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Long-Term Generation Investment Signals in a Market with High Shares of Renewables 5 May 2021 Today, CEER publishes its report on Long-Term Generation Investment Signals in a Market with High Shares of Renewables. More and more renewables are integrated into the energy system, which is essential to reach EU and national climate targets. But as renewables have lower marginal costs compared to energy from fossil fuels, this evolution impacts price signals and volatility of the market. This report analyses the ability of the current markets to adapt to the changing circumstances and to continue to send adequate long-term signals to remunerate necessary and reliable capacity whilst providing flexibility and security of supply. This paper explores this challenge, and outlines some of the issues which contribute to it. The paper addresses some of the current market failures in Europe and finds that the source of concerns in terms of investment in Europe is more related to these failures than merely to the penetration of renewable energy sources (RES), even if the latter seems to amplify the distortions. This CEER report concludes by highlighting that it is essential that EU Member States and regulators give priority to eliminating as many market failures as possible, as required by the Electricity Market Regulation (2019/943). These actions must be clear, transparent, credible and predictable in order to help attract investment and to avoid increasing uncertainty. Please find the full report here. |
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