More renewables, electrification and grid flexibility could significantly reduce electricity prices and solar curtailment in Europe, but according to trade body SolarPower Europe, the EU needs to set a target for increasing the use of renewables and flexibility.
In SolarPower Europe’s latest Mission Solar 2040 Europe’s flexibility revolution study, the trade body said new modelling shows that electrification and flexibility can slash average day-ahead energy prices by 25% by 2030, and by 33% by 2040, compared to 2023. At the same time, the solar capture prices — the price at which solar energy is sold — will be 71% greater in 2030 compared to the baseline, and 54% higher by 2040.
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The reduction in prices could help consumers and developers save costs. The report said €30 billion (US$32.19 billion) could be saved by 2030 per year, and the figure could increase to €160 billion by 2040 per year.
The report models three scenarios with increasing levels of solar PV and flexibility solutions, namely solar-as-usual (SAU), solar+flexibility (SF), and solar+flexibility+electrification (SFE). Compared to SAU, where a lack of flexibility solutions limits renewables integration with high solar curtailment and cannibalisation expected, the SFE scenario can reduce curtailment by 66% in 2030 and 49% in 2040. The SFE scenario indicates the use of flexibility solutions to improve system operations.
“We need a flexibility revolution, surrounding renewables with grids, storage and electrification. 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,” said Walburga Hemetsberger, CEO of SolarPower Europe.
SolarPower Europe added that solar capacity could exceed 1.2TW in 2030 and 2.4TW in 2040 by adding flexibility solutions to enable further PV deployment. These capacities can provide 32% and 39% of EU power demand respectively.
The report also suggests several policy recommendations to build a clean energy system based on renewables, flexibility, and electrification. First, political goals for renewables and clean flexibility for 2030 and 2040 can be set. SolarPower Europe said the current EU regulatory framework includes 2030 targets for renewables, but this must continue after 2030 and be complemented with parallel goals for grids and storage. At present, the absence of flexibility targets contributes to the slow progress in this area.
SolarPower Europe added that the EU needs to improve energy system planning and capacity assessment for system operators, regulators, and policymakers.
“As renewables grow at all voltage levels and electrification accelerates – offering new and high potential for flexibility – grid planning is more important than ever,” it said.
Moreover, the EU can develop local energy hubs and foster prosumers to boost decentralised flexibility, as it is “very important to deliver daily flexibility at the local level to manage local grid congestion”.
As of the end of 2023, the EU had an operating operating solar fleet of 269GW in 2023. By the end of the decade, the capacity is expected to increase to nearly 900GW.
Aside from the adoption of renewables and grid flexibility in the EU, SolarPower Europe also published a report last week, examining global solar capacity growth in 2023.
Global solar installations increased by 87% year-on-year last year as China continued to dominate growth. In its Global Market Outlook for Solar Power 2024-2028 report, SPE said a total of 447GW of new solar capacity was installed in 2023, up from 239GW in 2022, representing an 87% growth. Globally, the world’s total solar capacity increased to 1.6TW as of the end of 2023.
There are several factors that contributed to the growth in 2023, including a significant increase in global solar PV manufacturing capacities that greatly improved the availability of solar modules following the supply chain issues experienced during the Covid-19 pandemic.
