L R AS Published on Monday 20 September 2021 - n° 374 - Categories:various sectors
Record high electricity prices should accelerate renewables
As demand for electricity rises with the economic recovery, electricity prices have soared in recent weeks across the continent
due to a combination of coal and gas prices, rising carbon prices and falling wind generation.
This week, the UK recorded record high electricity prices on the market. The wholesale market in Portugal and Spain reached a new average high of €172.78 per MWh on 15 September
"Most of the increase in electricity prices in Europe is due to the surge in fossil gas prices," according to Ember. EU-ETS emission allowances have reached new heights by doubling from €27.50 per tonne to €53 per tonne. Ember's study shows that electricity generation from existing fossil gas and coal-fired power plants in the major EU economies is now twice as expensive as that from new solar and wind power plants. The study was published in July. But the price of fossil fuels has risen steadily since then.
So the only way to avoid this price volatility is to accelerate the switch from fossil fuels to renewables. This has begun to be decided with the shift in the European Union's target to increase the share of renewables in the energy mix from 32% to 40% by 2030. Commission executive vice-president Frans Timmermans said recent electricity price rises show that the EU needs to accelerate the deployment of renewables. He added that the transition to renewables must be accelerated.
Spain will speed up the implementation of renewable energy. It will include 600 MW in its auction to be operational by summer 2022. At the same time, to prevent renewable energy companies from taking advantage of high electricity prices, the Spanish government will force them to pass on the gains they make to consumers by the end of March 2022. It has also reduced the tax on electricity from 5.1% to 0.5%, and will sell €900m worth of carbon emission permits in 2021.
The rise in electricity prices seen in Europe in recent months is also expected to result in an acceleration of power purchase agreement (PPA) transaction volumes. According to Pexapark, prices in ten-year PPA contracts have jumped by 8-9% across Europe, with a 17% increase in the UK
Completed power plants are therefore coming onto the market at the right time to take advantage of high transaction prices
High electricity prices are leading to fears of even higher prices this winter.
Renewables will amplify electricity price variations: thermal generation is steady, while RE depends on sun and wind. The more active these two sources are, the more prices will decrease. Conversely, when the sun does not shine and the wind does not blow, prices will soar. One solution is storage
PV Tech of 15 September 2021
Editor's note: Advocating the use of renewable energies is good, but isn't it too late? Europeans no longer have a PV industry worthy of the name. Most of the panels are imported from China, which can charge whatever price it wants. The concentration of industries in this country makes the world dependent on solar glass, silicon, transport by ship ... The Chinese will make the buyers pay the price they want, who have no other solution than to go through the will of the sellers.