Study: Failure to accelerate the expansion of renewables could lead to an 80% increase in carbon prices by 2030

By contrast, higher renewable expansion rates could stabilize and even reduce electricity prices

9 November 2021

An energy market analysis conducted by Aurora Energy Research and commissioned by the European Climate Foundation revealed that a slow expansion of the renewables and delaying coal exit would lead to 80% higher carbon prices in 2030 compared to today’s level. Rising carbon prices would also impact wholesale power prices which are expected to increase by 31% in Germany and by 14% in Poland compared to the first half of 2021.

In Romania, higher carbon prices combined with a failure to implement early phase-out of coal-fired power plants as well as an increased reliance on gas as a transition fuel would lead to electricity prices rising by 48% compared to mid-2021, before the European energy crisis. Furthermore, our country would become a net importer of energy. Based on different scenarios, by 2030, Romania’s energy imports could vary significantly from less than 1TWh, according to the Target Scenario with higher renewables generation share, to 5 TWh according to the Pessimistic Scenario.

On the other hand, the study also revealed that a faster expansion of both wind and solar capacities could stabilize and even reduce power prices. According to the researchers, energy bills could be reduced by 14% in Germany and by 26% in Poland. In Romania, power prices could still rise about 8% according to Target Scenario. “The increase is primarily driven by increasing demand while we expect renewables to not receive much support beyond allowing for more market-driven development”, concluded the study.