5. Policy instruments for reconciling biodiversity protection and renewable power expansion
This chapter presents policy instruments for integrating biodiversity considerations into the deployment of renewable power infrastructure. Drawing on examples, it explores how regulatory, economic, voluntary and information instruments are being used to address biodiversity impacts from solar, wind and power line developments. The chapter also highlights key design elements to promote effective application of these instruments.
Governments use various policy instruments to manage the impacts of renewable energy on biodiversity. A carefully designed policy mix can ensure that renewable power projects effectively mitigate adverse impacts on biodiversity and seek positive outcomes for nature. An effective mix will likely require a combination of regulatory (command-and-control), economic and other instruments (e.g., voluntary approaches and information instruments) (see Table 5.1 for an overview). What constitutes an appropriate mix will differ across countries and jurisdictions.
This chapter provides an overview of the policy instruments used to address biodiversity impacts from renewable energy deployment. It provides examples and highlights the strengths, challenges and limitations of the various instruments. The analysis focuses on instruments for managing the impacts at the construction and operation stage of the renewable energy life cycle. Some of the instruments covered here (e.g., environmental impact assessments, biodiversity offsets, responsible business conduct and environmental labelling schemes) can also be tailored to address the negative biodiversity impacts associated with sourcing materials for renewable energy infrastructure and eventual decommissioning of infrastructure. However, additional policy instruments are required to address the full life cycle impacts of renewable power development on biodiversity and ensure a biodiversity-aligned transition to low-emissions electricity systems (Box 5.1).
The growing demand for materials to construct renewable energy, power lines and associated low-emission technologies (e.g., batteries and electric vehicles), risks adding significant pressure to biodiversity owing to increased mining pressure and waste from decommissioned infrastructure. As outlined in Chapter 3, mineral demand (tonnes) for low-emission technologies increases six-fold from 2020-40 in IEA’s net-zero scenario 2050. Cumulative waste from solar PV alone is projected to reach 60-78 million tonnes by 2050.
Governments can help reduce mineral resource demand and environmentally harmful waste by promoting resource efficiency and material circularity. This requires a life-cycle approach with policies that promote resource productivity, material recovery, sustainable materials management and the 3Rs – reduce, reuse, recycle. Examples of policy options include:
Extended producer responsibility (EPR): EPR is an environmental policy approach in which a producer’s responsibility for a product is extended to the post-consumer stage of the product’s lifecycle. The approach seeks to increase recovery rates and decrease waste generation and leakage by transferring end-of-life management costs from the general public to producers and consumers of targeted products. The EU Waste Electrical and Electronic Equipment Directive, for example, requires all producers supplying PV panels to the EU market to finance the costs of collecting and recycling end-of-life PV panels put on the market in Europe.
Taxes on virgin material and landfill: Taxes on virgin materials (or materials that are toxic or difficult to recycle) incentivise efficient resource use by increasing the cost of extracting and using primary natural resources and raw materials. Resource efficiency may be realised through eco-designs that are less material-intensive, use less toxic materials and/or use secondary (recycled) materials. Landfill taxes increase the cost of waste disposal, thereby helping divert waste flows from landfills towards reuse or recycling.
Regulatory measures: Regulatory measures such as minimum recycled content, product standards, lifetime warranties, bans and restrictions can promote resource efficiency and circularity for the component parts of renewable energy infrastructure and other low-emissions technologies.
Source: (IRENA and IEA-PVPS, 2016[1]), End-Of-Life Management: Solar Photovoltaic Panels; (OECD, 2022[2]), Towards a More Resource-Efficient and Circular Economy: The Role of G20 OECD-G20-Towards-a-more-Resource-Efficient-and-Circular-Economy.pdf; (OECD, 2020[3]), Improving Resource Efficiency and the Circularity of Economies for a Greener World, https://doi.org/10.1787/1b38a38f-en; (OECD, 2016[4]), Extended Producer Responsibility: Updated Guidance for Efficient Waste Management, OECD Publishing, Paris https://doi.org/10.1787/9789264256385-en.
Regulatory (command-and-control) instruments are traditionally the cornerstone of biodiversity policy. They can reduce pressure on biodiversity by dictating which activities are permissible, when, where and how. Regulatory approaches are particularly important where markets cannot provide price signals to organisations to reflect the costs of polluting behaviour, or where strict control is required to safeguard biodiversity and avoid ecosystem collapse or species extinctions (e.g., protected areas or outright bans on development in sites of particularly high ecological sensitivity or value).
Generally, regulatory instruments should be i) closely targeted to the policy goal; ii) stringent enough for the benefits to outweigh the cost; iii) stable enough to give investors confidence; iv) sufficiently flexible to foster novel solutions; and v) updated regularly to provide incentives for continuous innovation and to reflect the latest science and knowledge (OECD, 2012[5]).
This section examines several regulatory instruments applied to renewable energy developments: environmental permitting, SEA and EIA, requirements for monitoring, data-sharing and disclosure, due diligence requirements, and infrastructure design and operations standards. Spatial planning was discussed in Chapter 4 and is therefore not covered here.
5.1.1. Environmental permits
In most countries, developers must obtain permits to construct and operate utility scale renewable power infrastructure, however, the process, requirements and timelines vary considerably across jurisdictions. Often developers must seek consent to develop or operate facilities from multiple government agencies, at national and subnational levels. As many as ten permits may be required for constructing and operating a solar power facility and as many as twenty for an offshore wind farm, depending on the project’s location, technology, scale and associated environmental risk (Energy Transitions Commission, 2023[6]). For example, in the US, a project that may impact species protected under the Endangered Species Act or the Bald and Gold Eagle Protection Act has an additional requirement to obtain an incidental take permit as part of the permitting process (Box 5.2) (Sud and Patnaik, 2022[7]). Some (typically smaller scale) projects may be exempt from permitting requirements as is the case for rooftop solar in Ireland and solar power plants of less than 1 kilovolt (kV) in Norway that can be connected to established low-voltage installations and wind power plants under 1 megawatt (NVE, 2023[8]; Government of Ireland, 2022[9]).
Wind developments that risk killing bald or golden eagles in the US may require an Eagle Incidental Take Permit under the Bald and Golden Eagle Protection Act. The permit authorises the "take" of eagles where the take is compatible with the preservation of bald and golden eagles and cannot be practicably avoided. This type of take is considered "incidental take." The U.S. Fish and Wildlife Service (FWS) encourages the development of an Eagle Conservation Plan for wind energy developers when incidental eagle take may occur and provides guidance on developing such a plan – including what information is needed for permitting. As part of the Eagle Conservation Plan Guidance FWS developed a collision risk model to predict the number of golden and bald eagles that may be killed at wind facilities. The collision risk model incorporates existing knowledge of eagle use around a proposed wind facility (exposure) and the probability of an eagle colliding with an operating turbine. This information is meant to reflect how exposure and collision probability can vary across the nation and takes the form of prior probability distributions. These distributions of prior knowledge are combined with project-specific information to predict the number of fatalities expected for a particular wind facility for consideration when issuing eagle incidental take permits to wind-energy facilities. The aim of the collision risk model is to ensure conservation of bald eagles and golden eagles when issuing permits.
Source: (US FWS, 2021[10]), Updated Collision Risk Model for Estimating Eagle Fatalities at Wind Energy Facilities; (FWS, n.d.[11]), Eagle Management, https://www.fws.gov/program/eagle-management/eagle-permits.
By determining whether a project can go ahead and under what conditions, well-designed permitting can help ensure infrastructure is constructed and operated in harmony with nature. It is good practice to issue permits only for projects that are unlikely to have significant adverse impacts on biodiversity. For example, wind farm developers may be required to demonstrate how, through implementation of the mitigation hierarchy, projected bird collision mortalities will be under appropriate mortality thresholds to obtain a permit (Box 5.3). To help ensure permitted projects do not pose a significant risk to biodiversity, governments can require projects to submit environmental risk screening and impact assessments (see EIA). Permitting may be conditional on the adoption of impact mitigation measures such as increasing the cut-in speed to reduce collision risk and a plan for offsetting residual adverse impacts. In the UK, for example, the 2021 Environment Act requires new developments in England seeking a planning permit to demonstrate a 10% increase in biodiversity at or near the project site, measured using Defra’s Biodiversity Metric (UK, 2021[12]). Additionally, governments can require an environmental monitoring plan to be submitted before a permit is issued to ensure the project remains compliant with regulations and respects recommendations of an EIA, as well as to identify and address any unexpected impacts (see section 5.1.4).
Scientific-based information on the potential impact of wind turbine collisions on birds and bats is fundamental for determining whether, and under what conditions, a wind energy project should go ahead. This requires not only an estimate of bird and bat mortality rates, but also how these additional individual mortalities impact the population. Key factors determining the impact severity of additional mortalities include: 1) the size of the impacted population; 2) its current demographic trend; and 3) the species vital rates (survivals and fecundities).
Mortality thresholds are used for wind power projects in several countries and by some financial institutions to determine an acceptable rate of mortality. Two main approaches are used. The first assumes a specified percentage of overall annual natural mortality in the relevant biogeographical population is negligible. In Netherlands, for example, this is 1% for all species while in Belgium it is 1% except for abundant species with favourable conservation status for which the threshold is 5%. In Germany, the “significance” threshold is 0.5%-5%. The second approach is the potential biological removal (PBR) method, which was originally developed for the management of marine mammals but has since been applied to other taxa. The US Marine Mammal Protection Act defines PBR as “the maximum number of animals, not including natural mortalities, that may be removed from a marine mammal stock while allowing that stock to reach or maintain its optimal sustainable population.”
Modelling for seven species suggests that commonly used mortality limits may lead to severe population-level impacts. A 1% additional mortality in post-fledging cohorts resulted in a 2%-24% decrease in population after 10 years. An additional mortality of 5% resulted in a 9%-77% decrease after 10 years. Alternative approaches for estimating appropriate mortality limits may be required, such as the one proposed by Schippers et al. 2020.
Source: (Chambert and Besnard, 2021[13]), Assessing the demographic impact of bird collisions with wind turbines. State of the art and methodological recommendations; (Schippers et al., 2020[14]), Mortality limits used in wind energy impact assessment underestimate impacts of wind farms on bird populations.
It is good practice to integrate environmental risk screening and EIA into the permitting process and for permit decisions to reflect the findings and recommendations of the assessment. Conducting an EIA after key decisions have been made and the development permit issued – or ignoring the recommendations of an EIA – limits the effectiveness of an EIA in safeguarding biodiversity. The extent to which the EIA and permitting processes are integrated differs substantially across countries. In some countries, such as Norway, the EIA process for renewable energy permitting is integrated early in the permitting process and is a precursor for submitting a permit request (NVE, 2022[15]; OECD, 2022[16]). In other countries the EIA and permitting processes are not directly linked and authorisation can be given for projects even where the EIA conclusion was negative (OECD, 2021[17]; OECD, 2021[18]).
The criteria determining which projects must conduct environmental risk screening and assessments also varies across countries. The criteria may depend on the type of project, its location or size. For example, in Japan an EIA is required for solar projects of at least 40 MW and wind of at least 10 MW. EIA is applied to solar power projects of 30-40 MW and wind power projects of 7.5-10 MW if deemed necessary after screening. In EU Member States, a renewable energy project in a Natura 2000 site must undergo a pre-assessment (screening) as part of the permitting process. If the screening determines that the project is likely to have a significant effect on biodiversity (Box 5.4), then an Appropriate Assessment is also required (European Commission, 2020[19]). In Indonesia, an EIA is required for transmission lines with capacity of 150 kV or more and solar and wind projects of 10 MW or more (Indonesia, 2012[20]). Careful design of criteria is fundamental to prevent harmful projects being permitted. Such criteria should be clear, consistent with latest science and knowledge, and revisited over time to adjust as necessary.
The notion of what is ‘significant’ needs to be interpreted objectively. The significance of effects should be determined in relation to the specific features and environmental conditions of the protected site affected by the plan or project, taking particular account of the site’s conservation objectives and ecological characteristics.
