EC – Europe’s energy cost to rise until 2030

Next week, the European Commission is expected to unveil its latest vision on planning a greener energy future and a draft document seen by Reuters points to a hike in the average capital costs of the energy system in the next decades.

Power prices would rise until around 2030 but new energy systems could lower prices after that, the document said. The commission sees five possible scenarios regarding the region’s energy mix by 2050. These put energy prices between EUR146.2/MWh and EUR198.9/MWh.

The key to curtailing the price rises would lie in increasing energy efficiency. “Improving energy efficiency is a priority in all decarbonisation scenarios. Current initiatives need to be implemented swiftly to achieve change.
“In all our scenarios the share of renewables has to rise significantly in order to achieve our climate goals, and renewables will become the core of the energy mix,” the EC’s energy commissioner Guenther Oettinger said. Renewable energy will account for at least 55% of gross final energy consumption in 2050, against today’s 10%.

The document also confirmed the role of nuclear power in the continent’s decarbonisation process, despite this year’s Fukushima disaster. “Nuclear energy will be needed to provide a significant contribution in the energy transformation process in those member states where it is pursued. It remains a key source of low carbon electricity generation.”

However, natural gas would also play a critical part in this. “Substitution of coal (and oil) with gas in the short to medium term could help to reduce emissions with existing technologies until at least 2030 or 2035.” Long-term gas supply contracts would be a key feature as they would be required to underwrite investments in gas production and distribution infrastructure.