Eastern Europe to focus on ‘ready-to-bank’, not ‘ready-to-build’, solar project development

“When we’re speaking to get to this ready-to-build [stage], it’s more about getting ready-to-banking,” said Stelian. “If I’m looking at how we’re trying to develop, construct and connect [a project], we’re looking mainly to see how we will find the financing that will be capable of [supporting] our projects.”

His distinction between “ready-to-build” and “ready-to-bank” drew nods of agreement and knowing laughter from the audience, and was a topic of discussion picked up by other panelists.

“I like this ready-to-bank [suggestion],” agreed Renske Ytsma, director of origination, project development and M&A at DRI. “For projects that we’re planning to operate, it’s not about bringing them to ready-to-build, but financial investment decision (FID). Revenue, market and offtake [agreements] come into play there. We [need] the grid in place, the permitted land and to get the market right.”

Grid connection remains a challenge

However, the panellists agreed that, as is the case in many other regions, a lack of available grid infrastructure (Premium access) is a key obstacle to accelerating projects, both in terms of actually commissioning a project and making it an attractive investment proposition for potential backers.

“The most challenging [part] of Poland is grid connection issues,” said Mirosław Połeć, head of development in Poland at Cero Generation. “Everyone is talking about the grid when they start the projects; there is no chance to start the projects [and] secure the land and get environmental permits.

“After two years you can apply for gird connection conditions, and this is really useless right now because we will not get any grid connection conditions for any PV projects anymore, in Poland, I believe.”

Połeć also suggested that the rate of new research and investigation into the grid moves much slower than market conditions affecting solar projects, such as price fluctuations, which means that even well-intentioned research into improving access to grid infrastructure can quickly see its results become obsolete.

“Even though you’ll start the studies, the situation in the grid will change, and you’ll get a refusal,” said Połeć.

The panellists suggested a number of technological solutions to this grid challenge, including the deployment of agrivoltaics (agriPV) systems, and the co-location of battery energy storage systems (BESS) with solar projects, topics that have come up repeatedly at discussions at and prior to the summit.

“We need to implement battery storage to the grid. We were doing that strategy – securing the land, applying for the grid – and then we got thousands of megawatts of rejections,” said Połeć. “Then we switched the strategy to find the grid first of all, and to find the grid, the best option is to apply with battery storage because you don’t need to have all of the permits connected to development processes.”

“Securing the connection with storage gives you an option to build,” he added, while Ytsma called agriPV a “key aspect” in helping accelerate solar projects along the development path.

“There is a huge discussion in Italy [about] what type of land is actually suitable – at least in Italy they have ‘no go-to’ areas – so when national governments make these types of rules, I think they really need to think about what can be standardised and what we can learn from each other.”

The potential of agriPV, in particular, is notable considering the longstanding perception of PV projects as a potential threat to agricultural land in countries across Europe. Despite figures from the EU suggesting that the deployment of agriPV on just 1% of Europe’s farmland could single-handedly meet the continent’s 2030 solar capacity installation targets, there remains a reluctance to engage with agriPV on a large scale in many markets.

This is particularly true in Poland, which Michal Glowacki, country head of Poland at Lightsource BP, said had transitioned from a “grid-constrained market” to a “land-constrained market” in recent years.

‘You’re not on steady ground’

Yet all of these solutions would require significant investment, and the importance of securing private finance, in particular, has already been discussed in depth by this morning’s speakers. Glowacki, who described himself as “a big fan of public tenders,” said that Eastern Europe could learn from its western counterparts with regard to engaging with private finance.

“If there’s a public tender where everyone can try their bit… the process goes really quickly,” Glowacki added. “The idea of go-to areas, from the EU; I’m a huge fan of that. I saw that some time ago in France and Germany, and of course there’s competition, but this allows the municipalities to move fast.”

A steady stream of private finance could also help in Eastern European markets where the policy framework for solar power in general, and adjacent technologies such as BESS, is less than supportive; according to Stelian, the government is “changing everything”.

“Sometimes with the connection part, you’re going to the project and waiting to see what will happen,” said Stelian. “If you’re a developer, you’re fighting with the price, the regulation [and] the new demands from the banks, so you’re not on steady ground.”

Similarly, Połeć noted that there is an absence of battery-specific legislation in Poland, which means that the government could be less able to provide support than the private sector.

“In the end, there’s no regulation that covers battery storage,” he said. “There is a challenge to change the view of battery storage, as well, because on the technical point of view, there is no challenge to integrate battery storage with PV; battery storage with PV is really easy.”

PV Tech publisher Solar Media is organising the fourth edition of Large Scale Solar Central and Eastern Europe in Warsaw, Poland 26-27 November 2024. The event focuses on Eastern Europe with a packed programme of panels from industry leaders responsible for the build out of solar and storage projects in Poland, Bulgaria, Romania, Hungary and the Baltics. For more information visit the event website.