An assessment of significant effects must be based on good science (including best available methods and knowledge) and reliable data, be precautionary and, if appropriate, it should take into account the opinion of stakeholders, such as NGOs, nature conservation agencies or researchers. The assessment must apply the principle of proportionality, be compatible with the precautionary principle and consider:
Source: Extract from (European Commission, 2020[19]), Commission notice Guidance document on wind energy developments and EU nature legislation Commission notice Guidance document on wind energy developments and EU nature legislation Guidance document on wind energy developments and EU Nature Legislation.
https://ec.europa.eu/environment/nature/natura2000/management/docs/wind_farms_en.pdf.
Permitting is recognised universally as a bottleneck for swiftly scaling up renewable power projects (IEA, 2022[21]; IEA, 2022[22]). In some EU Member States, for example, granting permits for large projects can take nine years (EC, 2022[23]). This is concerning given the urgency of phasing out fossil fuels and ensuring energy security. Jurisdictions across the world are therefore revising their permitting processes with an aim to accelerate them (e.g. the REPowerEU Plan (European Commission, 2022[24]); and the Biden-Harris Administration’s Permitting Action Plan in the US (White House, 2022[25])).
Accelerating permitting of renewable power projects is important, but it must not increase the risk of significant adverse impacts on biodiversity. Multiple regulatory, administrative and societal barriers lead to slow and costly permitting processes, such as opaque or conflicting rules and regulations, over-complex and bureaucratic processes, lack of transparency, under-resourced permitting authorities and resistance from local communities and other stakeholders (Jack, 2022[26]; Energy Transitions Commission, 2023[6]; EEB, 2022[27]; Ulibarri, Cain and Ajami, 2017[28]). Many solutions to overcome these barriers can be implemented without posing additional risk to biodiversity, for example, establishing a one-stop-shop approach1, enhancing the capacity of authorities to efficiently process permit requests, setting permitting targets (timelines), developing guidelines to provide clarity to developers on the permitting process and enhancing transparency (and reducing paperwork) through digitisation (Vasconcelos et al., 2022[29]; Energy Transitions Commission, 2023[30]; EC, 2022[31]; Barr et al., 2021[32]).
Moreover, opportunities exist in many countries to reduce delays in renewable energy deployment by smarter and more systematic integration of biodiversity into planning and permitting processes. Key steps governments can take include:
Ensuring early and ongoing engagement of local communities, environmental experts and other stakeholders: involving stakeholders throughout the project development process can help build awareness and trust, and inform project design, thereby reducing the risk of opposition and associated permitting delays and legal cases (Energy Transitions Commission, 2023[30]; IEA, 2018[33]; Susskind et al., 2022[34]; Pollard and Bennun, 2016[35]).
Developing spatial plans such as renewable energy zones that explicitly account for biodiversity, including potential cumulative impacts: Renewable energy zones can provide certainty to developers and regulators, and facilitate accelerated permitting (see 4.3.2 and 4.4.1). Such plans should be subject to an SEA (see 5.1.2).
Improving data quality and accessibility: Sharing data on biodiversity and its interaction with renewable energy across projects and jurisdictions could reduce the burden of data collection in environmental surveys and EIAs, and increase certainty for developers, regulators and stakeholders. Governments can lead on environmental mapping, establish digital data banks and require standardised reporting and disclosure of environmental surveys by developers (Peplinski et al., 2021[36]; EC, 2022[31]; Vasconcelos et al., 2022[29]). See also 5.1.4.
Developing clear EIA policies and guidelines on EIA, application of the mitigation hierarchy and cumulative impact assessment: Clear policies and guidelines on conducting an EIA and cumulative impact assessment can promote efficient and effective application of EIA, reducing the risk of permitting delays (see 5.1.2).
Incorporating biodiversity and social criteria into tendering processes for renewable power: Accounting for biodiversity impacts when assessing tenders could help build societal support for projects and reduce the risk of legal action (Energy Transitions Commission, 2023[30]) (see 5.3.1).
Encouraging developers to adopt and deliver biodiversity-aligned strategies at the company level and in their projects: Demonstrating a commitment to protect and restore nature could increase stakeholder support and reduce conflicts. For example, Iberdrola has set a target of having a net positive impact on biodiversity by 2030. In Spain, Iberdrola (a Spanish power company) set aside EUR 40 million (~ USD 43 million) to protect plant life from 2018-19. In Brazil the company is creating a biodiversity corridor connecting forest and permanent conservation areas (Iberdrola, 2023[37]). Ørsted (a Danish power company) has partnered with the Lincolnshire and Yorkshire Wildlife Trusts to restore biodiversity around the Humber, a large tidal estuary on the east coast of Northern England. The initiative will invest more than DKK 22 million (~ USD 3 million) to restore seagrass and salt marsh and introduce half a million native oysters to improve the health and resilience of the estuary’s ecosystem (Orsted, 2022[38]).
5.1.2. Strategic environmental assessment and environmental impact assessment requirements
Strategic environmental assessments (SEAs) and environmental impact assessments (EIAs) are environmental planning and management tools. While EIA is widespread globally, SEA is applied in approximately 40 countries (including all EU Member States) although not per se for renewable power infrastructure (UN Environment, 2018[39]). A review of National Reports to the 13th Conference of the Parties to the Convention on the Conservation of Migratory Species of Wild Animals (CMS) found that 24% of the 65 countries2 that reported on renewable energy infrastructure or power lines mentioned conducting SEA for plans or programmes in the energy sector (CMS, 2020[40]).
SEA and EIA are complementary tools to assess the potential environmental impacts resulting from development and incorporate this information into decision-making. SEA is applied at a strategic planning level, for example, to assess the potential impacts of government plans, programmes or policies. EIA is used to assess the potential impacts from projects. Key steps involved in both SEA and EIA include an initial screening, scoping and assessment, consultation and monitoring. Typically, SEA and EIA are triggered when an initial screening indicates potentially significant adverse environmental effects (UN Environment, 2018[39]). The importance of environmental assessment is underscored by the OECD Council Recommendation on the Assessment of Projects, Plans and Programmes with Significant Impact on the Environment (Box 5.5).
Several countries have taken steps to better integrate biodiversity into SEA and EIA (UN Environment, 2018[39]). To promote these efforts, the EU’s EIA Directive lists biodiversity as a factor to be considered and has prepared “Guidance on Integrating Climate Change and Biodiversity into Strategic Environmental Assessments” and “Guidance on Integrating Climate Change and Biodiversity into Environmental Impact Assessments”. The CBD requests Parties to require EIAs of proposed projects that are likely to have significant adverse effects on biodiversity, with a view to avoiding or minimising such effects (CBD, article 14.1.a). At CBD COP8, Parties endorsed voluntary guidelines on biodiversity-inclusive environmental impact assessment and draft guidance on biodiversity-inclusive strategic environmental assessment (CBD, 2006[41]). At CBD COP11, Parties endorsed voluntary guidelines for the consideration of biodiversity in EIAs and SEAs in marine and coastal areas (CBD, 2012[42]).
Establishing legal requirements and guidance for biodiversity-inclusive SEA and EIA in the power sector – and ensuring their adequate implementation – could be pivotal to ensuring renewable power developments do not compromise efforts to achieve biodiversity goals. This section examines each of these tools in turn, identifying challenges, opportunities, and good practices to scale up their use and effectiveness.
The eight recommendations of the OECD Council on the Assessment of Projects, Plans and Programmes with Significant Impact on the Environment are:
1. Use environmental assessment as part of the planning, development and decision-making process for projects, plans and programmes having potentially significant impact on the environment.
2. Establish clear scope and procedures for assessment of the environmental impacts and for determination of relevant mitigation measures as inputs to the planning and decision-making process in order to restore and enhance environmental quality.
3. Incorporate analysis of reasonable alternatives in the assessment of environmental impacts of projects, plans and programmes with a view to arriving at an informed decision that includes best environmental considerations.
4. Include practical and appropriate measures for consulting public authorities having functions and responsibilities relevant to the environmental impacts of projects, plans and programmes.
5. Implement, where appropriate, practical measures for informing the public and for participation by those who may be affected at suitable stages of decision-making on projects, plans and programmes.
6. Ensure that there are means of putting into effect measures derived from the environmental assessment of projects, plans and programmes.
7. Implement appropriate practical measures for monitoring the effects on the environment of projects, plans and programmes that have been subject to environmental assessment.
8. Institute, as appropriate, environmental assessment procedures for projects, plans and programmes that might have significant transboundary impacts.
Source: OECD, Recommendation of the Council on the Assessment of Projects, Plans and Programmes with Significant Impact on the Environment, OECD/LEGAL/0172.
SEA
Considerable scope exists to strengthen the application of SEA. While SEA is applied systematically in some countries, in other countries it is ad hoc and sporadic. Of the forty countries with SEA, only a subset has legal requirements to conduct an SEA (UN Environment, 2018[39]). These legal requirements differ considerably in terms of which policies, programmes and plans and which sectors are subject to assessment. The lack of legal force of SEA provisions is cited as a limiting factor in SEA implementation (UN Environment, 2018[39]).
Given the potential for significant, cumulative, impacts on biodiversity from renewable power development, SEA has a clear role in strategic planning in the power sector. SEA can be applied at multiple scales (regional, national, local), depending on the policy, plan or programme. Examples of where SEA could be applied in the low-emissions electricity transition include low-emission long term development plans, climate and energy plans, ten-year grid development plans, broader national and economic social plans, spatial planning and large renewable energy developments. For example, France’s multi-annual energy programme was subject to an SEA, which evaluated impacts on biodiversity as well as climate, and the physical and human environment (MTES, n.d.[43]). The SEA listed the positive and negative impacts of the programme’s measures on biodiversity and provided mitigation measures for each renewable power technology to respect the mitigation hierarchy.
To optimise their effectiveness, SEAs can be explicitly tiered with EIAs so that they are considered in sequence. The strategic planning level at which SEA is applied is more conducive to assessing cumulative impacts and identifying development scenarios that avoid or minimise these impacts (Josimović, Cvjetić and Furundžić, 2021[44]; Nwanekezie, Noble and Poelzer, 2022[45]). Many of the recurring issues during EIA and project licencing that cause delays and conflicts could be prevented by adequate planning supported by SEA (Dutta et al., 2021[46]). An SEA provides the terms and conditions for project developments and regional monitoring, whereas an EIA assesses in greater detail the potential impacts of different project implementation options.
Given their interdependence, data-sharing across and among SEAs and EIAs is good practice. Data-sharing can help to overcome the data limitations facing environmental assessments and reduce the data-gathering burden on developers (see also 5.1.4). Ideally, the data collated through the spatial planning process and associated SEA would inform project-level assessments by identifying knowledge gaps and highlighting measures that may be required to avoid or minimise significant impacts. Similarly, data collected through project-level EIAs could help to inform spatial planning processes and adaptive management approaches.
SEAs are intended to assess alternative options. However, the adequate assessment of alternative options, though often required by legislation, tends to be lacking (UN Environment, 2018[39]). Developing clear guidelines on how to assess alternatives and establish baselines could facilitate the identification of alternative options (Zhang, Christensen and Kørnøv, 2013[47]). Additionally, initiating an SEA at the earliest stages of planning (i.e. when strategic aims and goals are being set), rather than waiting for a plan, programme or policy to be drafted, could enable a broader range of alternatives to be considered (UN Environment, 2018[39]).
Other good practices include cross-sectoral collaboration to account for cumulative impacts across sectors (see Chapter 4) and engagement of environmental experts, local and indigenous communities and other stakeholders throughout the SEA process. This can help ensure that the most relevant and robust environmental information is considered in decision-making and that the divergent interests and values of stakeholders are accounted for. A critique of SEA in some countries has been the lack of guidance on public participation in SEA and the lack of mechanisms for public participation at the screening or follow-up stage (UN Environment, 2018[39]). Participation is often limited to a mechanism for submitting comments following the publication of documents. Many countries do not ensure public access to SEA monitoring results and evaluations in their national legislation (UN Environment, 2018[39]).
