On 2 November, the State Council delivered a verdict in a court case about the Porthos CO2 storage project. It ruled that the nitrogen ‘plant exemption’ is not legally compliant with nature conservation legislation. This will expire. On the same day, the industry association Holland Solar sounded the alarm: ‘This is a threat to the energy transition.’
Is that right?
“In any case, it is a statement that has a profound impact on the solar sector; threatens and delays ongoing projects and creates blockages for new developments. It has not helped the energy transition, especially now that we have to do everything we can to accelerate. That’s why we do what we do and develop solar fields.’
What about that?
LC Energy was founded in 2017 as a joint venture between QING and Low Carbon. Back then there was little, but now we have 11 people, and the first 4 projects with a total of 50 megawatt peak have been realized in 2021. This month we started the realization of 4 projects with a total of 60 megawatt peak, and before end of the year we aim to complete the financing of a further 4 projects totaling 80 megawatts peak. In addition, we hope to receive SDE++ at the beginning of 2023 for 90 megawatt peak divided between 3 projects. Currently, all project phases are coming together in our company; design, financing, construction and operation.’
What do you notice about the increasing pressure on the expansion of solar parks?
“It will become more difficult, among other things, due to interest rate increases and increased costs. For example, we recently received an award to connect a park with 16 megawatts of peak solar panels. We take into account around 60,000 euros per megawatt peak, as does SDE++. However, the network operator came up with an offer that is 2.5 times higher. This project is therefore not feasible. So we are still looking for an alternative solution.’
How do you handle the increasing CAPEX?
“It depends on which phase the project is in. When a project is ready to be built, we now try to realize it in the shortest possible time, so that the current high energy price can compensate for the high construction costs. But in the long term, something must be done if we want to build solar parks. The risk is increasing, we have to invest more equity, investors expect a higher return, and it is unclear whether and when construction costs will normalize again.’
How did the State Council’s nitrogen ruling affect you?
‘I fully share Holland Solar’s concerns. Until recently, we only had to investigate how much nitrogen deposition – the number of moles that fall out per hectare of Natura 2000 area – which is associated with the operation of a solar park. You can then use this to calculate the avoided nitrogen. Where solar parks replace agricultural businesses, it always came to 0.00. So now we also have to do it for the construction phase, and that is a big problem.’
‘The construction period is short. Even if we were to do all transport and construction entirely electric, if it were even possible, it would still be difficult to meet the nitrogen standard where we work close to vulnerable nature. This applies to any developer. While we are now focusing on accelerating ongoing projects from a profitability point of view, delay is the last thing we want. Will this judgment put a stick in the wheel, for example because we have to mobilize all possible experts for new calculations, and the municipal councils spend more time granting permits? Are projects in which we have already invested a lot of money at risk? These are questions that concern us and the sector as a whole.’
The energy transition and the restoration of biodiversity are two sides of the same coin…
‘It is true. Both parts are hugely important. We therefore always include the addition of ecological value in our development, for example in the design, by impoverishing the soil, an appropriate cutting regime and sow natural herbs. And don’t forget that when a solar park is realized, intensive agriculture usually disappears. We may emit more nitrogen during construction than a farmer does in the same period, but after a few years of operation it has already been more than offset, and there is only a surplus’.
Do you think that the Government’s decision should be taken off the table for solar parks?
“I can follow the thinking behind the decision. But solar parks are part of the solution and not part of the problem. This ruling puts a brake on many solar-on-shore projects, and many will not be able to move forward. This harms our energy transition and ultimately does not help to solve the nitrogen problem. Perhaps there is an opportunity in another approach; a nitrogen standard of zero for the construction period including the first few years of operation. So the knife cuts both ways, and it simulates developing parties who have not yet done so with a keen eye for nature’.