![]() That takes away the price incentive of switching to renewables – by making the price remain artificially high even after the switch. This means that at times of high input from low-priced renewables (such as sunny or windy days), coal and gas become so expensive by comparison that they are pushed out of the market – but the price is still set by these most expensive plants. The price on the electricity exchange varies based on how much power is available from different kinds of sources and at what cost. ![]() The culprit, say experts, is the “merit order” in which the most expensive power stations set the overall price. Yet this is not spurring a big increase in renewables it is only moving renewables from replacing coal to replacing gas. Market flawsĮurope finds itself in a situation where gas prices are at record highs, while renewables prices are at record lows. Because it is difficult or impossible for most homeowners to change their heating source, price signals are not enough to motivate switching. Meanwhile, on heating, the rise in gas prices has not yet spurred a widespread switch to renewable heat such as heat pumps, although their share is growing. “It is clear you will need legislation to guarantee that coal plants will be off-grid by 2030.” “We need action to keep the EU coal phase-out on track,” he adds. We need to get off both coal and gas by 2035.” “Europe has been focused on coal, but not gas. ![]() “The gas crisis has really demonstrated that Europe needs to get serious about renewables deployment,” says Charles Moore from Ember. Because there are not yet enough renewables online to replace both, that means the decline in coal is slowing because there are less renewables available to replace it – they are busy replacing gas – and yet coal is much more emissions-intensive than gas. From 2011 to 2019, more than 80% of new renewables came at the expense of coal, according to the Ember report. The bad news is those renewables were until now going to replace coal instead of gas. (Photo by coldsnowstorm via Getty Images) Consumers are increasingly worried about high energy bills. Renewable electricity has had an average annual growth of 44 terawatt-hours over the past two years, and more than half of that new wind and solar power replaced gas plants. Last year saw a decline in fossil fuels’ share of electricity production in the EU, from 39% in 2019 to 37% in 2021. The good news, according to a recent report by climate think tank Ember, is gas power generation is being replaced with renewable energy because renewables have become the cheapest form of electricity by far. Please check your email to download the Report.
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