Engie, a French utility company, recently revealed that it is going to install 300 megawatts of wind energy across nine wind farms in Spain, with support from a $350 million investment. An article posted on the website of Vox stated that the company is doing the project without government support, “and it’s far from the only European energy company willing to make a bet like this.”
The article also stated that Vattenfall, a Swedish company, announced in March that it won its bid to develop a 700 MW offshore wind farm in the Netherlands. The project would be the first non-subsidized wind energy project in the country.
In the first competitive power auction in Germany last spring, the federal grid regulator accepted four bids for a total of 1,490 MW of offshore wind capacity in the North Sea, with an average subsidy rate of €1.44 per kilowatt-hour. The article stated that it is low because one of the bidders, a Danish wind energy form Dong, passed a bid with zero subsidy rate. And the same thing is happening with solar, with at least a dozen unsubsidized solar projects developed in Europe.
“All of this evidence that major renewable energy projects can take off without a financial boost from governments. It’s a great thing because the European Union is looking to phase out subsidies for renewable energy as these policies have become expensive with an explosion of wind and solar installations across the continent,” the article reads. The report further explained, “It is also a sign that these technologies have drastically dropped in cost and are increasingly safe investments for the notoriously stodgy utility sector. As such, we are going to see more subsidy-free solar arrays and wind farms cropping up in Europe, driving a larger share of the growth.”
Simon Evans wrote, “Overcoming the higher cost of financing subsidy-free schemes is one hurdle; managing variable renewables on the grid is another. Meanwhile, governments must weigh the appeal of hoping the market delivers zero-carbon electricity without policy support, against the risks of failing to meet other priorities.”
Read the full report here.
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