Europe to Cross 250 GW of Solar Energy by 2024: Wood Mackenzie

Europe’s annual solar market is set to double over the next few years and will do so in a sustained manner, according to a new research from Wood Mackenzie Power & Renewables

Wood Mackenzie released a report titled ‘Europe solar PV outlook 2019’ which says that Europe is likely to see a boon in its solar installation in the next 4-5 years.

Solar projects now regularly beat the onshore wind in competitive auctions in Germany, one of the world’s most mature wind markets. France has rebounded and is now seen as the most attractive place to build solar in Europe. Meanwhile, long-dormant Spain has rapidly transformed into a globally significant solar market, as well as a new hot spot for corporate renewables deals.

Germany and Spain lead European solar PV installations between 2019 and 2024

According to the report, Germany is likely to install 21 GW of new solar power capacity between 2019 and 2024, with Spain following closely with nearly 20 GW of majorly utility-scale power capacity. These countries are expected to lead as the largest PV markets in Europe as the region is expected to double its new installations over the next 3 years to around 20 GW annually. At least 5 GW will be installed by 7 European nations during this period with another 18 installing more than 1 GW solar.

And unlike the days when installations were driven by politically vulnerable subsidies, the market is increasingly centered around competitive auctions and subsidy-free projects. As the market matures and moves from feed-in-tariffs (FIT) to competitive auctions, European Union (EU) guidelines on state aid for renewable energy encourage technology-neutral tenders that pits solar against other renewables. At the end of 2018, 24 GW of solar PV capacity was awarded and another 47 GW was confirmed across more than a dozen markets.

Read: Coal addiction. Only 8 EU Nations Pledge To Phase it out by 2030

Within the next 5 years, the report sees FITs and subsidies withdrawn from several markets in the continent ‘creating pressure on profitability and cost’.

Another important factor to watch out for is the growth of distributed solar generation for self-consumption which is likely to account for nearly 40% of capacity installed from 2019 to 2024. “As government support is scaled back, it will be necessary to increase rates of self-consumption in order to make investments stack up. Pairing solar with battery storage will become more commonplace,” said Senior Analyst with Wood Mackenzie Tom Heggarty.

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Other insights:

  • A backdrop of rapid power-sector decarbonization and plant retirements. Europe will lose around 174 gigawatts of coal, gas and nuclear capacity between 2015 and 2040, WoodMac forecasts.
  • A diversified solar market and vibrant roster of renewable-energy developers. While utility-scale projects remain the largest segment, distributed solar is bigger in several key markets like Germany and the Netherlands, offering a diverse set of opportunities for developers and technology suppliers.
  • The recent takeoff of subsidy-free projects, driven in part by rising wholesale power prices. Carbon prices have increased sharply in Europe recently, and WoodMac expects them to continue trending upwards out to 2040, when they will trade around €40 ($45) per megawatt-hour.
  • The finalization by the end of the year of European countries’ plans for reaching their ambitious renewables targets for 2030, giving more visibility to the market.

In 2018, Europe installed 11.3 GW of new solar PV capacity growing 21% annually, according to SolarPower Europe’s Global Market Outlook. It expects 20.4 GW of new installations in 2019 and 24.1 GW in 2020 in the medium scenario. The Latest Wood Mac forecasts are in line with another report by Solar Power Europe’s Global Market Outlook which was published in May, where the European solar lobby association forecasted that Europe will grow from 126 to 255 GW by end of 2023.

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Sneha Verma

Sneha Verma

Sneha has worked with News agencies such as DD, PTI and ANI and after covering politics, in search for fresh air, she later joined Iamrenew team. She has done her graduation in Journalism & Masscom. from IP university and PGD in HR from TISS.

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