Analysts at Wood Mackenzie predict that wind and solar power projects will dominate the European market by the end of the decade due to cost reductions and increased renewables deployment following government auctions.
A combination of pump storage, interconnectors, gas peakers and energy storage will therefore be needed to provide the necessary flexibility to manage the power system as it transitions away from fossil-fuel power plants towards increased use of variable renewable energy (VRE), they suggested.
The top five wind markets in Europe — Germany, Spain, the UK, France and Italy — are estimated to have 160GW of operational wind power by the end of 2022, according to the latest forecast by Windpower Intelligence, the research and intelligence arm of Windpower Monthly. This will be a 16.3% increase from the 137.6GW that was operational at the end of 2019.
By the 2030s, “energy storage is expected to become the winning flexible asset due to plummeting technology costs and VRE’s dominance”, Wood Mackenzie added. It predicts Europe's total storage capacity will grow nearly 30-fold between 2020 and 2040 — from 3GW to 89GW.
The analysts call on Europe’s policymakers to provide “the right signals for a high Capex renewables buildout”, alongside incentives and revenues for flexible services.
Under existing plans, the EU is currently expected to fall short of its target of 32% of its energy demand being supplied from renewable sources by 2030, according to a new report by non-governmental organisations Climate Action Network Europe and Zero.