Green grid shift 'could slash Europe's power prices by a third'

Boosting renewables, electrification and flexibility would lower electricity prices for consumers by up to a third, lobbying group SolarPower Europe said pointing to a report.

New modelling showed that electrification and flexibility can slash average day-ahead energy prices by a quarter by 2030, and by a third by 2040, compared to 2023. Solar capture prices simultaneously will be 71% greater in 2030 compared to the baseline, and 54% higher by 2040, supporting the sustainable growth of solar project developers.

Electrifying the power system and giving it more flexibility would also bring system-wide cost savings of €20bn ($21bn) per year by 2030, and €160bn per year by 2040, the group’s report ‘Mission Solar 2040: Europe’s Flexibility Revolution’ found.

“We need a flexibility revolution, surrounding renewables with grids, storage and electrification,” SolarPower Europe CEO Walburga Hemetsberger said.

“The new political cycle is an opportunity to build the new energy transition agenda."

Renewables groups are worried that the incoming European Commission may be less keen on the EU’s Green Deal, or even water it down after climate-sceptic far-right parties were the biggest winner of the European elections earlier this month.

“We call on EU leaders to implement the existing electricity market regulation, set new targets for renewables and flexibility to 2040 and adopt an EU electrification action and investment plan as soon as possible,” Hemetsberger added.

Flexibility means that consumers of power generators can adjust how they feed electricity to the grid, or consume it in response to grid needs or renewables availability. A homeowner with a solar roof, for example, could choose to charge its electric car during midday hours, when PV is producing abundantly.

The report maps out three possible scenarios for the coming decades: solar-as-usual (SAU), solar + flexibility (SF) and solar + flexibility + electrification (SFE).

Compared to the basic SAU scenario, the most ambitious SFE scenario reduces curtailment – solar energy wasted – by 66% in 2030 and 49% in 2040, SolarPower Europe said.

The EU by the end of this decade could reach 1.2TW of solar power, much higher than the 750GW targeted, the group said, adding that by 2040, the EU could even host 2.4TW of solar capacity. That would meet 39% of the economic bloc’s power demand.

The report recommends the new EU Commission to set flexibility targets for 2030 and 2040, improve energy system modelling capacities, ensure the full implementation of agreed power market legislation which would unlock investment in flexibility, and adopt an EU-wide electrification action and investment plan.