Renewables are the cheapest form of power generation. But this doesn’t tell the full story. What about the costs of grids, storage and back-up ?
WindEurope’s latest study done in cooperation with Hitachi Energy shows that even when accounting for the grids, storage and back-up, a system running on high shares of renewables is the cheapest by far.
WindEurope and Hitachi Energy have mapped out the total system costs of 5 energy scenarios. 4 scenarios that deliver net zero and one ‘slow transition’ scenario where Europe does not meet its climate targets.
Scenarios relying more heavily on nuclear, hydrogen or CCS would all be more costly than a renewables-based scenario. By 2050 the differences in costs range from €487bn to €860bn.
And a renewables-based energy system is €1.6tn less expensive than a system where Europe fails to deliver on net zero. The €1.6tn difference is largely due to residual fuel costs and the costs of carbon in the slow transition scenario. Already by 2035 the renewables scenario saves €331bn compared to the slow transition scenario.
The cumulative savings from running our energy system on renewables are equivalent to what Europe collectively spends on healthcare each year. And 9% of the European Union’s GDP.
The renewables-based energy system entails a major increase in the share of electricity in the energy mix. And that electrification requires major investment, especially in heavy industry. We’ve factored this into the study. Even when accounting for investment in electrification a renewables-based scenario is the cheapest overall.
A system based on high shares of renewables also ensures system stability and has a big energy security margin with energy production far outstripping demand.
And a renewables-based energy system is the most resilient to external shocks such as the one we experienced following Russia’s invasion of Ukraine. Of all the scenarios the renewables scenario has the lowest dependency on energy fuel imports. Energy fuel imports are only 22% of the total energy supply in 2050, compared to 54% in the slow transition scenario.
A renewables-based energy system also comes with additional benefits. Jobs in particular. The European wind industry employs 440,000 people today and will employ 600,000 by 2030.
There is no upside to diminished climate ambition. There is no upside to slow walking renewables.
As the IEA said in its 2025 World Energy Outlook, we are in the Age of Electricity. And renewables are the best placed to deliver that. Let’s lean into it – this is our competitive edge as Europeans.
This transition is already underway. As Europe looks ahead to 2050, it is revealing to think what our energy system looked like 25 years ago. Back in 2000 the share of wind and solar in Europe’s electricity was a combined 0.8%. It’s 30% today. And Europe’s emissions are down by nearly 1/3 on 2000 while the economy has grown 45%. Let’s build on this success.
Source: WindEurope