EIA
Environmental impact assessments are widely used to assess potential impacts of development projects, including renewable power infrastructure. Legislative requirements for EIA are in place in most countries, but criteria for when EIAs are required for wind, solar and transmission infrastructure differs (see 5.1.1).
The effectiveness of EIAs varies considerably within and across countries. Shortcomings in implementation can stem from gaps in legislation, a lack of due process or limited capacity to comply with legislation (UN Environment, 2018[39]; Caro-Gonzalez, Toro and Zamorano, 2021[48]). Given targets for rapid renewable power expansion, it would be prudent for countries to review legislation, guidance, governance and institutional arrangements to ensure they facilitate efficient and effective application of EIA for renewable power projects likely to have significant adverse impacts on biodiversity. Countries may find value in developing sector-specific guidance on environmental impact assessments. For example, France developed tailored guidance on environmental assessments for ground-mounted solar energy for public and private developers, EIA practitioners, regulators and other stakeholders (Government of France, 2011[49]). South Africa developed guidance on EIA for renewable energy projects to assist competent authorities and applicants (Deparment of Environmental Affairs, n.d.[50]).
As with SEA, a critical component of EIA is the development of alternatives (i.e., alternative projects or project designs) to identify the approach with the lowest environmental impact. While many countries require the consideration of alternatives, some do not (e.g., Georgia and the Peoples’ Republic of China) (UN Environment, 2018[39]). Further, while it is considered good practice to include a “no project” option, this is not widely practiced. Adapting legislation and adopting accompanying guidance on the development of alternatives may be necessary for some countries. The EU, for example, revised its EIA Directive in 2014 making it mandatory to include “a description of the reasonable alternatives studied by the developer” and the reasons for their choice, rather than just “an outline of the main alternatives” as stipulated in the previous version of the Directive.
To maximise their effectiveness, EIAs should consider not only direct impacts but also indirect and cumulative impacts of a project on biodiversity (see Box 5.6 for an example of a cumulative impact assessment). The importance of cumulative impact assessments is increasingly recognised, and it is a mandatory component of EIA in several countries (e.g., Bhutan, Brazil, Canada, EU Members States, Kenya, Panama). However, implementing cumulative assessments in a robust, consistent and cost-effective way remains challenging (Gill and Hein, 2022[51]). For example, offshore wind power projects in the UK during the first two rounds of licensing faced long delays in permitting due to uncertainty about the projects’ cumulative impacts (Durning and Broderick, 2018[52]).
To help overcome challenges in assessing cumulative impacts, governments could develop and disseminate guidelines on assessing cumulative impacts. For example, in response to the delays in UK offshore wind power projects, the industry and regulators co-created cumulative impact assessment guidelines, which have been applied by the industry and have helped to improve efficiency and transparency (Durning and Broderick, 2018[52]). Scotland’s Nature Agency has published guidance on “assessing the cumulative landscape and visual impact of onshore wind energy developments” (NatureScot, 2021[53]) and on “assessing the cumulative impacts of onshore wind farms on birds” (NatureScot, 2018[54]), which intend to guide cumulative impact assessment during both strategic planning and project development. Several governments have developed general guidance on cumulative impact assessments (e.g., Canada, EU) (UN Environment, 2018[39]), which could be applied to renewable power projects. A technical report prepared by the US National Renewable Energy Laboratory for the IEA’s Working Together to Resolve Environmental Effects of Wind Energy (WREN) initiative outlines current practices, challenges and opportunities for assessing cumulative impacts specifically for wind developments (Gill and Hein, 2022[51]).
Assessing cumulative impacts already at the screening stage is good practice (UN Environment, 2018[39]). If cumulative impacts are not considered at the screening stage, it is possible that projects considered to have insignificant direct and indirect impacts are permitted to proceed without an EIA, despite posing considerable risk to biodiversity when accounting for cumulative impacts. The example of the cumulative effects of medium-sized solar energy in Korea and Japan highlighted in Chapter 3, illustrate this concern (Kim et al., 2021[55]).
In addition to stipulating requirements for cumulative impact assessments, EIA legislation could be strengthened through explicit reference to the mitigation hierarchy. Few national EIA laws refer to the mitigation hierarchy, and this is considered a shortcoming that could lead to its ad hoc and inconsistent application (UN Environment, 2018[39]). As outlined in Chapter 4, efforts to mitigate biodiversity impacts should place the emphasis first on avoidance measures before considering minimisation, then onsite restoration and offset measures for the residual impacts.
As with SEA, critics point to the lack of adequate mechanisms for stakeholder participation in EIAs (UN Environment, 2018[39]). Ensuring adequate and effective mechanisms for stakeholder engagement throughout the EIA process is essential to inform the EIA and subsequent project decisions. In addition to environmental experts, it is important to engage indigenous and local communities to ensure their rights are respected and their knowledge of local biodiversity is considered. Implementation of the CBD’s “Akwé: Kon Voluntary Guidelines on Environmental and Socio-cultural Assessment” could support efforts to ensure the full and effective participation of indigenous and local communities during EIA processes (SCBD, 2004[56]).
An example of an ex-ante cumulative impact assessment of wind energy is the IFC-commissioned Tafila Region Wind Power Project Cumulative Effects Assessment (CEA) in Jordan. The CEA was conducted at a landscape scale, encompassing the Dana Biosphere Reserve and surrounding Dana Important Bird and Biodiversity Area, and five wind energy sites. The CEA involved three phases:
1. Scoping: This phase provided an initial review of existing data, engaged stakeholders, determined spatial and temporal boundaries of the CEA, and conducted a screening process to select Valued Environmental and Social Components (VECs). Birds, bats and “habitats and other species” were identified as the three VEC categories potentially at risk.
2. Supplementary data and capacity development: Activities included an ornithological training for Jordanian bird surveyors on standardised methods for conducting bird flight activity surveys at wind energy facilities; standardised surveys at wind energy facilities to augment collision risk model (CRM) suitable data, comparable across all the sites; a CRM analysis to obtain species-specific annual fatality rate estimates for at-risk bird populations; compiling of a common database of bird flight activity records from the various sites; a trends analysis using the common database to complement the CRM and allow better understanding of the flight behaviour of Migratory Soaring Birds (MSBs) in the study area; and a reconnaissance site visit and rapid effects assessment for bats and for habitats and other species
3. CEA Framework: A six-step CEA framework using a risk-based approach was developed for birds. The objective was to identify priority VECs at highest risk of cumulative effects so that mitigation, monitoring, and management measures could be put in place to safeguard these populations. The process identified species populations potentially at risk (step 1), evaluated their sensitivity (relative importance and vulnerability) (step 2), and assessed the likelihood of cumulative effect of WPPs on each species population (step 3). Species with the highest risk ratings were determined to be priority VECs. Fatality thresholds were then determined for each priority bird VEC using species-specific demographic information, CRM results, and external stressor fatality estimates from an expert panel (step 4). A site-specific and joint Mitigation and Monitoring Plan (MMP) was then created (step 5), and institutional and information management arrangements proposed (step 6).
Thirteen priority bird species were assessed to be at highest risk through a process that included data analysis, literature review, expert review, and reasoned evaluation of population sensitivity and likelihood of collision risk. Eleven were raptors comprising four migratory soaring bird populations that use the Rift Valley/Red Sea flyway, seven species that are resident or summer breeding raptor populations and two passerine species. Populations of these bird species were assessed to determine an annual threshold of mortalities that each could sustain without affecting their long-term viability. For all 13, the target was determined to be zero mortalities. Mitigation and monitoring measures for birds as well as institutional arrangements were included in the CEA Mitigation and Monitoring Plan (MMP).
Source: (IFC, 2017[57]), Tafila Region Wind Power Projects Cumulative Effects Assessment, www.ifc.org/wps/wcm/connect/62ba7322-8006-4ac4-ab50-f7d0bdd51dcb/CEA+Report+2-16-17+web_w+new+cover.pdf?MOD=AJPERES&CVID=lFczcQe
5.1.3. Prohibiting or mandating specific designs or practices
The risk to biodiversity of renewable power and electricity grid infrastructure depends partly on technology design and the construction and operational practices adopted (see Chapter 3). Governments can steer developers towards technologies and practices that entail relatively lower ecological risk by setting mandatory design or performance standards and prohibiting use of technologies of particular high risk. Examples of biodiversity-related standards for renewable power infrastructure are:
Standards and bans to reduce risk of electrocution by power lines: Some power line designs (referred to as “killer poles”) pose significantly higher risk of electrocution than other designs yet are still in operation in many countries (particularly developing countries). Bans and standards could be used to ensure only power lines that pose low risks of electrocution are deployed or in operation (Bern Convention, 2004[58]; Prinsen et al., 2012[59]). Several countries have adopted standards and bans that have driven retrofitting of existing power lines and prohibited new deployment of particularly harmful power line designs (Raptor Protection of Slovakia, 2019[60]). For example, a Spanish Royal Decree in 2008 established measures to protect birds from risk of electrocution and collision on power lines (Spain, 2008[61]). The Decree is to be updated following the adoption of the Spanish Biodiversity Strategic Plan in December 2022. Germany requires newly erected masts and technical components of medium-voltage lines to be constructed in such a way that birds are protected against electric shock, and provided a deadline for retrofitting existing medium-voltage lines that posed a risk (European Commission, 2018[62]).
Specific design standards could include, for example, requiring a minimum distance between conductors to avoid birds touching two conducting elements at the same time. The EU guidance advises a minimum requirement of 140 cm (European Commission, 2018[62]). In countries with large bird species at risk of electrocution, the distance may need to be greater (Sielicki, 2020[63]).
Wind turbine operational curtailment: Operational curtailment such as shutting down turbines during bird and bat migrations, increasing the cut-in speed of wind turbines and feathering (pitching blades parallel to the wind to minimise rotation) have been shown to effectively reduce mortality from collision (see 3.1.2). For example, Whitby, Shirmacher and Frick (2021[64]) estimate that setting the cut-in speed to 5 metres/second (m/s) could reduce the total bat mortality at individual facilities in any given year by 33%–79%. Governments can set requirements to adopt operational curtailment under certain conditions. The US states of Maine and Vermont, for example, legally require all wind farms to increase their cut-in speed. In Canada, Ontario and Alberta require shutdown of certain wind turbines when mortality thresholds are reached (Le Maître, J et al., 2017[65]).
Governments should seek to adopt curtailment requirements that are both environmentally-effective and cost-effective. Operational curtailment may result in losses in annual energy production. Simulations in the US, for example, estimate annual energy production loss of <1% to >10% depending on the curtailment scenario. Curtailment strategies based on weather, season and time of day would minimise risks at lower cost than blanket curtailment (Squires et al., 2021[66]). Smart curtailment approaches that leverage technology to provide and respond to real-time data may facilitate more cost-effective mitigation (Hayes et al., 2019[67]; McClure et al., 2022[68]; Sheppard et al., 2015[69]).
Standards for regulating piling noise from offshore wind turbine construction: Pile-driving is a source of disturbance for marine wildlife such as harbour porpoises (see Chapter 3), and is regulated by standards in some countries. In Denmark, for example, the accumulated Sound Exposure Level (𝑆𝐸𝐿𝐶24ℎ) from each piling sequence must not exceed a threshold value of 190 𝑑𝐵 𝑟𝑒 1 𝜇𝑃𝑎2 𝑠 (porpoises permanent threshold shift). If the estimated 𝑆𝐸𝐿𝐶 exceeds the threshold the source level must be mitigated accordingly. If the actual accumulated SEL exceeds the threshold value, then the concessionaire must take measures to identify the causes of this deviation and perform corrective measures, including adjusting the installation method. The Danish guidelines are expected to evolve as marine bioacoustics develop so that more species-specific weightings can be used, accounting for the specific hearing sensitivities of each species when estimating the impact of a given noise source. Species-specific weightings could both reduce over-regulation and ensure that harm to all exposed species is adequately mitigated (Tougaard, Beedholm and Madsen, 2022[70]).
