Phasing out economic support of mature renewables?

Drivers, barriers and policy options

Published: 16/06/2016

One of the objectives of the Towards 2030 project is to identify and analyse the challenges that EU renewable energy policy will face in the period 2020-2030. This Towards2030 report explores the necessary conditions for a potential ‘phase-out’ of economic support for mature renewable technologies that is compatible with the levels of deployment required to reach the defined EU target of at least 27% renewables in 2030. The research was led by Ecofys with support from project partners.

The main ‘drivers and barriers of RES-E competitiveness’ - both on the cost and revenue side - are identified and analysed in detail. Possible policy measures to enhance drivers and/or overcome barriers are discussed. The report concludes that in the medium term it may be possible to increase the share of RES-E without providing dedicated economic support. Such phase-out of economic support requires that two main conditions are met: firstly, expected future revenues from power markets are sufficiently high to cover generation costs; secondly, the risk tag attached to those revenues has to be acceptable for investors in the energy sector.

Nowadays, these conditions are not met yet, despite falling generation costs. RES targets and support schemes will still be needed for a transitional period until power markets provide sufficient and sufficiently predictable revenues for RES developers. The level of support needed during this transitional period will strongly depend on how policies affect the ‘drivers’ and ‘barriers’ of competitiveness described in this paper.

Find additional insights at the project website: towards2030.eu

Ecofys consultant and one of the authors of this report Luis Janeiro presented the topic in a webinar that took place on 23 September 2016. The recording can be watched here: