industrial sector.”

Fast-track permitting and auctions

Among the main elements of the deal is an 18-month limit for permits to be granted for large net-zero technology manufacturing projects of more than 1GW. Permits for smaller projects will have to be granted within a year.

“Shorter deadlines will be set for strategic projects,” the EU Council said.

The agreement also enshrined pre-qualification criteria in tenders on cybersecurity, responsible business conduct and the ability to deliver on projects.

National Governments can subsequently award bids based on sustainability, energy system integration or supply chain resilience – the latter being a code word for local content, although it wasn’t clear yet how exactly this would be measured.

“Europe is taking another decisive step away from auctions based on price only,” WindEurope chief policy officer Pierre Tardieu said.

“The Net Zero Industry Act enshrines pre-qualification criteria to ensure auctions don’t award the cheapest projects but those projects that bring the biggest value to Europe.”

“Uncapped negative bidding puts the realisation of wind projects at risk. It is very positive this issue is officially recognised in legislation supporting the expansion of European clean tech,” Tardieu said.

While the wind industry in general favoured pre-qualification criteria – which had already been demanded by the EU Wind Power Package last year – the sector wasn’t happy about all aspects of the agreement.

Dennis Rendschmidt, managing director at VDMA Power Systems, a group representing German wind manufacturers, stressed that the use of pre-qualification criteria should be binding.

“A pro-rata phase-in or voluntary application risks fragmenting the common market,” he warned.

“The result would be an additional burden on the European manufacturing industry due to different requirements in the member states.

“For this reason, the approach of a proportionate introduction of mandatory prequalification criteria is wrong and would deprive the NZIA of its intended effect.”

Wind and solar supply chains differ

“We understand these criteria will apply to a minimum of 30% of auctions initially. This is a positive, measured, approach, which will help EU solar manufacturers finance project pipelines, knowing that there is reliable demand for their product,” SolarPower Europe policy director Dries Acke said.

“This also means the rest of the auction market should remain unaffected, maintaining the necessary pace of solar deployment.

“To guarantee this win-win, we encourage member states to act swiftly while respecting the 30% threshold.”

SolarPower Europe also said that it was good news that NZIA will be revised in coming years to map out the trajectory towards 2030 and beyond.

“This is a sensible ‘walk before we run’ approach,” the group said, adding that the rules should be technology-specific in order to recognise the different starting points of the wind and solar supply chains.