Standards for rooftop solar on new buildings: Capitalising on the potential of rooftop solar could help accelerate the transition to low-emissions electricity with minimum risk to biodiversity, as it does not entail land or sea-use change (except from mining for mineral components). As part of building standards, governments can mandate new buildings and existing public buildings to have solar arrays. The 2022 Energy Code in California, for example, requires all newly constructed commercial buildings to have a solar array and an energy storage system installed (California Energy Commission, 2022[71]).
To ensure environmental and cost-effectiveness, standards need to be sufficiently stringent and enforced, while also providing the necessary flexibility to foster innovation. For example, various solutions exist for reducing piling noise, which may vary in cost-effectiveness and feasibility in different contexts. By setting scientifically based noise restrictions on piling, rather than prescribing a technology, governments can foster innovation, encouraging industry to develop cost-effective noise mitigation solutions. Standards may also need to be regularly updated to reflect latest knowledge of renewable energy infrastructure impacts and mitigation effectiveness, and to provide incentives for continuous innovation.
5.1.4. Monitoring, data sharing and disclosure requirements
Post-construction monitoring of renewable energy projects is fundamental for ensuring renewable power expansion is biodiversity-aligned. Post-construction monitoring serves several purposes (European Commission, 2020[19]). First, it tests the validity of the conclusions, both in the short and long-term, arising from environmental impact assessments (European Commission, 2020[19]). Such validation is particularly important considering uncertainty around tipping points, cumulative impacts, the effects climate change will have on biodiversity and ecosystem services and the accuracy of models. For example, post-construction monitoring of bird or bat mortality at wind farms can assess whether predictions from collision risk models were accurate. Second, monitoring can ensure mitigation measures adopted are effective throughout the project’s lifetime. Information gleaned from post-construction monitoring allows developers to adjust their projects to ensure biodiversity is safeguarded.
Project-level monitoring can also provide broader benefits, by informing other projects and strategic landscape or seascape level planning. Monitoring data can contribute to the knowledge base on context-specific biodiversity impacts from renewable energy and provide insights on the effectiveness of mitigation measures. The data can inform environmental impact assessments – including cumulative impact assessments – permitting requirements and decisions, and ultimately the location and design of renewable energy projects.
Governments can mandate post-construction monitoring of renewable energy impacts (e.g., as a condition for obtaining an environmental permit). Additionally, governments could develop or promote protocols or guidelines for monitoring the biodiversity impacts of renewable energy projects. By stipulating specific monitoring approaches or requirements, protocols can ensure monitoring is adequate and standardised (while allowing flexibility to ensure the most appropriate monitoring approaches are adopted for the habitats or species of concern), thereby allowing comparison of impacts and analysis of combined impacts from multiple projects. Monitoring guidelines could outline principles and good practices for developing indicators, selecting methodologies, defining the appropriate spatial scale, monitoring effort, timing and frequency, and standardised data collection to facilitate data sharing.
Several governments require monitoring of renewable power projects (e.g. Germany), have developed protocols for monitoring renewable energy projects (e.g. France, Box 5.7), or have produced guidelines (e.g. New York State, US; US east coast; Saskatchewan, Canada; South Africa) (Aronson et al., 2020[72]; Jenkins et al., 2015[73]) (New York State, 2016[74]; MoE Saskatchewan, 2018[75]) (ROSA, 2021[76]). However, many countries developing renewable power do not have such protocols or guidelines. Furthermore, a review of monitoring guidance and protocols for offshore wind in the Baltic Sea and North Sea found inconsistencies in how methodologies are applied and recommended greater consultation and harmonisation of methods at an international and regional level (Stephenson, 2021[77]).
The Ministry for Ecological Transition in France has developed national guidance for implementing monitoring of wind energy development projects in relation to birds and bats. The main objectives are to:
Assess the real effects (bird and bat collisions) and the effectiveness of mitigation measures;
Obtain sufficient data from several wind farms to calculate average mortality rates for birds and bats;
Collect data at national level to underpin future policy and actions.
This protocol requires at least one post-construction monitoring measurement during the first 3 years of operation. If no significant effects are identified, at least one follow-up measurement should take place in the next 10 years. If significant effects are observed, corrective measures must be implemented and a new post-construction monitoring measurement must be carried out within the next year. The protocol gives precise instructions on the periods of the year when monitoring must be conducted. These periods should always be relevant for the specific case. For example, some wind farms might have more effects on wintering waterfowl, while other wind farms might have more effects on breeding raptors. The protocol also gives precise instructions on: (i) the number of countings (at least 20); (ii) the number of turbines that must be monitored; (iii) the method for searching for carcasses, etc. For bats, the monitoring campaign must measure in pre-defined periods (specified in the protocol) both bat activity at the level of the turbine and carcasses on the ground.
Source: (MTES, 2018[78]), Environmental monitoring protocol for terrestrial wind farms.
While the specific approach and focus of monitoring may differ across wind, solar, power lines and other infrastructure, good practices generally include:
Defining clear objectives and scope for monitoring. Monitoring should be designed to respond to clearly defined questions, thereby providing the necessary information to understand and mitigate adverse impacts from renewable energy projects. Extensive but poorly defined monitoring programmes risk being “data-rich, information-poor” and unnecessarily costly (Wilding et al., 2017[79]). It is also important that monitoring effort is commensurate with the risk posed by the project (Bennun et al., 2021[80]).
Adopting indicators based on the Pressure-State-Response model, and ensuring they are relevant (see point above), analytically sound and measurable (OECD, 1993[81]). For a wind farm, for example, a pressure indicator could be “fatal avian collisions with wind turbines”, a state indicator could be “population size of affected avian species” and a response indicator could be “number of wind turbine shutdowns-on-demand” (Bennun et al., 2021[80]).
Establishing a pre-project baseline against which to assess any changes. A common approach for pre and post-construction monitoring is the before-after-control-impact (BACI) model. In addition to monitoring the baseline and changes at the project site it may be necessary to monitor a control site to account for any background environmental variability (European Commission, 2020[19]).
Standardising the indicators and methodology for biodiversity surveys to ensure comparability of results pre- and post-construction and throughout the lifetime of the project (European Commission, 2020[19]).
Matching timing and frequency of monitoring efforts to temporal movements of species and phenology (Amerson et al., 2022[82]). For example, monitoring impacts of a renewable power facility during breeding seasons and migration will be important for some projects.
Coordinating monitoring schemes across projects and landscapes to track and mitigate cumulative impacts more effectively. Belgium, for example, has established a monitoring programme for offshore wind projects. Monitoring is required in the environmental permit and coordinated by the Operational Directorate Natural Environment of the Royal Belgian Institute of Natural Sciences (RBINS, 2023[83]).
To ensure project monitoring delivers wider benefits for renewable energy development, monitoring data must be robust and easily accessible for other developers and energy planners. While some developers already share their data publicly, such as the Wolfe Island Wind Farm in Ontario, Canada (Transalta, 2022[84]) and the Gullen Range Wind Farm in New South Wales, Australia (Gullen Range Wind Farm, 2016[85]; Bennun et al., 2021[80]), many do not (Stephenson, 2021[77]). Significant scope exists to improve the quality and accessibility of monitoring data and enhance transparency. Governments have a role in driving improvements in data quality and transparency, for example, by encouraging or requiring developers to report data and insights from their pre- and post-construction monitoring and providing platforms to facilitate data sharing (Box 5.8).
The momentum building around nature-based disclosure, through initiatives such as the Taskforce Nature-Related Financial Disclosure, could also play a role in addressing data and transparency challenges. Specifically, nature-based disclosure could help shift investments towards renewable power projects that are environmentally-sound and away from more harmful developments. Several jurisdictions have already introduced regulations that require nature-related disclosure in some contexts (e.g. Article 29 of the French law on Energy and Climate (France Treasury, 2021[86]) and the EU Sustainable Finance Disclosure Regulation (EU, 2022[87])).
Limitations in the availability, quality and application of environmental data are widely reported challenges that undermine the effectiveness and efficiency of SEA, EIA and permitting processes for renewable power projects. Data challenges can result in negative biodiversity impacts and economic costs. For example, the environmental assessment of the London Array wind farm in the UK underestimated potential impacts on Red-throated Divers (Gavia stellata) and Little Auks (Alle alle) due to data deficiencies. Significant population density declines were observed in proximity to the wind turbines resulting in the second phase expansion, which spanned 39km2 and comprised 56 new turbines, being cancelled late in the planning phase.
Governments can support improvements in data availability and quality by developing or funding central data repositories, biodiversity mapping tools and guidelines on data access and use. In the EU, the INSPIRE Directive has promoted efforts to increase public access to spatial data, including on species, habitats and energy resources, and to coordinate data use across governments. Several governments have developed centralised portals that collate environmental assessments or integrate biodiversity data that can be used to inform SEA/EIA and subsequent mitigation measures. For example:
Brazil has established an online repository of environmental impact studies to improve knowledge and data, including on renewable energy impacts.
Denmark’s Natural Environment Portal provides access to a variety of environmental data that can inform SEA and EIA.
Ireland’s Environmental Protection Agency maintains an up-to-date SEA Spatial Information Sources Inventory, which covers biodiversity and other environmental assets.
European Union’s European Marine Observation and Data Network (EDMODnet) processes marine data according to international standards and make that information freely available as interoperable data layers and data products.
The Crown Estate’s Marine Data Exchange in the UK collates marine industry survey data, research and evidence. It provides access to information collected during pre- and post-construction phases of offshore wind energy projects with the aim of de-risking investments and reducing survey costs.
Legal requirements could help ensure data collected through SEA/EIA processes and post-construction monitoring are collected, reported and managed consistently (i.e., standardised), and made publicly accessible. For example, New York State law requires offshore wind energy developers selling power to New York State to make non-proprietary environmental data publicly available “as soon after collection [as] is practicable for use by third parties in decision-making around adaptive management”. In addition to supporting adaptive management, this requirement is intended to help fill knowledge gaps concerning marine wildlife populations and ecosystem dynamics given the projected growth in offshore wind.
Source: (Brazil, 2022[88]) (COWI, 2009[89]) Study concerning the report on the application and effectiveness of the EIA Directive Final report; (Howard, 2018[90]) Industry evidence programme: offshore windfarms - pilot industry evidence base. Report to The Crown Estate and Royal HaskoningDHV; (Ireland EPA, 2022[91]), SEA Spatial Information Sources Inventory, Kettel el al., (2022[92]), Better utilisation and transparency of bird data collected by powerline companies; (The Crown Estate, 2023[93]), Marine Data Exchange; Underwood et al. (2018[94]), The use of biodiversity data in spatial planning and impact assessment in Europe;. (NYSERD, 2021[95])Wildlife Data Standardization and Sharing: Environmental Data Transparency for New York State Offshore Wind Energy.
5.1.5. Due diligence and responsible business conduct requirements
Responsible Business Conduct (RBC) due diligence is a process for financial and non-financial companies to identify, prevent, mitigate and account for their actual and potential adverse impacts on the environment (including biodiversity) and other RBC issues (e.g. human rights, labour rights, bribery and corruption) (OECD, 2018[96]). These impacts may arise in a company’s own operations, supply chain and other business relationships. Owing to the potential adverse impacts of renewable power on nature and people, adopting a robust risk-based due diligence approach is good practice for renewable energy companies. The above-mentioned instruments, EIAs and SEAs, can be fully integrated as part of an RBC due diligence process to identify potential risks and impacts on biodiversity of renewable power infrastructure projects (step 2 of the due diligence process). More specifically, integration of RBC-related due diligence in the context of project and asset finance can help investors, including development finance institutions, in identifying, preventing and mitigating biodiversity-related risks in the project and asset they finance, including in renewable energy infrastructure projects. To that end, the OECD published recommendations on how to conduct RBC due diligence in the context of project and asset finance transaction, creating baseline expectations amongst other international standards such as the IFC Performance Standards and Equator Principles (Box 5.9) (OECD, 2022[97]).
