2. The Current Trends in Green Energy Concepts
The prevailing global trend focuses on generating green energy, which entails utilizing renewable energy sources (RESs). This trend holds immense significance due to the urgent need to combat climate warming caused by greenhouse gas emissions. The primary avenue for achieving a substantial reduction in greenhouse gas emissions is the worldwide commitment to the “net zero by 2050” strategy, as established by the Paris Agreement on climate protection
[4]. In alignment with the Paris Agreement, the European Union has bolstered its climate and energy policies, marking a significant shift in direction as part of the European Green Deal
[1]. This strategic plan, grounded in a comprehensive impact assessment, has led the European Commission to propose even more stringent 2030 targets, aiming for at least a 55% reduction in greenhouse gas emissions compared with 1990 levels, as outlined in the draft European climate law (Fit 55).
The European Union has consistently pursued the objectives of the “Clean Energy for All Europeans” package (CEP)
[2][3]. In December 2019, nearly all EU leaders expressed their commitment to implementing net zero strategies by 2050. The Paris Agreements have introduced a new dimension to climate policy, with the primary goal of limiting the global temperature increase to 2 °C above pre-industrial levels, as stated in Article 1.1(a), rather than solely focusing on reducing carbon dioxide emissions
[4]. In accordance with these policies and various EU documents, nations are making substantial investments in renewable energy resources. Numerous programs and initiatives have been established within the EU, including information campaigns and subsidies to support new investments, such as programs that promote the installation of photovoltaic panels, solar panels, and heat pumps
[1][2][3][4][5][6][11][12][15][16][17][18][19][20][21]. European policy has also spurred many countries to introduce regulations aimed at reducing greenhouse gas emissions and promoting the development of renewable energy sources
[12][13].
The possibility of providing support for RES investment and development stems from the European Union’s energy policy, as defined in, among other things, Directive 2009/28/EC. Through the Horizon 2020 program, the European Union is implementing measures to find and support new and innovative solutions that will help Europe successfully achieve these goals—from drawing light and heat from the sun to geothermal energy from deep within the Earth and all other natural energy sources. Horizon 2020 has several important projects underway aimed specifically at eliminating market barriers and accelerating the deployment of renewable energy technologies. These include financial instruments, such as auctions, which are becoming a pillar of efforts to support renewable energy policies; the AURES (European #H2020 research project on Auctions for Renewable Energy Support) and AURES II projects have identified and evaluated the auction options in use and determined their impact on energy policy mechanisms and markets under different conditions (
http://aures2project.eu/, accessed on 15 September 2023)
[15]. At the regional level, the CoolHeating project
[16] has supported the deployment of small modular heating and cooling grids in Southeast Europe using an improved business strategy and innovative financing schemes. The importance of prosumers, or energy users who both produce and consume electricity, is being addressed by the PV-Prosumers4Grid initiative
[17]. The BestRES project
[18] analyzed the possibility of aggregating various distributed renewable energy sources. In order for “bioenergy villages” to be created, bioenergy concepts must be in the investment stage. Thanks to the BioVill project
[19], villages in Croatia, Serbia, Slovenia, Northern Macedonia, and Romania have reached a point in their development at which they can cooperate with long-established markets in Austria and Germany. WinWind project partners
[20] have developed a number of good practices drawn from their own countries to increase public acceptance of wind energy in targeted regions. Biomass is also a valuable source of renewable energy. The SECURECHAIN project
[22] has contributed to the optimal management of the wood biomass supply chain in Europe. The SEEMLA (abbreviation from sustainable exploitation of biomass for bioenergy from marginal lands) project (
https://www.ifeu.de/en/project/seemla/, accessed on 15 September 2023)
[22] aimed to obtain high energy yields from inferior land, while the subject of the uP_running initiative
[22] is bioenergy obtained from tree pruning residues.
According to an analysis of the existing literature
[9][10][11][12][13][14][15][16][17][18][19][20][21][22] it is evident that researchers are showing a growing interest in exploring the challenges associated with renewable energy source (RES) development. Furthermore, there is a noticeable emergence of studies that assess the influence of these barriers on the implementation of RESs
[22]. This trend is clearly reflected in the scientific databases Web of Science and Scopus, as illustrated in
Figure 1.
Figure 1. Number of publications about RES barriers in the databases WoS and Scopus between 2004 and 2022 (“Barriers of renewables”).
