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Home News Power Sector News Renewable energy destabilizing power eco-systems

Renewable energy destabilizing power eco-systems

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RenewableRapid increase in the share of renewables has destabilized the wholesale electricity markets in Europe as it has in India. As a result, power coal-fired generators remain very unsettled and their low prices, sometimes below generation costs, challenge the health of power generators said Capgemini in its European Energy Markets Observatory report.

Generators in Europe are finding it hard as in India must therefore quickly adapt their business models to these new realities and accelerate digital transformation efforts focused on productivity, agility and innovation, in order to grow profitable revenue streams, finds the report.

As highlighted at COP21 in Paris, the urgent focus for world governments is to limit the rise in the planet's temperature to 2°C by reducing greenhouse gas emissions. The European Union has set a target of a 40% reduction in Greenhouse Gases by 2030, this has subsequently given rise to large investments into renewable energies. The increase of renewables in the electricity mix has caused electricity market destabilization. It raises a number of questions on alternative ways that could have been chosen, leading to the same results, but that might have mitigated the impact on utilities.

Perry Stoneman, global head of energy & utilities sector at Capgemini, said: "The rhythm of development of renewable energy has long been dictated by regional objectives, rather than where the investment was most needed to service infrastructure and consumers. We now need to maximize advances in technology to establish competitive storage, using batteries, for example, that can optimize the use of energy that is being produced."

During the past 12 months, the costs of renewable energies have continued to fall: onshore wind costs are becoming competitive, while offshore wind costs have fallen for the first time, reaching a lower threshold of €87/MWh. Additionally, a fall in the cost of photovoltaic solar installations is continuing, with a further drop of 20% expected in the next three years.

Since 2004, Europe has shown a willingness to research, develop and deploy these technologies with investments in renewables in Europe reaching €750 billion, accounting for a quarter of the total global investment, despite making up only 7% of the global population. This demonstrates the European determination to quickly deploy, in some cases too quickly, these technologies before they are competitive.

Source- ET

 

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