While due diligence and responsible business conduct is voluntary in most jurisdictions, an increasing number of governments are adopting laws requiring companies to undertake human rights and environmental due diligence. For example, France’s 2017 Duty of Vigilance Law requires large French companies to develop a due diligence plan to identify and prevent adverse impacts on the environment among other things, arising directly or indirectly from the operations of the company and companies it controls. Due diligence laws have since been adopted in Germany and Norway (2021), while the European Commission has adopted a proposal for a Directive on corporate sustainability due diligence (2022). Large renewable power companies fall under this legislation, whereas small and medium enterprises are excluded.
OECD’s Due Diligence Guidance for Responsible Business Conduct (OECD, 2018[96]) helps companies to understand and implement due diligence for RBC as foreseen in the OECD Guidelines for Multinational Enterprises (OECD, 2011[98]). The Guidance also seeks to promote a common understanding amongst governments and stakeholders on due diligence for RBC. Typically, a company considers risk to themselves (e.g., financial risk, market risk, operational risk, reputational risk), however the guidance takes an outward-facing approach to risk, referring to the likelihood of adverse impacts on people, the environment and society that enterprises cause.
IFC Performance Standards
The IFC Performance Standards provide guidance to IFC clients on how to identify risks and impacts. They are designed to help avoid, mitigate, and manage risks and impacts as a way of doing business in a sustainable way. In the case of its direct investments (including project and corporate finance provided through financial intermediaries), IFC requires its clients to apply the Performance Standards to manage environmental and social risks and impacts so that development opportunities are enhanced. Together, the eight Performance Standards (PS) establish standards that the client is to meet throughout the life of an investment by IFC.
PS 6: Biodiversity Conservation and Sustainable Management of Living Natural Resources has the following objectives: i) To protect and conserve biodiversity; ii) To maintain the benefits from ecosystem services; iii) To promote the sustainable management of living natural resources through the adoption of practices that integrate conservation needs and development priorities. The applicability of this PS is established during the environmental and social risks and impacts identification process. Based on the risks and impacts identification process, the requirements of PS6 are applied to projects i) located in modified, natural, and critical habitats; ii) that potentially impact on or are dependent on ecosystem services over which the client has direct management control or significant influence; or iii) that include the production of living natural resources. Notably, in areas of critical habitat, the client will not implement any project activities unless all of the following are demonstrated:
No other viable alternatives within the region exist for development of the project on modified or natural habitats that are not critical;
The project does not lead to measurable adverse impacts on those biodiversity values for which the critical habitat was designated, and on the ecological processes supporting those biodiversity values;
The project does not lead to a net reduction in the global and/or national/regional population of any Critically Endangered or Endangered species over a reasonable period of time;
A robust, appropriately designed, and long-term biodiversity monitoring and evaluation programme is integrated into the client’s management programme.
Equator Principles
The Equator Principles provide a common baseline and framework for financial institutions to identify, assess and manage environmental and social risks when financing projects. They apply globally to all industry sectors (including solar, wind and electricity network projects) and five finance instruments: 1) project finance advisory services; 2) project finance; 3) project-related corporate loans; 4) bridge loans; and 5) project-related refinance and acquisition finance. Currently, 137 financial institutions in 38 countries have voluntarily adopted the ten Equator Principles. By implementing the Equator Principles, negative impacts of projects on biodiversity and communities should be avoided where possible. Unavoidable negative impacts should be reduced, mitigated and/or compensated for. The Equator Principles draw on the International Finance Corporation’s (IFC) Environmental and Social Performance Standards.
Source: (IFC, 2012[99]), International Finance Corporation’s Environmental and Social Performance Standards (Equator Principles Limited, 2022[100]), The Equator Principles, https://equator-principles.com/about-the-equator-principles/.
The OECD Guidelines for MNEs (hereafter “Guidelines”) have a unique promotion and grievance mechanism – the National Contact Points (NCPs). Examples of the OECD’s Due Diligence Guidance grievance mechanism being employed for renewable energy and transmission infrastructure are outlined below:
In October 2012, the Swedish and Norwegian NCPs received a submission from the Sami reindeer herding collective in Jijnjevaerie Sami Village alleging that Statkraft AS, a Norwegian multinational business, had not observed the general policies, human rights, and environment provisions of the Guidelines by planning to build a wind power plant on reindeer herding ground in Sweden. The Sami reindeer herding contended that "meaningful engagement" had not taken place and requested that the NCPs mediate between the parties to reach a positive solution. Mediation took place but no agreement could be reached. The NCPs did not find any grounds for concluding that Statkraft had failed to comply with the OECD Guidelines. However, they identified areas for improvement. The NCPs recommended that the parties showed renewed will to negotiate an agreement on the further development of the wind power projects, their scope and extent and compensation schemes. The affected parties reached an agreement on their own following the conclusion of the NCP process (OECD, 2012[101]).
In December 2017, Stichting Hou Friesland Mooi (HFM) submitted a specific instance to the Dutch National Contact Point (NCP) concerning an alleged violation of the OECD Guidelines for Multinational Enterprises by Nuon Energy N.V. and/or Nuon Wind Development B.V. (Nuon). At the advice of the NCP a dialogue took place between the notifying party and company. During the second meeting on 31 August 2018, the parties reached agreement on several points, and indicated that the NCP dialogue had been useful in clarifying the points presented in the notification. The parties agreed that in the new phase of the project, consultation with the local community would begin anew and the parties would aim to restore confidence. On December 18, 2018, a final statement was published. The NCP concluded that there was a lack of clarity regarding Nuon’s role in relation to the provincial authority when concerned with the engagement of the project’s stakeholders, and that Nuon is obliged to comply with the provisions of the OECD Guidelines on its own initiative. Additionally, the NCP recommended that Nuon should communicate more clearly and publicly what its role is in relation to the provincial authority and local community. Finally, the NCP recommended that the parties continue their dialogue (OECD, 2017[102]).
Biodiversity-related economic instruments can provide continuous incentives to both producers and consumers to behave in more environmentally sustainable ways. By raising the cost of activities that harm or degrade biodiversity (e.g., taxes; biodiversity offsets) and rewarding activities that benefit biodiversity (e.g., subsidies; payments for ecosystem services), economic incentives encourage producers and consumers to behave more sustainably. Economic instruments used to mainstream biodiversity into renewable energy infrastructure development include biodiversity offsets and environmentally motivated subsidies.
5.2.1. Biodiversity offsets
Biodiversity offsets are measurable conservation outcomes that result from actions designed to compensate for significant, residual biodiversity loss resulting from development projects (OECD, 2016[103]). They aim to internalise the external costs of development by imposing a cost on the activities that cause biodiversity loss and are therefore based on the polluter pays approach. Offsetting is the last step in the mitigation hierarchy (see Chapter 3); offsets are intended to be implemented only after all reasonable steps have been taken to avoid and minimise biodiversity loss at the development site and restore on-site impacts. Effectively designed offsets within a mitigation hierarchy framework can be in instrumental in achieving objectives of “no net loss” or “net gain”.
Three key approaches exist for implementing a biodiversity offset (OECD, 2016[103]): one-off offsets, biobanking and in-lieu payments. One-off offsets are undertaken by the developer or by a third-party provider on their behalf. Biobanking involves a repository of offset credits, each which represent a quantified gain in biodiversity resulting from actions to restore, enhance, and preserve biodiversity. A biobank is established in anticipation of future development impacts and tends to provide offsets (credits) for multiple projects. Payments-in-lieu are a mechanism by which regulatory agencies levy fees on developers for their adverse impacts on biodiversity. The collected fees are then spent by government agencies or a third-party on compensatory biodiversity measures. The payment is typically based upon a reasonable cost estimate of the financial resources necessary to compensate for the biodiversity loss. Each approach has its advantages and disadvantages (Table 5.2).
Two main types of biodiversity offset measures exist: restorative measures and averted loss measures (IFC, 2012[105]). Restorative measures aim to benefit biodiversity by improving the state of habitats or ecosystems outside the project area that have been previously damaged. Averted loss measures aim to reduce pressures on existing biodiversity at an area demonstrated to be under threat of imminent or projected loss. A combination of the two may be required to effectively offset the impacts of some renewable energy projects (see Table 5.3 for renewable energy related examples).
Governments can mandate the use biodiversity offsets as part of project permitting or provide legislation that facilitates the use of voluntary biodiversity offsets. At least thirty-seven countries require biodiversity offsets for infrastructure projects in some contexts3 (IUCN, TBC and DICE, 2021[106]). Subnational governments have also developed legislation or programmes for biodiversity offsetting specific for infrastructure. For example, New South Wales, Australia, has developed an offset policy for state significant development and infrastructure, which has triggered offsets for solar (e.g., AG Nyngan Solar Park) and wind (e.g., Rye Park Wind Farm) projects. The Scottish Borders Council, Scotland, has developed a biodiversity offsetting programme specifically to offset the impacts of wind energy (Butterworth et al., 2019[107]).
In addition to government policy, biodiversity offsets may be triggered through lending requirements of international financial institutions, such as the International Finance Corporation or implemented voluntarily by developers for example to achieve internal corporate commitments of no net loss or net positive gain. Documented examples of offsets applied to solar and wind exist in several geographic, political and environmental contexts:
Apennine Wind Farms, Italy: Offset measures were adopted to compensate for the impacts of two wind farms in the province of Macerata, Apennine Mountains. The Biological Territorial Capacity (BTC) indices and ecological energy balance considerations were used to determine residual negative impacts on priority grassland habitat, bats, raptors, and other important bird species. The energy requirements of raptors and the effect of habitat loss due to the wind farms on the raptors’ prey sources were used to calculate the area of habitat and associated prey needed to compensate for that loss. Unused and degraded agriculture areas within the Natura 2000 site were then restored to compensate for loss of grassland habitat, human hunting was excluded from an area commensurate with that lost to raptors through the development, and an existing electricity transmission line was buried to reduce risk of bird collisions. Where predictions of impacts were uncertain, relatively larger compensation measures were taken (BBOP, 2009[108]).
Broken Hill Solar Plant, New South Wales, Australia: A permitting condition for the Broken Hill Solar Plant in New South Wales, Australia, was to develop an Offset Management Package (ngh environmental, 2013[109]). A biodiversity offset management plan was developed for a site located 1.5 km from the development site. The objectives of the plan were to provide a “like for like” offset regarding vegetation types and threatened species habitats, ensure consistency with the Principles for the Use of Biodiversity Offsets in NSW4 and achieve a net improvement in biodiversity values within the offset site sustained in the long-term. Approximately 150 hectares of vegetation was required to be cleared for the development, covering four vegetation types, including near threatened Black Bluebush and Mulga Woodland. Following desktop research and field surveys, an offset site of 159 hectares was identified at 1.5 km from the development site. Overall, the proposed offset presented a 1:1.1 area impacted to area offset ratio, with a 1:1.3 ratio for Black Bluebush low open shrubland, which was the main vegetation type to be impacted and considered ‘near threatened’. Measures included weed control, feral cat and rabbit control, exclusion of feral goats, implementation of controlled burns to reintroduce a more natural fire regime and assisted recovery of degraded areas. Consistent with the Conditions of Approval, a biodiversity offset monitoring plan was developed and results reported annually to the NSW Office of Environment and Heritage (Tebb, 2018[110]).
The Kipeto Wind Power Project, Kenya: The proposed wind farm of 100 MW comprises 60 wind farms. It is near nesting colonies of two Critically Endangered vulture species: Rüppell’s vulture (G. rueppelli) and white-backed vulture (G. africanus). Both species regularly fly over the wind farm, but this issue was identified too late in the planning process to avoid impacts through re-siting (Bennun et al., 2021[80]). Instead, on-site monitoring was conducted to help quantify the risks to vultures. Minimisation and offset measures were then developed with an aim of achieving net gain for both species in line with IFC Performance Standard 6. Minimisation measures included rapid detection and removal of carcasses from the site to avoid attracting vultures, and observer-led shut-down-on-demand when birds at risk are spotted. The biodiversity offset for the project includes several measures to address human-wildlife conflict with an objective of reducing retaliatory poisoning of wildlife, which can be lethal to the vultures that feed on the carcasses of poisoned animals. Offset activities are implemented by a partnership of four conservation NGOs and the Kenya Wildlife Service and overseen by a multi-stakeholder Biodiversity Committee (Bennun et al., 2021[80]).