Despite the increase in literature interest in this research topic, the authors found a research gap in the topic undertaken. It was found that there is a lack of studies that take into account the analysis of all determinants and barriers affecting the implementation and thus development of RESs. There are studies creating indicators or indexes to measure the impact of barriers on RES implementation
[22]. The literature has mostly either listed what the barriers to RES development are
[23][24][25][26][27][28][29][30][31][32][33] or evaluated them only for a single country
[24][25] or a non-EU country
[27][30][31][33]. However, in the area of socioeconomic factors, the literature has analyzed either the economic factors resulting from market imperfections
[23] or trade relationships
[29] with overdated data
[23][24][25][26][28] or omitted the level of social development of countries
[22]. There is a lack of analyses that take into account the impact of the market (overcapacity) and socioeconomic factors (socioeconomic development of the countries) or barriers (in a negative impact situation). There is a lack of holistic analyses that additionally attempt to analyze the occurrence of similar relationships for groups of countries or regions in all analyzed areas of RES development.
3. Barriers to Development of RESs
In the literature, various authors have pointed to several categories of barriers (
Table 1). The main barriers associated with the development of renewable energy include limited opportunities for entrepreneurs to finance investments, legal support regulations, administrative and procedural difficulties, and with the operation of transmission networks.
Table 1. Barriers to RES development according to the literature review.
Table 1 summarizes the barriers to renewable energy development from various studies conducted in different countries and regions over the years. In 1999 in Poland (Wiśniewski), the barriers included market issues related to economics and finance, as well as political and institutional challenges due to outdated goals and inadequate infrastructure
[23]. In 2015 in Poland (Wasiuta), the barriers encompassed political and institutional problems, administrative challenges, economic and financial issues, location-related hurdles, and information and education gaps
[24][25][26]. In 2015 in Chile (Nasirov et al.), the challenges consisted of economic and financial issues, technological and infrastructure obstacles, institutional and regulatory hurdles, and public awareness and information constraints
[27].
In 2012 in the European Union
[28], barriers were identified in generation, grids, market power and regulation, cross-border externalities, storage, and demand, and they included issues related to learning and knowledge spillovers, capital market restrictions, an uneven political playing field, community acceptance, planning consent and policy commitment, lack of network capacity, intermittency, controllability, securing peak capacity, market power and regulation, cross-border externalities, storage, and demand
[31]. In 2021 in countries in the European Union
[29], the barriers encompassed financial or economic factors; sociopolitical, regulatory, and environmental issues; and behavioral and psychological challenges
[32]. In 2013 in Australia
[30], barriers included administrative obstacles, lack of transparency, policy unpredictability, insufficient social approval, cost-related competitiveness issues, continued government backing for conventional electricity sources, and intellectual property issues
[33].
Also, in 2005 in the United Kingdom
[31], barriers involved systems failures, financial obstacles, skills gaps, risk perception, intellectual property issues, expectations and market uncertainty, policy framework, exit strategies and support continuity, and collaboration and partnerships. In 2021 in the European Union (Streimikiene), barriers covered financial or economic issues, sociopolitical, regulatory, and environmental factors, and behavioral and psychological challenges
[32]. In 2023 in Canada (Patel and Parkins), barriers included economic, environmental/technical, planning, and political factors related to renewable electricity projects
[33].
The literature review in
Table 1 indicates that many factors influence the development of RESs. These factors are often grouped in different ways; nevertheless, the most important ones can be grouped into four groups of factors: administrative barriers
[22][24][25][30][33], political barriers
[22][23][24][25][27][28][30][31][32][33], grid barriers
[22][26][27][28][33], and socioeconomic barriers
[22][23][24][25][28][29][31][32][33]. Barriers to administrative processes were indicated in many literature items and mainly included public procurement, environmental planning, and the duration of administrative procedures. Network barriers are related to the state of regulation of networks and infrastructure. It is worth noting that these barriers are particularly emphasized in the literature in the field of renewable energy. Political barriers have been indicated by almost all publications on RES, and they concern unstable political support and remuneration for RES and a lack of or unstable climate strategy. The last group of barriers concerns market, economic, and social factors. To summarize this group of factors in the literature, it is indicated that they depend on the level of socioeconomic development of a given country and the balance of production capacity in the renewable energy market. Overcoming barriers to the installation of renewable energy sources in the European Union is a complex but necessary task. By addressing regulatory challenges, providing financial support, fostering innovation, and promoting public awareness, the EU can continue its journey toward a more sustainable and greener energy future. Through coordinated efforts at both the national and European levels, the EU can lead the way in the global transition to renewable energy sources and mitigate the impacts of climate change
[23][24][25].
The first group analyzed are administrative barriers; among them, the researchers can describe the following barriers
[22][24][25][30][33]:
-
Administrative obstacles, including protracted regulatory approvals and permitting processes: lengthy and complex administrative procedures can hinder the timely development of renewable energy projects.
