Building a Renewable Future? – Schneider Electric’s European Renewable Energy Market Report 2024 is released

Szerző: | okt 10, 2024 | Blog, Energia, Európa, Foreign Affairs, Gazdaság

The 2024 European Renewable Energy Market report by Schneider Electric provides a detailed exploration of the evolving renewable energy landscape in Europe. It presents a holistic view of the current trends, challenges, and opportunities shaping the sector. Key highlights of the report include the growing importance of Guarantees of Origin (GOs), the rise of Aggregated Power Purchase Agreements (APPAs), and an in-depth analysis of various European markets, including the UK and emerging renewable energy markets in Central and Eastern Europe as well as the challenges of integrating renewable energy in public and private sectors.

The main question: are we driving Europe’s energy market towards a sustainable and low-carbon future?

  • Guarantees of Origin (GOs): The Cornerstone of Transparency

Guarantees of Origin (GOs) play a pivotal role in ensuring transparency in renewable electricity procurement. Widely used across Europe, GOs certify the generation of 1 MWh of renewable electricity, enabling companies to verify their renewable energy sourcing and align with sustainability objectives. These certificates, standardized under the European Energy Certificate System (EECS), are critical for organizations tracking their carbon footprint.

The GO market has shown significant growth since its inception in 2001. Projections suggest the market will expand to €3.7 billion by 2030, with cancellations of GOs expected to increase by over 80% from 2022 levels. However, economic challenges, such as Brexit and fluctuating energy demands, have created volatility in GO pricing. The oversupply of renewable energy in 2023, due to favorable weather conditions, led to price reductions and stabilization in 2024.

  • Aggregated Power Purchase Agreements (APPAs): A Growing Trend

Aggregated Power Purchase Agreements (APPAs) are gaining attention in the European market as an innovative solution for companies, particularly small- and mid-sized enterprises, to access long-term renewable energy contracts. APPAs allow multiple buyers to collectively purchase renewable energy, increasing their bargaining power and enabling smaller companies to meet sustainability targets.

The benefits of APPAs include increased investment in renewable energy projects and enhanced price stability, protecting companies from market volatility. Large corporations are also using their influence to support decarbonization efforts in their supply chains by participating in APPAs as anchor tenants. However, challenges such as aligning buyer priorities and managing complex negotiations can slow down the process.

  • European PPA Market: Insights and Regional Dynamics

Corporate Power Purchase Agreements (CPPAs) continue to be a major driver of renewable energy growth in Europe. PPA prices across the region have seen a downward trend in 2024, with a significant portion of offers coming from solar energy projects, which accounted for over 80% of offers in the first half of the year. Despite the decline in prices, demand for both virtual and direct PPAs remains strong as corporates seek to meet environmental goals and hedge against price fluctuations.

In particular, countries such as Spain and Portugal continue to attract corporate buyers due to favorable conditions for solar and wind energy projects. However, grid connection issues and regulatory challenges in countries like the UK, Germany, and France present obstacles to renewable energy expansion.

  • Emerging Markets in Europe: Opportunities and Challenges

The report highlights emerging renewable energy markets in Central and Eastern Europe, which are showing promise for future development. Countries like Hungary, Greece, Croatia, and Serbia are gradually embracing renewable energy projects, particularly through solar and wind PPAs. Hungary, for instance, is exploring wind and battery storage projects despite reaching its solar energy targets for 2030 earlier than expected.

Poland, Bulgaria, and Romania are identified as key markets to watch due to their potential for large-scale renewable projects. However, regulatory uncertainties and grid challenges continue to pose risks, especially in Poland, where recent policy changes have affected the financial viability of PPAs.

  • Onsite Solar Energy: A Key Driver of Decentralized Energy Generation

The report underscores the growing popularity of onsite solar energy systems, which allow businesses to generate their own electricity and reduce dependence on the grid. Onsite solar offers multiple benefits, including cost savings, increased energy security, and a reduction in carbon emissions.

Solar energy installations have surged across Europe, with 56 GW of rooftop solar PV capacity added in 2023 alone. However, the expansion of onsite solar faces hurdles such as outdated grid systems and regulatory obstacles. Some regions, like Hungary, have introduced taxes that hinder the growth of PPAs, while other countries, like Belgium, have implemented mandates for solar panel installations on large private buildings.

  • A special segment on the UK Market: Navigating Uncertainty Amid Regulatory Reforms

The UK’s renewable energy landscape is in flux due to the Review of Electricity Market Arrangements (REMA), which could bring significant changes to the market. The reforms aim to decarbonize the UK’s electricity system, enhance flexibility, and improve cost efficiency. However, they also introduce uncertainty for market participants, including developers, corporate buyers, and investors.

Proposed changes to the Contract for Difference (CfD) scheme and the capacity market are intended to support the transition to renewable energy. Nevertheless, these reforms could slow down development in the short term as stakeholders assess the implications of the new policies. The UK’s public sector also faces challenges in integrating renewable energy into procurement processes due to complex regulations and resource constraints.

  • Building a Renewable Future?

The 2024 European Renewable Energy Market report provides a detailed snapshot of the challenges and opportunities shaping the continent’s energy landscape. Despite regulatory and market challenges, Europe remains on track to significantly expand its renewable energy capacity, with a particular focus on solar and wind projects, PPAs, and emerging markets in Central and Eastern Europe.

As the market continues to evolve, companies must stay informed about regulatory changes, market conditions, and technological innovations to capitalize on the growing demand for sustainable energy solutions. By embracing renewable energy procurement through mechanisms like GOs, APPAs, and CPPAs, businesses can play a crucial role in Europe’s transition to a low-carbon future.