The Falkenhöhe wind farm project in the Black Forest: The project conducted an impact study (UVPBericht), a specific study on the mitigation of impacts (Eingriffsregelung) for biodiversity in general (Landschaftspflegerischer Begleitplan) and a study specific to protected species (spezielle artenschutzrechtliche Prüfung) (Bas and Dieckhoff, 2021[111]). The studies, carried out prior to the authorisation of the project, mention compensatory measures that need to be taken on and off-site. Compensatory measures carried out on the project site included planting trees of local species and restoration of soil functions. Offset measures included improving the habitat for different species (e.g., capercaillie, greater murin) over 24 ha of forest located 8 km from the wind farm, installing 40 bat nest boxes and improving the honey buzzard feeding habitat. According to the regulation of protected species, the offset measures were to be conducted prior to project impacts occurring, be ecologically equivalent and functionally close to the impacted site. The biodiversity loss and gains were quantified using the “eco-points” system, which is a grading system that includes functionally descriptive indicators, i.e. succession stage, degree of nativeness, structural richness, diversity of species and normative indicators (including rarity of habitat, rarity of species, sensitivity and unfavourable tendency of endangerment) (OECD, 2016[103]). These indicators are used to classify land use and habitat types into 11 categories. Each category is further divided into sub-classifications, to which a certain number of eco-points are assigned per square metre. The benefits of the planned offset measures (i.e. eco-point gains) are expected to be greater than the negative impacts of the project (i.e. eco-point losses) (Bas and Dieckhoff, 2021[111]).
Marine offsets appear to be largely absent for renewable power developments (Vaissière et al., 2014[112]; 2021[113]), but could become increasingly relevant as fixed and floating offshore wind expands. However, policy and practice for marine biodiversity offsets in general is significantly less developed than for terrestrial biodiversity offsets. An analysis of marine biodiversity offset policy identified six countries with policy frameworks for marine biodiversity offsets (Australia, Canada, Colombia, France, Germany and US) and identified seven countries where marine biodiversity principles were being applied outside public policy frameworks (Niner et al., 2017[114]).5 Another analysis indicated that almost 80 countries have policies that would allow offsetting of marine impacts (Shumway et al., 2018[115]). In practice, marine offsets are seldom conducted (Bull and Strange, 2018[116]) and their efficacy is scarce and patchy (Jacob et al., 2020[117]).
Several challenges for biodiversity offsetting are specific to – or accentuated – in the marine context. These include biophysical challenges (e.g. greater connectivity of marine areas, lower likelihood of restoration success, data paucity) and social or governance issues (e.g. lack of private ownership and greater probability of leakage) (Shumway et al., 2018[115]; Niner et al., 2021[113]). Priorities for further exploring and developing offset approaches in the marine environment include (Jacob et al., 2020[117]; Vaissière et al., 2014[112]; Hooper, Austen and Lannin, 2021[118]): improving marine data; applying EIA thoroughly, including assessment of cumulative impacts of energy development; developing appropriate metrics for offsetting; strengthening understanding of ecological restoration techniques for marine ecosystems; and adjusting policy and planning frameworks. Spatial conservation planning could allow offsets to be pooled at appropriate scales (e.g. regional scale), rather than siloed, project-by-project approaches, which could deliver greater biodiversity benefits (Jacob et al., 2020[117]; Hooper, Austen and Lannin, 2021[118]; Croll et al., 2022[119]).
Biodiversity offsets remain contentious (May, Hobbs and Valentine, 2017[120]), but their effectiveness heavily depends on how they are designed and applied (see Box 5.10). For example, offsets can be counterproductive if the mitigation hierarchy is not respected (Maron et al., 2015[121]; Primmer et al., 2019[122]). However, only 10 of 37 countries where offsetting is mandatory require robust application of the mitigation hierarchy (IUCN, TBC and DICE, 2021[106]).6 Strengthening regulations on mitigation hierarchy and ensuring compliance with regulations is an important step, which could be usefully accompanied by the development or dissemination of guidelines on implementing the mitigation hierarchy (see e.g. (CSBI, 2015[123])).
Thresholds and coverage
Biodiversity offsets will not always be able to deliver equivalent outcomes because biodiversity may be of exceptional high value, irreplaceable or vulnerable. Establishing thresholds for what can and cannot be offset is therefore key. Coverage refers to the type of biodiversity intended to be addressed (e.g., habitats, species, ecosystem services) and the sectors that are included in the programme (e.g., mining, wind power, property development, agriculture).
Equivalence
As no two sites are ecologically identical, designing offsets requires assessment of how to achieve biodiversity benefits at the offset site that are ecologically equivalent to losses at the impact site. This is known as “like-for-like”. Determining ecological equivalence necessitates a comparison of the biodiversity loss and offset sites in three dimensions: biodiversity type, location and time. Some stakeholders may opt for trading up with offsets, known as “like-for-better”, by targeting different biodiversity features of higher priority than those impacted.
Additionality
The biodiversity improvements at offset sites should provide new contributions to biodiversity conservation over and above the existing levels. A reference scenario is therefore needed. Biodiversity offsets variously consider protection, restoration, recreation and enhancement measures as additional.
Permanence
Biodiversity offsets should deliver conservation outcomes for at least as long as the biodiversity loss persists at the development site. Land tenure, financial sustainability and appropriate incentives for land management are important components of delivering permanent outcomes.
Monitoring, reporting and verification
Robust MRV methodologies that can assess progress toward an offset’s objectives are critical. This includes adequate documentation of management plans, regular monitoring including on-site checks, clear and transparent reporting, and verification by a third party.
Compliance and enforcement
MRV frameworks must be supported by appropriate compliance and enforcement measures to create the incentives necessary for offset suppliers to deliver conservation outcomes over time.
Transaction costs
Transaction costs in offset programmes include costs associated with identifying, creating and securing an offset, applying for development permission, and undertaking MRV and enforcement. Reducing these administrative and time costs will increase the efficiency of an offset programme. Biobanks, for example, reduce the search costs of finding appropriate offset sites for developers.
Source: (OECD, 2016[103]), Biodiversity Offsets: Effective Design and Implementation, OECD Publishing, Paris https://dx.doi.org/10.1787/9789264222519-en.
Onshore and offshore renewable power developments may lend themselves to specific offsetting approaches. For example, as developments are often concentrated in areas of high resource potential (e.g., wind in Gulf of Suez; solar in Mojave Desert, California) potentially affecting similar habitats, aggregated offsets whereby developers pool resources into a joint intervention could reduce transaction costs and improve the effectiveness of offsets (provided there is adequate coordination and governance). While there is limited experience in aggregated offsets, they may become increasingly attractive as countries establish regulatory schemes requiring developers to contribute to specific quantitative conservation targets (Bennun et al., 2021[80]).
Another issue is how to offset the impact on migratory birds, bats and marine life. Impacts on these taxa are common and often the most significant impact from wind energy facilities. Generally, offsets take place in the same jurisdiction as the impacts and are expected to be geographically close. However, for migratory birds, bats and marine life, little benefit may come from trying to offset impacts near the development. The most ecologically appropriate site for offsetting the impacts may be in other countries, for example, at breeding sites or over-wintering grounds. (Bennun et al., 2021[80]) suggest that an international offsetting mechanism could play a role in addressing this issue (e.g., under the CMS).
A variety of biodiversity offsetting tools and metrics have been developed over the past two decades (see (OECD, 2016[103]) for examples). These continue to evolve and are being supplemented by new approaches, some of which have been developed specifically with renewable power development in mind e.g.
Avian-Impact Offset Method (AIOM) (Shaffer, Loesch and Buhl, 2019[124]): the AIOM was developed by scientists from Northern Prairie Wildlife Research Center and the US Fish and Wildlife Service to quantify the amount of habitat needed to provide equivalent biological value for birds displaced by energy infrastructure in the US. The method is based on five metrics: impact distance, impact area, pre-impact density, percent displacement, and offset density. The authors calculated percent displacement values for breeding waterfowl and grassland birds. This assessment tool is accompanied by other tools including a geospatial decision support tool that identifies habitats for mitigation fulfilment and forecasts mitigation costs of proposed developments.
Offset siting support tool for the DRECP (Kreitler et al., 2015[125]): this tool was developed specifically for the area under the Desert Renewable Energy Conservation Plan (DRECP) of California but could be adapted for other offset analyses. Based on the hypothetical impacts from 15 331 ha of solar development in the Western Mojave Desert, the authors applied the tool to compare two offset scenarios. The first scenario prioritised offsets according to impacted features, while the second scenario prioritised offsets to maximize regional biodiversity conservation gains. The two methods only agree on 28% of their prioritized sites and differ in meeting species-specific offset goals. Differences between the two scenarios highlight the importance of clearly specifying choices and priorities for offset siting and mitigation in general.
5.2.2. Government support (e.g., grants and subsidies)
Governments can support biodiversity-aligned deployment of renewable power through grants and subsidies. These could be administered nationally, sub-nationally or internationally (e.g., through official development assistance – see Chapter 4). Government support can be used to 1) enhance knowledge and evidence of renewable energy impacts; 2) promote research, development and demonstration of technologies, decision-support tools and practices for addressing biodiversity impacts of renewable energy developments; and 3) incentivise renewable power companies and utilities to seek positive outcomes for biodiversity above and beyond regulatory requirements. Each of these areas is discussed below and supported by examples.
Enhancing knowledge and evidence of renewable energy impacts
Gaps in data and knowledge of renewable energy impacts on biodiversity remain (see Chapter 3). The evidence differs across technologies (i.e., solar, offshore wind, onshore wind), taxa (e.g., avian impacts are relatively well-studied), ecosystems (e.g., relatively few studies on impacts in marine and forest ecosystems), and geographies (e.g., the evidence base is relatively strong for offshore wind in North Sea compared to Mediterranean). In addition to promoting systematic collection of data from pre-construction biodiversity surveys and post-construction monitoring, governments have a role in promoting targeted research to address knowledge and evidence gaps through grants and by co-ordinating research initiatives. Examples include:
Deploying Solar with Wildlife and Ecosystem Services Benefits (SolWEB): Through the SolWEB programme, the U.S. Department of Energy is providing USD 14 million to fund research on how solar energy interacts with wildlife and ecosystems. Approximately USD 8 million has been granted to projects focussing on solar-wildlife interaction with projects ranging from quantification of insect biodiversity and pollinator communities at solar facilities through to evaluation of the response of pronghorn and other mammals to utility-scale solar facilities. Approximately USD 5 million has been granted to projects addressing ecosystem services, including the development of a tool to assess ecosystem service benefits provided by utility-scale solar facilities and the development of a national soil data collection system at solar facilities to enable soil health and ecosystem services assessments. The SolWEB projects are part of the D.O.E.’s approximately USD 100 million research portfolio on renewable energy and biodiversity interactions (US DOE, n.d.[126]).
Enabling Coexistence Options for Wind Energy and Wildlife (ECO Wind): The US National Renewable Energy Laboratory (NREL) has awarded USD 1.1 million to three industry teams to support research on bats and wind energy projects. Wind turbines are a leading cause of bat mortality, but relatively little is understood about how bats interact with wind turbines. The awardees include Bowman and Wildlife Imaging Systems, who will investigate how bats behave around wind turbines in different environments to understand whether they behave differently in different geographic regions; Electric Power Research institute who will investigate whether bats prefer calmer air directly behind wind turbines or turbulent air surrounding them to determine whether better understanding airflow around turbines can help deter bats from approaching them; Stantec Consulting Services will assess where and how bats use airspace near the rotor-swept area to assess differences between technologies, specifically acoustic detectors and cameras, to monitor bats and determine the factors that influence the different species’ behaviours.
