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Do almost mature renewable energy technologies still need dedicated support beyond 2020?

Published: 10/05/2017

The recent German offshore wind auction resulting in zero subsidy support has raised questions on whether renewables support schemes will still be needed in the future. However, this auction result cannot be transferred to all new investments. Despite nearly mature wind and solar energy technologies, dedicated financing schemes for renewables will be beneficial after 2020. This is the conclusion of a new report that Ecofys, a Navigant company, wrote in partnership with Fraunhofer ISI, CSIC, TU Wien, CEPS and ECN. As part of the EU-funded Towards2030-dialogue research, the team investigated whether dedicated support of almost mature renewable energy technologies should be continued beyond 2020.

The experts find that continued support is valuable in lowering the cost of the energy transition, as it reduces the risks of renewables investments and facilitates further technology cost reductions. With the emissions trading and power markets in transition, such investments and cost reductions could not yet be yielded through market prices. 

In the report, the experts also show that the current support for renewable energy sources is not the main cause of low prices on the carbon and power markets. The authors propose a combination of policy instruments to reduce over-supply in these markets, including an improved market stability reserve for emission allowances and auction-based volume control of renewables support.