Fighting climate change requires Europe to step up its efforts in decarbonising its energy system by 2050. This paper outlines how the investment framework should look like in the next decade to deliver the significant investments required to decarbonise Europe’s economy, while ensuring the price of wind energy decreases for consumers.
It concludes the following:
- Forward contracting of wind energy (auctions, visibility on volumes) is critical to maintain a competitive industrial base and deliver cost reduction;
- Revenue stabilisation mechanisms (CfD, FiP) must strike the right balance between investors’ need for certainty and lower costs for society;
- Diversification of revenue streams (GOs, PPAs, ancillary services) will help reducing further the price of wind energy;
- Long-term structural reform (carbon pricing, grid investments, overcapacity, electrification) need to be implemented to improve the efficiency of the power system;
- Merchant investments may already materialise in some Member States by 2020, where market conditions are favourable, but they are more the exception than the new normal,