-
Lack of transparency and expensive procedures for connecting to the grid: the cost and complexity of connecting renewable projects to the grid can be a significant administrative barrier.
-
Policy unpredictability characterized by abrupt policy shifts and inconsistent decision-making: frequent changes in government policies related to renewable energy can create uncertainty for investors and developers.
To overcome these barriers, simplifying administrative procedures and reducing approval times can motivate renewable energy project developers. Also, transparent and cost-effective grid connection procedures are needed. Providing clear and affordable processes for connecting renewable projects to the grid can be a strong motivator. Offering long-term policy stability can encourage investment in renewable energy projects.
The second type of barriers are political barriers. In this case, the especially important barriers are
[22][23][24][25][27][28][30][31][32][33]:
-
Unstable political support and changing policies: inconsistent political backing for renewable energy projects can deter investment.
-
Opposition from local communities and government bodies: resistance from local communities and municipal councils can pose political challenges.
-
Dependence on regional governments: relying on regional authorities for support can result in varying priorities and inconsistent policies.
To overcome these types of barriers in RES development, governments should support a clear renewable energy strategy that can motivate investment and development. Also, an important problem is effective community engagement and public acceptance. Encouraging local communities to embrace renewable projects can be a significant motivator. Coordination between different levels of government can facilitate a more conducive environment for renewables.
The third type of potential barriers are economic barriers. The most important among them are
[22][23][24][25][27][28][31][32][33]:
-
High capital costs for renewable electricity projects: the initial investment required for renewable projects can be a barrier.
-
Long payback periods: extended timeframes for recovering investments can discourage potential investors.
-
Limited revenue/savings potential for renewable projects: concerns about the profitability of renewable energy projects can be a barrier.
-
High operational and maintenance costs: ongoing expenses for renewable projects can affect their economic viability.
To overcome economic barriers, it is important to decrease capital costs. This requires efforts to reduce the upfront costs of renewable energy projects, which can be a powerful motivator. Also, it is worth accelerating the timeframe for achieving a return on investment, which can make renewable projects more attractive, and providing financial incentives and support can motivate investors and developers.
The fourth type of the barriers are market barriers. These barriers are connected to problems like the following
[22][23][24][25][28][29][31][32][33]:
-
Market structure issues hindering renewable integration: challenges in the market structure can impede the growth of renewable energy.
-
The dominance of a few players in the market: market concentration can limit competition and innovation.
-
Volatility in spot market prices: price fluctuations in energy markets can create uncertainty for investors.
-
Limited availability of financial resources: a lack of accessible funding can be a market barrier.
To overcome them, it is important to diversify the market structure. This can be accomplished by encouraging competition and diversity among market players, which can motivate renewable energy development. The next important activity is to reduce market volatility by stabilizing energy prices, and markets could provide a stronger incentive for investment. Also, expanding financial support options can motivate renewable energy projects.
The last type of barrier in RES development is connected to infrastructure. The most important infrastructure barriers are
[22][26][27][28][33]:
-
Grid connectivity limitations and insufficient grid capacity: inadequate grid infrastructure can limit the integration of renewable energy.
-
Lengthy permit processing times for a large number of applications: delays in permitting can slow project development.
-
Inadequate infrastructure to support renewable energy deployment: a lack of infrastructure can be an infrastructure barrier.
To deal with infrastructure barriers, organizations should expand grid capacity and improve connectivity by strengthening grid infrastructure, which can facilitate renewable energy integration. Also, faster permitting can motivate developers to move forward with projects. Developing infrastructure that supports renewable energy can be a strong motivator.
Addressing these barriers and leveraging the corresponding motivators requires a comprehensive approach that includes regulatory changes, stable policies, financial incentives, infrastructure development, and community engagement. By carefully considering and addressing these factors, governments and stakeholders can accelerate the transition to renewable energy sources.
4. European Green Deal
The European Green Deal is an ambitious policy initiative aimed at addressing climate change and environmental challenges
[34]. It set a goal of achieving climate neutrality by 2050, meaning that the European Union aims to balance its greenhouse gas emissions with removals, effectively eliminating its net contribution to climate change
[35][36]. The Green Deal is closely tied to economic recovery efforts, especially in the wake of the COVID-19 pandemic
[37][38][39].
