Wood Mackenzie: 45 GW RE Auction Pipeline In Europe

Expect Europe To Auction 45 GW Renewable Energy Capacity In 2021 With 6 GW Of Solar PV, Says Wood Mackenzie; Expects More Than 30 GW To Be Actually Awarded

Wood Mackenzie: 45 GW RE Auction Pipeline In Europe

With the UK expected to lead European nations in renewable energy auction capacity of over 45 GW that Wood Mackenzie believes is likely to be tendered in 2021, the stature of renewables in the region is definitely growing. (Source: Wood Mackenzie)

  • Wood Mackenzie’s new report lists 5 trends to watch out for in the year 2021 for European power markets
  • Analysts see 45 GW of renewables capacity waiting to be auctioned this year and expect over 30 GW to be actually awarded
  • They warn policymakers to factor in flexibility issues with solar and wind power sources among other renewables to curb growing trend of negative power prices

In a new report titled European power markets: 5 things to look for in 2021 Wood Mackenzie analysts claim the continent has as much as 45 GW of renewable energy capacity to be auctioned in 2021, comprising 17 GW of wind and 6 GW of solar PV alone. Remaining capacity is either technology neutral or related source.

However, they aren’t too confident of targeted volumes being achieved going by the trend of previous auctions with an average award rate of 70%. Assuming the same scenario this year as well, it expects over 30 GW of capacity being awarded in 2021.

Th largest renewables capacity is anticipated to be auctioned in the UK as the country targets 12 GW under its Contract for Difference (CfD) round 4 auction (see 12 GW Renewables Capacity For UK’s CfD Round 4 Auction). It is followed by Spain where the country is expected to auction 8 GW, comprising its 5 GW annual target as well as the roll-over of a delayed 2020 auction capacity (see Spain To Launch RE Auction On Jan. 26, 2021).

Poland is likely to auction another 8 GW comprising onshore, offshore wind and solar PV capacity.

Wood Mackenzie analysts reflect that while renewable energy auctions will make clean energy more affordable and available, these continue to present a flexibility challenge to power systems pointing at ‘record negative day-ahead and intra-day power prices occurring in 2020 during periods of high non-dispatchable renewable generation and low demand’. They warn that the frequency of negative prices will increase.

“Overall, wider balancing and day-ahead markets, with more players and a diverse portfolio of resources – enabled by cross- border interconnection – should lead to increased price stability, lower volatility, and more affordable supplies for consumers. Or that’s the theory,” reads the report. “Quantifying these benefits to-date has been near impossible while the whole system is undergoing such radical transformation. And reduced volatility might not be great news for all parties, particularly those looking to capitalise on the opportunities created by wider market spreads.”

In a nutshell, the report lists 5 trends to watch out for in 2020:

  • Laying the foundations for EU Green Deal delivery
  • A record-breaking year for renewables auctions
  • The return of power demand
  • The supply balance begins to tighten
  • Power markets become more integrated

About The Author

Anu Bhambhani

Anu Bhambhani is the Senior News Editor of TaiyangNews

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