Promoting RDD for biodiversity-aligned renewable energy development
Through grants, governments can promote research, development and demonstration of technologies, decision-support tools and good practices for reducing harmful biodiversity impacts or promoting positive impacts from renewable power infrastructure. Technologies could include low-risk sources of renewable power or mitigation technologies for existing renewable power sources such as AI bird-identification technology to support shutdown-on-demand of wind turbines. While the focus here is on grants, to optimise innovation governments will need to ensure the broader enabling environment facilitates and promotes biodiversity-aligned innovations. This entails, for example, well-aligned competition, trade and investment policies coupled with strong environmental policy that encourage developers to find low-cost solutions to address biodiversity impacts from renewable energy. Examples of grant or subsidy schemes for promoting RDD for biodiversity-aligned renewable energy include:
Offshore Renewable Impacts on Ecosystem Services (ORIES): UK Research and Innovation (UKRI), a non-departmental public body sponsored by the Department for Business, Energy and Industrial Strategy (BEIS), has awarded Plymouth Marine Laboratory with an approximately GBP 300 000 (~ USD 363 000) grant to fund the development of a decision-support tool for marine wind energy. The tool, ORIES, aims to help stakeholders to understand the impacts of planned offshore wind installations on marine biodiversity and ecosystem services. ORIES is intended to be operational and publicly available in 2023. UKRI’s grant has been complemented by funding from Plymouth Marine Laboratory (~GBP 75 000) and a donation from the Garfield Weston Foundation (GBP 40 000) (PLM, 2022[127]).
Examples to Accommodate Biodiversity in Nordic Offshore Wind Projects: Nordic Energy Research, acting on behalf of the Nordic Committee of Senior Officials for Energy Policies, invited all interested parties to submit an offer for a tender for “Examples to Accommodate Biodiversity in Nordic Offshore Wind Projects”. The aim of the tender is two-fold: 1) identify good examples of coexistence between offshore wind projects and biodiversity in the Nordic region and neighbouring countries; and 2) assess the feasibility of mitigation measures in a Nordic context, from practical, technical, economic and ecological perspective (Nordic Energy Research, 2021[128]).
Incentivising adoption of biodiversity-friendly practices in construction and operation of renewable energy facilities
While strong regulatory instruments are essential for safeguarding biodiversity in renewable power developments, governments can encourage developers to seek positive outcomes for biodiversity through subsidies. Subsides are still used in many countries to support the deployment of renewable energy (although there is discussion of whether these should be phased out now that renewables are increasingly cost-competitive) (Held et al., 2019[129]; Melliger and Chappin, 2022[130]). These subsidies can be tailored to reflect biodiversity considerations or be complemented by subsidies that incentivise measures to enhance biodiversity outcomes. If well-designed and targeted, subsidies could help deliver on biodiversity and climate objectives (OECD, 2021[131]), and facilitate innovation (Criscuolo et al., 2022[132]). To ensure efficient use of resources, it will be important to evaluate the effectiveness of subsidies over time to ensure they do not become counter-productive, redundant or market-distortive. Ecosystem valuation could help inform the appropriate volume of the incentive to efficiently internalise the ecosystem service benefits (Siegner et al., 2019[133]). Examples of biodiversity-relevant subsidies for renewable power include:
Solar Massachusetts Renewable Target (SMART) programme: In Massachusetts, US, the Solar Massachusetts Renewable Target (SMART) programme promotes solar development by providing tariff-based incentives to operators of eligible solar arrays. The volume of support provided by the government depends on the category of land proposed for projects and other factors. Solar development in areas designated as brownfields, eligible landfills, and “previously developed areas”7 receive higher payment rates than those in greenfields. Developments in lands designated as “Priority Habitat,” “Core Habitat” or “Critical Natural Landscape,” as defined in the statute are ineligible. Additionally, the Massachusetts Department of Energy Resources recently proposed a USD 0.0025/kWh rate adder for solar developments that meet the pollinator-friendly standard established by the University of Massachusetts (Commonwealth of Massachusetts, 2020[134]).
Roof-mounted solar subsidies, India: While not explicitly targeting biodiversity, subsidies for solar panels on rooftops could benefit biodiversity as solar panels installed on existing infrastructure reduce the need for ground-mounted power facilities which are more land-use intensive and have higher risks to biodiversity (Kim et al., 2021[135]). India is one example of a country with subsidies for roof-mounted solar (India, 2023[136]). Depending on the state, subsidies amount to 30% or 70% of installation costs.
Information instruments and voluntary approaches form an important complement to regulatory and economic measures. These include biodiversity-explicit power procurement, industry guidelines, and environmental labelling or ecolabelling, each of which is discussed below. Other examples include voluntary corporate commitments (see examples in 5.1.1 and 5.2.1) and investor performance standards (see Box 5.9). Some instruments (e.g., guidelines) serve to facilitate the implementation of regulatory and economic instruments, while others help to fill a gap in regulation or to drive and reward environmental performance that goes above and beyond regulation (e.g., ecolabels). Several biodiversity-relevant information instruments and voluntary approaches are emerging as the renewable energy sector develops. Opportunities exist for scaling these approaches.
5.3.1. Biodiversity-explicit procurement policies, tender processes and power purchase agreements
Through electricity procurement decisions, governments and other electricity off-takers can promote and support the development of renewable power projects that deliver positive outcomes for biodiversity. This can be achieved by incorporating biodiversity considerations in tendering processes and power purchase agreements (PPAs). PPAs are the contracts governing the sale and purchase of electricity. Through PPAs, electricity sellers (e.g., privately-owned power producers) and buyers (e.g., a state-owned electricity utility or private electricity provider) agree on several criteria such as the amount, timing and cost of energy supply, payment terms, penalties and how much electricity is to be sourced from renewables. Buyers could take a more holistic view to “green” energy, requiring electricity producers to demonstrate their commitment not only to renewables, but also their commitment to biodiversity protection.
Biodiversity can be integrated into tendering and power purchase agreements in various ways. For example, biodiversity benefits can be a consideration or explicit criterium for evaluating proposals from competing renewable power producers or operators. Alternatively, attainment of a biodiversity standard or application of a specific practice can be a prerequisite for a proposal to be considered. These approaches are demonstrated in the examples below. The first five examples cover public or private electricity suppliers serving end-users (Netherlands, France, Clean Power Alliance, MCE and Excel Energy), while the sixth example is of a corporate end-user (Salesforce).
Hollandse Kust West Wind Farm Zone (HKWWFZ) is located approximately 28.6 nautical miles (53 kilometres) off the west coast of the Netherlands. Two wind farm sites are designated within the HKWWFZ: HKW Wind Farm Site VI and VII. The Dutch Government issued tenders for the permits to develop the sites. Applications were assessed on non-price criteria in addition to price criteria. For Site VI, applications were assessed on four criteria: 1) amount of financial offer; 2) certainty of wind farm being completed; 3) contribution to energy supply; and 4) contribution to the ecology of the North Sea. Notably, the biodiversity-specific fourth criteria accounted for 50% of the total points available and was therefore decisive. The criterion was split into two: 1) Stimulation of investments to benefit naturally occurring biodiversity (species, populations, and habitats) in the Dutch North Sea and 2) Stimulation of innovation and development of solutions to benefit naturally occurring biodiversity in the Dutch North Sea from the wind farm at Site VI and future Dutch offshore wind farms (RVO, 2019[137]).
In France, developers of land-based solar energy projects compete to supply electricity to the national grid. Biodiversity-relevant factors are considered in the tendering process both as a prerequisite for a proposal to be considered and as criteria against which a proposal is scored. To compete, projects must first meet local criteria. For example, facilities not located within an urban plan must have the favourable opinion from the departmental commission regarding the preservation of natural, agricultural and forest areas. In natural areas, sites cannot be in wetlands. Once this prerequisite is met, projects are evaluated against a set of criteria with a total of 100 points available. Nine points focus on the environment. If the area of installation is degraded (e.g., a former industrial site, polluted site or waste area), the project receives the full nine points; otherwise, the project receives zero of these points (France, 2021[138]). For offshore wind developments, tenders are scored based on the budget they allocate to environmental measurement and a biodiversity fund. Tenders for a 1 GWh project receive a maximum score if they allocate at least EUR 75 million.
Clean Power Alliance (CPA) is an electricity provider serving South California. It is California’s largest local community choice aggregator8 (Clean Power Alliance, 2022[139]). In 2018, CPA adopted an Environmental Stewardship Principle, committing to provide customers with energy that delivers multiple benefits for nature, air and water. To fulfil this commitment, environmental stewardship is one of six key evaluation criteria used by CPA to assess proposals for renewable energy and storage power purchase agreements. Biodiversity data and information provided by environmental NGOs were used to develop qualitative assessment questions and a qualitative evaluation framework for ranking projects according to environmental stewardship (CPA, 2022[140]; Hughes, 2020[141]).
MCE is a community choice aggregator operating in 37 communities across four counties in California, US. Since 2020, the electricity provider requires all new ground-mounted solar project partners to plant pollinator-friendly ground cover throughout the facility. In addition, developers must submit a pollinator-friendly solar scorecard within 30 days of the Commercial Operation Date, within two years of Commercial Operation when installation of pollinator habitat must be completed, and then after five, ten and fifteen years of Commercial Operation. The requirement applies to both their Feed-in Tariff programme and power purchase agreements. Additionally, MCE encourages specific solar array design elements to be considered to support pollinator-friendly habitats and reduce maintenance costs. The pollinator-friendly solar scorecard allows points to be awarded for positive planned actions (e.g., planned % of site dominated by native plant species cover) and subtracted for harmful planned actions (e.g., pesticide application).
Xcel Energy, a utility serving eight states in the United States, plans to add at least 3 000 MW of solar generation by 2030 (Xcel Energy, 2019[142]). In 2018, they announced plans to require all future solar project proposals to disclose information on what type of vegetation will be planted. To facilitate disclosure of this information, developers are required to complete a pollinator habitat scorecard, which was developed by the State of Minnesota. While achievement of the voluntary “pollinator friendly” standard is not a prerequisite, the habitat scorecard enables the criteria to be factored into Excel Energy’s decision and signals to developers the importance of ensuring solar facilities are nature-friendly (Act4Nature, 2021[143]; Morehouse, 2018[144]).
In 2013, Salesforce made a public commitment to reach 100% renewable energy. This involves purchasing renewable energy and certificates equivalent to the amount of power used in their global operations. Salesforce procures renewable energy by evaluating each project against a set of environmental, social and economic attributes collated in a renewable energy project matrix (Lorenzen and Scher, 2018[145]). The attributes cover, among other things, “land use and habitat”, and “wildlife”. Information gathered during the Request for Proposal process is used to evaluate projects and guide the selection process. For the land use and habitat attribute, points differ depending on the habitat within which the project is sited, ranging from one point for projects sited in natural habitat or prime farmland to five points for projects in built environment (parking lots, brownfields, and rooftops). Owing to the high biodiversity values of critical habitat, Salesforce does not accept projects located in these areas. For the wildlife attribute, points range from one to five, with full points given to projects that go above and beyond standard industry best management practices or voluntarily offset impacts offsite. Projects that fail to assess impacts or respect wildlife regulations are excluded. The project evaluation matrix is accompanied by guidance on how to deliver on the attributes.
As demonstrated by these examples, integrating biodiversity into PPA and tendering processes could be used to demand increasingly higher standards for biodiversity in renewable power projects, requiring companies to go beyond regulation to be competitive. It could also help drive innovation. As with other instruments, ongoing monitoring will be necessary to ensure effective implementation of the criteria as well as penalties to dissuade non-compliance.
Beyond the biodiversity-benefits, integrating biodiversity into tendering processes and PPA could have the added benefit of electricity producers considering the costs of biodiversity management in their tariffs. Financing for a renewable power projects is often secured after a PPA has been signed, which means the environmental policies – and the additional costs of implementing them – are not considered in the PPA and therefore must be subsequently addressed as an add-on cost instead (Hulka and Conzo, 2021[146]).