According to Kotseva-Tikova and Dvirak’s research, the NRRPs of member states, including Bulgaria and Lithuania, are designed to align with the Green Deal’s objectives, making sustainable and green investments a priority for economic growth
[40]. Both Bulgaria and Lithuania have taken measures to reduce greenhouse gas emissions. They have experienced changes in their industrial sectors, energy resources, and economic structures to contribute to the Green Deal’s goal of reducing emissions. The NRRPs of Bulgaria and Lithuania allocate a significant portion of their funding to support green initiatives. Lithuania plans to allocate 37.8% of its funds to green projects, while Bulgaria aims for 53.66%. These projects encompass areas such as renewable energy, energy efficiency, and environmental sustainability. To finance these green projects, both countries are looking to engage the private sector. Bulgaria anticipates substantial private sector investment of around EUR 2.4 billion, while Lithuania plans for EUR 815 per capita in private investments. This collaboration aims to leverage additional capital for sustainable initiatives
[39][40].
EU institutions should work toward harmonizing renewable energy policies and regulations across member states
[41]. This could create a more predictable environment for investors and project developers. Continued financial support for renewable energy projects is possible through mechanisms like the European Structural and Investment Funds (ESIF) and the European Green Deal Investment
[42]. Available and implemented projects at the level of the European Commission are tools in the climate policy of the EU member states. Educating the public about the benefits of renewable energy and involving local communities in the decision-making process can build support for renewable projects
[43][44].
Encouraging collaboration between research institutions, industry, and governments can drive technological advancements in the renewable energy sector
[45]. Implementing a robust carbon pricing mechanism can make fossil fuels less competitive and incentivize the transition to renewable energy
[46]. Strengthening cross-border energy infrastructure and fostering cooperation among member states can facilitate the sharing of renewable energy resources
[47].
Table 2 sums up the main strategies to overcome barriers in RES installation.
Table 2. The strategies to overcome barriers in RES installation.
Collaboration with international organizations and other countries allows for the sharing of best practices, technologies, and funding opportunities. Attracting foreign investment in renewable energy projects through favorable policies and regulations can boost development. Investment in grid expansion to accommodate renewable energy integration is essential
[48]. Developing energy storage solutions can address intermittency challenges. Promoting electric vehicle (EV) infrastructure and encouraging EV adoption can act as distributed energy storage
[49].
Offering insurance and guarantees can help mitigate risks associated with renewable energy investments
[50]. The investments are realized in small, medium, and large markets. Manufacturing companies, particularly energy-intensive sectors like metallurgy, along with individual consumers in smaller local markets, share a common interest in making investments
[61][62]. This shared interest stems from the imperative of deep decarbonization
[33]. Energy-intensive industries, such as metallurgy, are compelled to allocate resources toward Renewable Energy Sources (RES) to ensure their continued viability within the market
[63]. A prominent illustration of this commitment to decarbonization can be found in the metallurgical industry, as evidenced in the study by Gajdzik and Wolniak
[64]. This industry, characterized by its substantial energy demands, recognizes that embracing RES represents a pivotal step toward achieving sustainability and reducing carbon emissions. Similarly, individual consumers in localized markets are increasingly inclined to invest in RES as a means of contributing to a cleaner and more environmentally responsible energy landscape
[48].
Various industries beyond metallurgy are recognizing the significance of investing in renewable energy sources (RESs) to align with the imperatives of deep decarbonization. This strategic approach is not limited to any one sector but is instead a growing trend in the broader landscape of manufacturing and consumer markets
[56].
Industries spanning from automotive manufacturing to electronics and technology production are increasingly turning to RES as a means to reduce their carbon footprint
[55]. The automotive sector, for instance, is investing in electric vehicle (EV) technology, often powered by renewable electricity sources, to transition away from traditional fossil fuel-dependent vehicles. This shift not only reduces greenhouse gas emissions but also positions these companies favorably in an evolving market in which sustainability is a key driver of consumer preference
[58].
Similarly, electronics and technology manufacturers are incorporating RES into their operations and products. Data centers, which are essential for the functioning of modern technology, are being powered by renewable energy to mitigate their substantial energy consumption
[59][60][61][62][63][64]. Additionally, consumer electronics companies are designing products with energy efficiency in mind, often utilizing renewable energy to manufacture their devices
[65][66]. Digitalization is a strong support for the development of industries
[67]. In the European policy of the industrial concepts I 4.0 and I 5.0
[68][69], it is postulated that new technologies should be aimed at decreasing energy consumption. Even the tourism sector is incorporating green policies and promoting RESs and decarbonization
[70].
Long-term power purchase agreements (PPAs) provide revenue stability for project developers. Funding research and development efforts to advance renewable energy technologies and make them more cost-effective is a key strategy for long-term sustainability
[70]. Engaging in international diplomacy efforts, including participation in global climate agreements, can enhance the profile of renewable energy and create diplomatic opportunities for collaboration
[71].
The success of these strategies depends on tailoring them to the specific challenges and opportunities of each region. It requires cooperation between governments, businesses, communities, and international partners to promote and expand renewable energy development on a global scale.