Low profitability of projects threatens climate goals, and the lack of appropriate demand management mechanisms deepens the problem. This situation requires a change in the approach to energy consumption and investment in solutions that will ensure the stability of the energy network. There is a risk of having to return to fossil fuels, writes Bloomberg.
Renewable energy crisis in Denmark and Sweden
Signs of the end of the wind energy boom are visible primarily in Denmark and Sweden. The Danish government, in the country with the highest share of wind energy in the world’s energy mix (58% last year), did not receive any offers in the last tender for offshore wind farm investments. In Sweden, low energy prices and delays in implementing green projects are discouraging investors.
“We cannot have an electricity system based solely on wind and solar energy,” said Aalborg University professor Brian Vad Mathiesen.
The main problems of European wind energy:
- Low energy prices: The large supply of energy from existing wind farms leads to falling prices, which discourages investors from financing new projects.
- No demand: The pace of adoption of electric vehicles and green hydrogen has not met expectations, further limiting demand for renewable energy. The market is saturated.
- Cost increase: Rising steel and labor prices increase the costs of building wind farms, reducing their profitability.
- Network restrictions: The lack of appropriate network infrastructure hinders the transmission and distribution of energy from wind farms, which leads to energy waste. For example, the UK is seeing record wind energy losses due to grid constraints.
How to save wind energy in Europe
- Demand adjustment: encouraging consumers to adapt their energy consumption to fluctuations in the supply of renewable energy sources.
- Investments in modernizationand expansion of the energy networkthat will enable efficient transmission of energy from wind farms.
- Development of new business modelsthat will ensure profitability of investments in wind energy despite low energy prices.
