How innovation and digitalization can accelerate the permitting process for clean energy projects

To reach net zero by 2050, the world must build clean power faster. To meet its climate and energy security goals the European Union (EU), for example, needs to build an average of 31 GW of clean power capacity every year until 2030 compared to 16 GW per year today. Other regions of the world have a similar challenge.

The speed of the clean energy buildout is slow for a variety of reasons. There is a long list of bottlenecks, including regulatory and administrative inefficiencies, as well as insufficient grid capacity. In addition, location matters. Project sites often 'compete' with food, habitat and biodiversity, as well as face growing opposition from local stakeholders and conservation groups.

The slow and inefficient permitting process is one of the most pressing challenges to solve and lately is getting considerable attention from project developers and policymakers. It affects all clean energy projects, including solar, wind and grid deployment. To illustrate the challenge, according to GlobalData, the US, China and India respectively had 79%, 74% and 64% of the total planned wind capacity under permitting. Across the EU Member States, 81% of the wind capacity is in the permitting phase - with wind projects taking five to ten years or more before construction can begin.

Policy and regulation are important to shorten permitting timelines. On June 3, 2023, the US enacted legislation addressing the debt ceiling, the Fiscal Responsibility Act of 2023 (FRA), which contains several permitting reforms. The EU has enacted similar measures with REPowerEU and the recently reinforced Renewables Energy Directive. The reforms more broadly address shortening permitting timelines.

While policy reform is important to speed up permitting timelines – it is not enough, and digital tools will be crucial. Malgosia Bartosik, Deputy CEO of WindEurope, shared the EU experience pointing out: “The new EU Renewables Directives mandates EU countries to digitalize permitting processes within two years: this is a game-changer. Now we need to equip municipalities, city planners and permitting authorities with the digital tools to deliver on this. The right tools will make the permitting processes more efficient, save time and money for all stakeholders involved and improve social acceptance, ensuring no one is left behind in Europe’s energy transition. We need rules and tools. Regulation alone will not make it.”

The One-Stop-Shop is one such tool. In this model, the Danish Energy Agency (DEA) serves as a single national point of contact to create a streamlined, transparent and centralized permitting process for offshore wind development. It coordinates with several public authorities - including environmental, maritime, defence and cultural heritage ministries - and acquires different licenses on behalf of the project developer. With a clearly defined role and a mandate embedded in legislation, the DEA acts as the executing authority for a streamlined and transparent permitting process reducing uncertainties and delays in delivering the national target of 13GW of offshore wind by 2030.

Digitalization is further needed to bring the implementation models to life and for policy and legislative interventions to have the desired impact.

WindEurope, Amazon Web Services (AWS), the World Economic Forum and Accenture are collaborating on a digital permitting solution to automate workflows, increase accuracy and enhance process transparency for permitting agents working in different public authorities in the EU, to process permits for both new clean power and grids more efficiently.

The solution is based on hundreds of hours of research and workshops with permitting agents from different EU Member States. While the process may differ across countries, the three key challenges remain universal. These are:

1. Information management

2. Collaboration

3. Process transparency

Just solving the information management challenge through submission templates, keyword search, automated document checks and notifications all within one central repository, is estimated to cut the manual time spent in reviewing the permit application from the current 12-15 months to two months.

The web-based, intuitive solution is a digital manifestation of the One Stop Shop. It is currently being developed for a pilot implementation in Denmark to test the estimated time-saving potential. When proven successful, there is an ambition to enable the other Member States to deliver on the EU mandate of implementing the One Stop Shop model and reduce permitting time to two years.

Another area that would benefit from digitalization and indirectly accelerate the permitting process is stakeholder engagement. Land conflicts and opposition from local communities are a new and emerging source of delay for clean power and grid infrastructure as they slowdown securing the necessary land permits and approvals for Environmental Impact Assessments.

Clear and frequent information sharing and a structured long-term communication plan can improve community engagement by addressing legitimate concerns and reducing misinformation. Consultations, where local stakeholders can provide feedback to the developers and engage in the decision-making process, can also minimize the risk of legal challenges that tend to further slow down the permitting process.

Digital solutions across the stakeholder engagement lifecycle can enhance and widen community engagement. Conducting a social listening exercise, for instance, can be helpful to inform community engagement, providing a powerful way to gather insights into community concerns and priorities. Digital twin technology can be used to optimally design and plan projects to maximize system value outcomes. Building interactive digital displays and/or using digital tools, such as augmented reality and/or virtual reality can be compelling ways to bring a project vision to life for communities.

Permitting is only one part of the solution - several levers need to be activated to reduce the time to operation for clean power projects. At the 2023 Annual Meeting in Davos, The World Economic Forum´s Clean Power and Electrification Program launched the Clean Power and Delivery Accelerator to identify the key levers and best practices for accelerating the build-out of clean power plants and infrastructure by convening a series of expert working groups, high-level roundtables and senior executive meetings. The key message across the board is clear, delivering the 2050 net-zero energy system while balancing the energy triangle, climate, energy security, and affordability requires all types of innovation – including reinventing the processes, business models and ways of collaboration between governments, businesses and communities.

The article is based on insights from the Clean Power and Electrification Programme's Expert Working Group on accelerating permitting for clean power scale-up convened between Oct-Nov 2022 and the Expert Working Group on Engaging communities for clean power scale-up, as well as consultations with industry experts and Forum partners.