IF European member states deliver their individual National Energy and Climate Plans, renewables will account for around 53% of power supply in 2030, according to new research by consultancy group Wood Mackenzie.
According to the agency, Europe is ‘on track to hit this target’, although the performance of individual countries is suspected to vary.
Continued growth in wind and solar power is seen to drive substantial decarbonisation of Europe’s electricity sector.
The transformation of European electricity is described as ‘already well underway’.
Annual power supply from wind and solar is said to exceed production from coal in Europe for the first time in 2019.
‘The future for Europe’s coal generators is bleak, with higher emissions cost, competitive gas and phase-out policies impacting the fuel’, Wood Mackenzie states.
In 2018, one third of European power was supplied from renewable sources.
Wind energy was the largest single low-carbon producer, accounting for around 12% of overall supply in the region.
Solar power accounted for 4% of supply.
Peter Osbaldstone, Wood Mackenzie Research Director, said: “Renewables are on track to account for most of Europe’s power supply within ten years and over 60% of the market by 2040.
“Despite the success of wind and solar, European governments, regulators and investors must continue to work hard towards climate-energy goals.”
European power markets look different today than they did a few years ago and coal’s rapid decline – hastened by low gas prices – is perhaps the most significant recent change.
Osbaldstone added: “Carbon-intensive sources of power will be ruled out by policy if they cannot be priced out by markets.”
Nuclear remains the region’s single largest source of power but will also decline as older reactors retire and very little new build is seen.
Gas’ contribution will rise as coal and nuclear fall, surpassing production from nuclear in the early-to-mid-2020s.
By this time, the combined supply from wind and solar will rival gas – with wind alone producing more electricity than gas by late in the decade.
According to Wood Mackenzie, the cost of flexible gas generators will remain relevant to power price formation, although European power prices will become increasingly volatile as the volume of variable supply mounts.
“The extent of power price fluctuation in Europe will depend on the mix and volume of renewables relative to demand on an hourly basis. The ability of energy storage to flatten this profile will be of increasing importance as the transition moves forward,” added Osbaldstone.
