Competitive energy will come from clean energy investments, not market tampering

At the European Leaders Summit in Alden Biesen, European leaders and Heads of Government reiterated the need to accelerate the expansion of home-grown, competitive renewables. But some leaders also proposed potentially reviewing the electricity market design, just agreed in 2024.

Lower power prices are fundamentally driven by boosting the supply of clean electricity – with clear market-driven investment signals. The last thing Europe now needs is to undermine investment signals in clean energy. Reviewing the electricity market design would freeze investments in clean energy and only entrench Europe’s energy challenge: overreliance on expensive, unreliable, and volatile fossil fuel imports.

We have seen this before, politically driven market interventions in 2022 ground wind energy investments to a halt. Wind investments hit their lowest since 2009. Turbine orders nosedived by 47% year on year.

WindEurope CEO Tinne van der Straeten said:

“Right question, wrong answer. The European leaders rightly discussed how to reduce power prices to ensure Europe’s industrial competitiveness. They are right that this will require much more renewable electricity. But tampering with the EU market design is the wrong answer. The Summits in Antwerp & Alden Biesen were meant to mobilise investments and shore up competitiveness. It would be deeply ironic if they ended up freezing the clean energy investments Europe needs to stay competitive.

Europe has all the tools to stabilise energy prices and shield consumers from volatility. Together with the EU and national Governments we now need to agree on targeted measures to align electricity supply and industrial demand. And we must make greater use of Power Purchase Agreements and Contracts for Difference. They unlock investments by minimising capital costs, and give long-term visibility on electricity prices.”

Background:

At the Antwerp Summit this past Wednesday, European industry urged Governments to take immediate action to boost European industrial competitiveness, including by addressing high energy costs. The following informal European Leaders Summit in Alden Biesen addressed the topic. European Council Antonio Costa said in conclusion to the Alden Biesen gathering: “On electricity prices, the energy transition remains the best long-term strategy for Europe to achieve strategic autonomy and lower prices.”