Europe’s renewable energy capacity is on track to more than triple by 2050, yet it’s still unlikely to be enough to help the continent achieve its dreams of net zero greenhouse gas emissions by 2050.
That’s according to a new report by Aurora Energy Research, which reveals that Europe’s renewable energy capacity has already grown to more than 528 GW over the past decade, spurred by increased power demand, supportive government policies, the phase-out of thermal power plants, and supply chain improvements.
This uptick aligns with the EU’s revised Renewable Energy Directive, which has raised the 2030 renewable energy target from 32% to 42.5%. Meeting this new goal will require EU countries to add over 600 GW of additional renewable capacity by 2030, compared with 2024 levels.
However, despite this rapid expansion, renewables remain exposed to multiple challenges. Aurora’s European Renewables Market Overview Report (ResMOR) indicates that projects without price protection face heightened risk from negative electricity prices, particularly in Central Europe and Nordic markets. Moreover, the report emphasises that market saturation remains a concern, with Greece, Romania, and Great Britain identified as being especially vulnerable to price cannibalisation without significant deployment of energy storage or flexibility solutions.
The issue of grid congestion also features prominently, as Aurora notes that Europe recorded 57.28 TWh of remedial actions in 2023 – a 14.45% increase on 2022. Germany, Poland, Great Britain, and Ireland were the most affected, each curtailing large quantities of energy. The analysis shows that curtailment compensation varies widely by market, with many new connections now considered ‘non-firm’, therefore carrying higher risk.
Rebecca McManus, Renewables Lead, Pan-European Research at Aurora Energy Research, commented, “Negative prices and grid constraints are significant risks for renewable assets in the market today, which will be further exacerbated with more renewables deployment. It’s vital for developers to explore opportunities to de-risk projects such as portfolio diversification to mitigate impacts.”
Jannik Carl, Research Associate, Pan-European Research at Aurora Energy Research, added, “While Spain and Great Britain boast a robust pipeline of merchant renewables, most European developers still rely on stable revenue streams and market risk protection. Policymakers must ensure strong incentives and flexible frameworks – like combining subsidies with PPAs and offering curtailment protection – to drive the sustained growth of renewables and achieve Europe’s net zero climate goals.”
How Europe could still achieve its climate ambitions
Europe is still eager to lead the world in decarbonisation, but it can only do so if it can fully leverage its arsenal of renewable energy generation assets. To do that, it needs to stop spending so much money on curtailment and move some of those funds to solving the issues of flexibility – ensuring that clean power is being discharged to the grid even in situations where the weather isn’t optimal.
For its part, Aurora has suggested that deploying more energy storage, improving flexibility on the grid, and diversifying both technology and geography will be crucial to reducing exposure to negative pricing and congestion issues. Strategies like battery energy storage system co-location and securing additional revenue streams through capacity or ancillary services are likely to become increasingly important.
But can Europe still decarbonise by 2050? Only time will tell. People are already sceptical about some of the UK’s climate ambitions, and it’s likely that Europe will face the same scrutiny, at least until some of the obvious policy issues are solved.