INTERVIEW - Regulatory changes are needed whilst war reshapes the energy landscape

The war in Ukraine has brought a positive change to the general perception of renewables and its role in a country’s independence in power generation, with solar power having a pivotal role in this setting. However, the sector is rattled by lagging legislation, regulatory uncertainties, and interconnection and labor shortage issues, a sector player says.

Renewables Now spoke with HEC Solar’s founder and CEO Vladimir Tabutov ahead of the 13th edition of the Renewable Balkans conference that will take place in Bucharest, Romania, on October 11 and October 12, 2023. The topics discussed with him include the major effects of the war between Russia and Ukraine and the challenges the renewable energy industry is facing.

HEC Solar is a Bulgaria-based company focused on the engineering, development and construction (EPC) of photovoltaic (PV) projects and the provision of project management services. Active in the solar market since 2012, it has installed over 2.5 GWp of solar parks globally, mostly across Europe and is currently involved in over 25 projects in nine countries on the continent, including self-consumption solar and hybrid solar-wind-storage.

HURDLES DURING WARTIME

According to Tabutov, the war and the gas crisis have changed the consumer mindset and led to long-term changes to the way companies perceive security in the context of electricity supply and generation. The unstable environment and high electricity prices have pushed sector players and consumers to opt for quick and independent power generation and take a more serious approach to renewable energy and solar power production, in particular.

On the negative side, the expansion of renewables deployment has brought some challenges that trigger the need for actions in terms of regulation. The main hurdles, the CEO said, are caused by the uncertainties related to unstable legislation as governments are struggling to move ahead with the European Union's (EU) green agendas while trying to meet citizens’ demands for low electricity prices. This typically results in sticking to conventional non-renewable power generation sources and amendments of laws and regulations that are not sustainable, while at the same time creating an unstable and insecure environment for renewable energy investors and project developers.

For the solar segment, in particular, insufficient labour is a major issue. According to Tabutov, the entire solar industry suffers from labour shortage, both in highly specialised and skilled engineers.

“The combination of the growing solar market and overall labour shortage in the entire EU economy makes it even more difficult to attract talent, particularly in solar. Missing the right talent on its end leads to either slower growth or a quick one that threatens the quality of the projects,” he explained.

Along with the integration of new capacity, countries are trying to cope with weak interconnectivity and integration of the European electricity network. This limits the access to electricity where it is most needed “for the cheapest price possible” or completely obstructs it.

REPowerEU

Tabutov also spoke on the topic of the REPowerEU programme, pointing out both the positives and negatives of the mechanism. As a positive, he noted that REPowerEU allows governments to support short-term trends, like subsidising BESS solutions, and to invest in problematic areas of their energy sector.

"The negative side is that the short-term trends will drive sector players, companies, and service providers to focus on those short-term goals and stray away from the sustainable way of developing the green revolution. Renewable energy is competitive enough not to be subsidised,” the CEO commented.

MARKET IN BULGARIA

Asked about the Bulgarian market, HEC Solar’s CEO said that it is unique in its overall energy infrastructure stability, energy mix and the profile of its industrial consumers. Easing the permitting and grid-connection processes is of critical importance, as the complexity of the Zoning Act, the Energy Act, the Environmental legislation, and the Renewable Energy Act intertwine in a way that makes the development way too complex.

“We can do much more in agrivoltaics, floating, energy-storage-as-a-service, fast-tracking strategic projects, etc. However, the unstable political situation does not make this task easier,” Tabutov said.

Just days ago, Bulgaria's National Assembly passed proposed changes to the country's Energy from Renewable Sources Act, a move that will accelerate the permitting process for green production and grid interconnection. It also calls for creating a zoning plan for renewables deployment in line with the REPowerEU legislation, designating areas for the accommodation of new capacity. In addition, citizens will be able to set up energy communities and thus become market participants with any surplus electricity that they produce. EU standards will also be applied for guarantees of origin, including the possibility of issuing such certificates for gas from renewable sources and green hydrogen.

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