5.3.2. Industry guidelines on biodiversity and renewable power infrastructure
Voluntary industry guidelines can facilitate mainstreaming of biodiversity in renewable power development. They can achieve this by clearly communicating relevant regulations, providing a framework for evaluating and addressing biodiversity impacts, and presenting good practices and tools for mitigating negative impacts and promoting positive impacts. In addition to improving biodiversity outcomes, adherence to guidelines could help developers reduce the risks of project delays, biodiversity-related liability and penalties.
Industry guidelines on renewable power and biodiversity have been developed by supranational, national and subnational government bodies, non-governmental organisations and advisory firms (Table 5.4), often with wide stakeholder engagement. Examples of industry guidelines produced or endorsed by governments are presented below.
The European Commission’s Guidance Document on Wind Energy Developments and EU Nature Legislation (European Commission, 2020[19]) aims to guide primarily developers, consultants and competent authorities on how best to ensure that wind energy developments are compatible with the EU Birds and Habitats Directives. The guidance covers the pre-construction, construction, operation and decommissioning or repowering phases. It outlines the legislative framework for renewable energy and nature in Europe, provides guidance on screening, assessment and strategic planning, discusses potential effects of wind energy on nature and outlines key considerations for monitoring and adaptive management. Similar guidance on energy transmission infrastructure and nature was published in 2018, targeting project developers, transmission system operators (TSOs) and competent authorities (European Commission, 2018[62]).
The US Fish and Wildlife Service Land-Based Wind Energy Guidelines (USWFS, 2012[147]) aim to: 1) Promote compliance with relevant wildlife laws and regulations; 2) Encourage scientifically rigorous survey, monitoring, assessment, and research designs proportionate to the risk to species of concern; 3) Produce potentially comparable data across the Nation; 4) Mitigate, including avoid, minimize, and compensate for potential adverse effects on species of concern and their habitats; and 5) Improve the ability to predict and resolve effects locally, regionally and nationally. The guidelines were developed in collaboration with a Wind Turbine Guidelines Advisory Committee, which included representatives from federal energy and wildlife agencies, state energy commissions and wildlife agencies, tribes, renewable power companies, conservation organisations, and academia. Adherence to the Guidelines is voluntary and does not absolve developers of their liability under the Migratory Bird Treaty Act, the Bald and Golden Eagle Protection Act and the Endangered Species Act. However, if developers are found to be in violation of these Acts, the US FSW and Office of Law Enforcement will consider a developer’s documented efforts to communicate with the US FWS and adhere to the Guidelines when considering prosecution. Those adhering to the Guidelines are considered to have taken reasonable and effective measures to avoid the “take” of protected species. Supplementary guidance – Eagle Conservation Plan Guidance – focussing on bald and golden eagle protection in wind energy development has also been produced by the USFWS (U.S. FWS, 2013[148]). Similar guidelines on solar power siting do not exist, however, some developers have applied the wind power guidelines to solar projects (TNC, 2022[149]).
The following factors could help ensure the wide uptake and effectiveness of voluntary guidelines. First, engaging a range of stakeholders, including biodiversity experts, industry associations, regulators and civil society groups in the design of the guidelines could help ensure their rigour and relevance. From an ecological perspective, it is critical that the guidelines are evidence-based and updated as evidence evolves. Second, engaging industry associations to disseminate and promote the guidelines throughout the sector and provide training on their application where needed (McKenney, 2020[150]). Third, encouraging public and private companies to report on the extent to which the guidelines have been applied, as part of voluntary or mandatory reporting processes. Fourth, making financial institutions aware of the guidelines and require developers to apply them to receive financing. In the US, for example, some financial institutions are aware that renewable energy developers may incur legal and financial risks related to violating existing laws protecting animals from injury or death. These financial institutions may look more favourably on financing proposals that incorporate USFWS guidelines in their development and operations plans (U.S., 2022[151]).9 Fifth, national level guidance could be translated at subnational level, to adapt to locally specific regulatory and environmental circumstances. For example, a few US states (e.g., Arizona, Nebraska, Wyoming), have provided state-level wind guidance based on the US Fish and Wildlife Service Land-Based Wind Energy Guidelines.
5.3.3. Environmental labelling and information schemes
Environmental labelling and information schemes (ELIS) refer to a broad set of policies and initiatives that provide information to external users about one or more aspects of the environmental performance of a product or service (Prag, Lyon and Russillo, 2016[155]). They may involve either business-to-business communication or business-to-consumer communication. ELIS can be mandatory (e.g., energy efficiency labels in Europe) or voluntary (Prag, Lyon and Russillo, 2016[155]). They can operate at an international, national or subnational level.
Until recently, ELIS in the power sector have focussed on communicating energy efficiency or renewable sourcing of energy. While biodiversity-explicit ELIS have existed for several decades [e.g., Forest Stewardship Council (est. 1992) and the Programme for the Endorsement of Forest Certification (est. 1999)], they are relatively new to the power sector. Examples of operational ELIS in the power sector that include biodiversity criteria are outlined below:
EKOenergy Ecolabel: The EKOenergy ecolabel is an internationally recognised non-for-profit ecolabel for renewable electricity that was established by a network of environmental NGOs. The purpose of the ecolabel is to help energy suppliers sell a recognisable and widely accepted product, increase the positive impact of renewable energy consumption and make it easier for consumers to navigate the energy market and communicate about their purchase. To attain the EKOenergy label, energy must be 100% renewable while also meeting additional environmental sustainability criteria established based on consultation with environmental NGOs, energy companies, consumers, consumer organisations and public authorities.
To protect biodiversity, wind and solar installations located in a) nature reserves designated by the authorities; b) Natura 2000 areas; c) Important Bird and Biodiversity Areas; d) UNESCO World Heritage Sites are only accepted if the EKOenergy Board approves them, after consultation with relevant stakeholders. For solar energy, this approval can be made if a management plan is implemented that covers elements such as a) fencing (avoiding habitat fragmentation and maximising access for animals); b) pesticide free management; c) measures to avoid land sealing; d) habitat management on the area between the panels and on the unbuilt parts of the sites; e) water management. EKOenergy’s Secretariat organises an annual audit to verify that sold/used EKOenergy-labelled volumes fulfil all the requirements listed in EKOenergy’s criteria. The audit is based on facts and figures that are certified or confirmed by public authorities and/or reliable third-party certification organisations (EKOenergy, 2021[156]).
The Blue Dot Network quality infrastructure certification: The Blue Dot Network is a certification for infrastructure projects that is being developed by Australia, Japan and the United States. It is largely derived from the G20 Principles for Quality Infrastructure Investment and other international standards such as the International Finance Corporation’s Performance Standards (IFC PS), the OECD Guidelines for Multinational Enterprises, and the OECD Recommendation on the Governance of Infrastructure, among others. It applies to infrastructure projects across all major sectors, including renewable energy, in both developed and developing economies. Blue Dot Network element 8 (there are 10 elements in total) Uphold international best practices for environmental and social safeguards, including respect for labour and human rights, incorporates criteria relating to biodiversity that reflect IFC PS 6. The certification is being piloted on projects around the world, including onshore and offshore wind farms.
Seal of Excellence in Sustainability (Sello de Excelencia Sostenibilidad): The Spanish Photovoltaic Union10 (UNEF) launched a solar PV sustainability certificate in 2021 and awarded its first certificate in December 2021 to Iberdrola’s Renovables’ Andévalo facility. Certification requires fulfilment of criteria in four areas: socio-economic impact, governance, environmental integration and biodiversity protection, and circular economy. The biodiversity criteria include siting the facility outside Natura 2000 Networks; conducting a cumulative impact assessment; using permeable fencing; putting in measures to promote biodiversity such as nesting sites, ponds and insect hotels; prevention of soil degradation and plantation of trees or planting of new trees where transplantation is not possible.
The certification process is divided into two phases. In the development phase, a preliminary certificate is issued based on the analysis of the project documentation provided by the client. In the second phase, after construction, the final certificate is issued once the on-site evaluation of the plant has been carried out and it is verified that the project has been developed based on the documentation previously provided. If the plant is already built, the documentary analysis and the on-site assessment is carried out at the same time. The certification process is audited by a third-party (UNEF, 2021[157]).
Minnesota Habitat Friendly Solar Programme: In Minnesota, the Board of Soil and Water Resources (BSWR) has launched a Habitat Friendly Solar Programme which provides technical guidance and assessment criteria (BSWR, 2020[158]). Although a voluntary scheme, Minnesota legislative requirements state that “an owner of a solar site implementing solar site management practices may claim that the site provides benefits to gamebirds, songbirds and pollinators only if the site adheres to guidance set forth by the pollinator plan provided by the Board of Water and Soil Resources” (Minnesota, 2021[159]). The legislation intends to prevent “greenwashing” or false environmental claims.
To meet the standard, projects must complete a Solar Site Pollinator Habitat Assessment scorecard and score 70 points or more. A gold standard is attained with >85 points. Projects must be inspected yearly to identify any management needs and a monitoring form must be completed. At the end of the third year of vegetation establishment for the project, and every three years afterwards, a qualified natural resource staff with plant ID knowledge must fill out an Established Project Assessment Form. Criteria include, for example, the percent of native plant cover and the diversity of plant cover (# of plant species with >1% cover). Points are subtracted for activities such as insecticide use (BSWR, 2020[158]). Preliminary evidence indicates the scheme may benefit flowering plants and insects (Lukens, 2021[160]). At least eight more states in the US (Illinois, Maryland, Massachusetts, Michigan, New York, North Carolina, South Carolina and Vermont) have since established voluntary pollinator-friendly certification programmes (Terry et al., 2020[161]; Dowling, 2020[162]).
As illustrated by these examples, ELIS can be developed and managed by public agencies, private companies and NGOs, either individually or in partnership. Governments can be involved in ELIS in various ways, including by (co-)developing or (co-)managing schemes, and endorsing or incentivising them (e.g., through subsidies, including beneficial tax status – see economic instruments).
The effectiveness of environmental labelling and information schemes may be influenced by various factors including the scientific-robustness and stringency of the criteria, the process for verifying and auditing attainment of criteria, and the enforcement measures in place to address non-compliance and dissuade false environmental claims (Klintman, 2016[163]; OECD, 2013[164]). As ELIS for biodiversity and renewable power develop, it would be beneficial to monitor and evaluate their effectiveness. Building adaptability into ELIS is good practice, so that standards and procedures can be revised and strengthened based on lessons learned and advances in scientific knowledge (OECD, 2013[164]).
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Notes
← 1. Examples can be found in the Netherlands and Denmark, among others. See Netherlands Enterprise Agency (2022), Dutch Offshore Wind Guide and Eclareon (2021), Technical support for RES policy development and implementation – Denmark.
← 2. Ninety countries submitted national reports.
← 3. It is unknown to what extent renewable energy is covered in these countries’ legislation.
← 4. An updated version of the principles is available here: https://www.environment.nsw.gov.au/topics/animals-and-plants/conservation-programs/nsw-biodiversity-offsets-policy-for-major-projects/principles-for-use-of-biodiversity-offsets-in-nsw
← 5. Not specific to renewable energy developments.
← 6. For a discussion of key design features for effective biodiversity offsets see (OECD, 2016[103]).
← 7. Defined as areas “with pre-existing paving, construction, or altered landscapes and does not include altered landscapes resulting from current agricultural use, forestry, or use as preserved natural area.”
← 8. Community choice aggregation policies enable local entities to aggregate electricity contracts within a specific jurisdiction to procure electricity as a group, rather than individuals.
← 9. The extent to which financial institutions systematically evaluate application of best practices is unknown.
← 10. The Spanish Photovoltaic Union (UNEF) was founded on May 16, 2012 after the merger of three national photovoltaic associations: the Photovoltaic Business Association (AEF), the Photovoltaic Section of the Association of Renewable Energy Producers (APPA Fotovoltaica) and the Photovoltaic Industry Association (ASIF).