S'abonner

Onshore renewables remain the most cost-effective technology in Europe

The European Power Service has published a report on the evolution of energy production costs in Europe. According to the report, onshore renewable energy remains the most cost-effective. However, short-term challenges remain.

Share:

According to a report published by the European Power Service, onshore renewable energy remains the most cost-effective energy technology in Europe. The discounted cost of electricity (LCOE) is expected to more than halve to €23/MWh by 2050 compared to 2022, making onshore wind the most cost competitive technology. Offshore wind is still expensive, but costs are expected to drop by 68% by 2050. There is also huge potential in the offshore wind market, with nearly US$1 trillion expected to flow into the global sector over the next decade.

Battery storage LCOEs have been reduced by 86% over the decade to 2021, driven by automotive innovation. And they remain on track to fall by 60% by 2050.

Solar LCOEs will decrease

According to the report, forecasts show that discounted electricity costs for solar and solar plus storage solutions are expected to decline by 2050. However, it is important to note that not all technologies will be equally competitive in terms of cost. For this reason, the report provides a detailed breakdown of the forecast for each solar solution to help investors make informed decisions. Investments in the electricity generation and storage sector in Europe will be massive, reaching €1,640 billion by 2050, of which 78% will go to solar and wind power.

Gas remains essential to the European energy system despite its high price

Gas remains essential to the flexibility of the European energy system. However, with the rising price of gas, it cannot compete with renewable energy in terms of cost. Fossil fuels are the most expensive energy options in the LCOE rankings, with a premium of over 200% on average wind and solar projects today. As fuel and carbon prices rise, fossil fuel LCOEs will increase by 10% for 2022, before declining at an average rate of 1% through 2050.

Short-term challenges for renewable energy and energy storage in Europe

While the long-term trend is for renewable energy costs to decline, there are significant short-term pressures. The LCOE figures for renewables and energy storage in 2022 increased by an average of 19% due to supply chain bottlenecks and commodity price inflation. Challenges associated with permitting and finding skilled labor in the region persist and compromise timely deployment. Equipment manufacturers will have to recoup the higher cost of manufacturing the products.

Onshore renewables remain the most cost-effective energy technology in Europe, with costs expected to fall further by 2050. Offshore wind has huge growth potential, but costs still need to come down to be competitive with other technologies. Battery storage has seen a sharp reduction in its cost, while gas remains essential to the European energy system.

  • Populaires ​
Ardian completes Akuo takeover and installs Bruno Bensasson at the helm
Donald Trump significantly increases US tax credits for carbon capture
Czech Republic hit by massive power outage disrupting the economy
France anticipates significant slowdown in emission reductions starting in 2025
EDF postpones Calvados wind farm to 2027 due to faulty drilling tool
Trump law reshapes US energy markets according to Wood Mackenzie
US President Donald Trump's One Big Beautiful Bill Act dramatically changes energy investment rules, imposing restrictions on renewables while favouring hydrocarbons, according to a recent report by consultancy firm Wood Mackenzie.
The French Senate adopts the Gremillet bill for energy transition
On July 8, 2025, the Senate validated the Gremillet bill, aimed at structuring France's energy transition with clear objectives for nuclear power, renewable energies, and energy renovation.
Latin America’s six largest economies accelerate transition to renewables
Brazil, Mexico, Argentina, Colombia, Chile, and Peru significantly increase renewable electricity production, reaching nearly 70% of the regional electricity mix, according to a recent Wood Mackenzie study on Latin America's energy sector.
Canada funds 13 Indigenous energy projects with $40mn investment
The Canadian government announces an investment of more than $40mn to fund 13 energy projects led by Indigenous communities across the country, aiming to improve energy efficiency and increase local renewable energy use.
Germany extends electricity price aid to 2,200 companies
The German Ministry of Economy plans to significantly expand aid aimed at reducing industrial electricity costs, increasing eligible companies from 350 to 2,200, at an estimated cost of €4bn ($4.7bn).
U.S. Senate Approves Accelerated End to Renewable Energy Tax Credits
The Republican budget bill passed by the U.S. Senate accelerates the phase-out of tax credits for renewable energies, favoring fossil fuels and raising economic concerns among solar and wind industry professionals.
Brazil: renewable energy curtailment to jump by 300% by 2035
Rapid growth in solar and wind capacities will lead to a significant rise in electricity curtailment in Brazil, as existing transmission infrastructure remains inadequate to handle this massive influx of energy, according to a recent study by consulting firm Wood Mackenzie.
South Korea reduces its dependence on fossil fuels below 50%
In April 2025, fossil fuels represented 49.5% of South Korea's electricity mix, dropping below the symbolic threshold of 50% for the first time, primarily due to a historic decline in coal-generated electricity production.
US Senate adopts tax neutrality for advanced biofuels
The US Senate Finance Committee modifies the '45Z' tax credit to standardize the tax treatment of renewable fuels, thereby encouraging advanced biofuel production starting October 2025.
Renewable energy: access improving, but financing still insufficient for Africa
According to the 2025 report on global energy access, despite notable progress in renewable energy, insufficient targeted financing continues to hinder electricity and clean cooking access, particularly in sub-Saharan Africa.
China and the United States improve their energy performance in an unstable global context
While advanced economies maintain global energy leadership, China and the United States have significantly progressed in the security and sustainability of their energy systems, according to the World Economic Forum's annual report.
Algeria and Angola strengthen energy cooperation at US–Africa summit
On the sidelines of the US–Africa summit in Luanda, Algiers and Luanda consolidate their energy collaboration to better exploit their oil, gas, and mining potential, targeting a common strategy in regional and international markets.
UK urged to accelerate electricity price reforms
The UK's Climate Change Committee is urging the government to quickly reduce electricity costs to facilitate the adoption of heat pumps and electric vehicles, judged too slow to achieve the set climate targets.
Brussels expands subsidies for low-carbon technologies and nuclear power
The European Commission will extend until the end of 2030 an expanded state-aid framework, allowing capitals to fund low-carbon technologies and nuclear power to preserve competitiveness against China and the United States.
Japan Faces Major Electricity Shortfall of 89 GW by 2050
Japan's grid operator forecasts an energy shortfall of up to 89 GW by 2050 due to rising demand from semiconductor manufacturing, electric vehicles, and artificial intelligence technologies.
EU Approves Targeted Energy Aid for Europe’s Heavy Industries
Energy-intensive European industries will be eligible for temporary state aid to mitigate high electricity prices, according to a new regulatory framework proposed by the European Commission under the "Clean Industrial Deal."
Mauritius launches international tender for floating power plant
Mauritius seeks international investors to swiftly build a floating power plant of around 100 MW, aiming to secure the national energy supply by January 2026 and address current production shortfalls.
Spain and Portugal Strengthen Networks Following April Blackout
Madrid announces immediate energy storage measures while Lisbon secures its electrical grid, responding to the historic outage that affected the entire Iberian Peninsula in late April.
Indonesia Commits 190 Billion USD to Expand Energy Capacity by 2034
Indonesia has unveiled its new national energy plan, projecting an increase of 69.5 GW in electricity capacity over ten years, largely funded by independent producers, to address rapidly rising domestic demand.
France: Moratorium on renewables; warning about immediate industrial impact
French Minister Agnès Pannier-Runacher condemns the parliamentary moratorium on new renewable energy installations, warning of the potential loss of 150,000 industrial jobs and increased energy dependence on foreign countries.

LEGAL

FOSSILS

POLICY

RENEWABLE

PLUS

© XMARKET PUBLISHING