Renewable Energy Production in Europe is Driving Prices to End-users Down, Not Up

The Poles often get caught saying that Poland cannot afford renewable energy development like our rich neighbors. Like so many things in Poland, this is a sentiment locked in a time warp. The days of 30-50 Euro cent subsidies for renewable energy in Europe are over. In recent years, the actual cost of renewable energy has dropped dramatically and in some places it is already cheaper than conventional energy. See "Analyzing the True Cost of Renewable Energy,"  Mott's Blog, October 20, 2014.  That post details comparative costs of RES with other technologies, but is virtually outdated as are all published figures since the changes are happening so fast.

Now a new Bloomberg report notes that electricity and energy prices are falling in Europe in 2015-2016 due a a major part to wind and PV energy. German electricity indeed threatens Poland's producers as it is frequently cheaper and the cross-border connections are expanding.[1]

But to listen to Polish politicians, you would think the exact opposite is the case. We anxiously await the day when reality sets in on the Polish energy debate.

                          Photo: @EnergyforArawak

[1] The other frequent criticism is that renewable energy is intermittent. This is, of course, true. However, the PV production curve fairly closely follows the demand curve and is a major factor in smoothing the RES impact in Germany. Energy storage and "capacity markets" have both been used now to compensate for the variable RES impact. The proof is still in the prices: if the end-user is getting a good price, then the system seems to be working.


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