Genovese Fabio, Drabik Eleanor and Egenhofer Christian

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By 2030, half of the EU’s electricity demand will be covered by renewables and will need to be accompanied by flexible conventional back-up resources. Due to the high upfront costs inherent to renewables and the progressively lower running times associated with back-up capacity, the cost of capital will have a proportionately greater impact on total costs than today. This report examines how electricity markets can be designed to provide long-term price signals, thereby reducing the cost of capital for these technologies and allowing for a more efficient transition. It finds that current market arrangements are unable to provide long-term price signals.

Available at: https://www.ceps.eu/publications/eu-power-sector-needs-long-term-price-signals