Solar Power Will Become 10x Cheaper Than Gas in Europe, Study Predicts

Between May and August of this year, the EU set a record when it generated 12.2 percent of its electricity from solar power, according to energy think tank Ember, reported the World Economic Forum.

A new study by Oslo-based energy research company Rystad Energy said extending Europe’s solar photovoltaic (PV) capacity would be 10 times less expensive than operating gas-fired power plants in the long run, Electrek reported. Especially considering natural gas prices have jumped since Russia drastically reduced its gas exports following its invasion of Ukraine.

The study said that the dropping of the cost of renewables, market challenges and inflated gas prices all point to a shift away from natural gas as Europe’s main source of electricity, reported the Institute for Energy Economics and Financial Analysis.

“Gas will continue to play an important role in the European energy mix for some time to come, but unless something fundamental shifts, then simple economics, as well as climate concerns, will tip the balance in favor of renewables,” said Carlos Torres Diaz, head of power at Rystad Energy, as pv magazine India reported.

Rystad Energy reported that, so far this year, gas prices have increased by 187 percent since last year, according to Electrek.

More than 50 gigawatts (GW) of new wind and solar capacity are predicted to be commissioned next year. In addition, a French multinational utility plans to bring as much as 30 GW of nuclear energy capacity back online.

Rystad Energy predicts that, by 2030, gas prices for the Netherlands-based Title Transfer Facility (TTF) — the main natural gas authority for Western Europe — will stabilize at about $31 per megawatt (MW) hour, but that is three times more than the levelized cost of electricity (LCOE) of the most up-to-date solar PV facilities.

If natural gas is to continue being competitive, gas prices would have to fall to about $17 per MW hour, and carbon prices would have to be about $10 per metric ton, which Rystad said is “currently unthinkable.”

If the funds for gas were invested in renewable power generation, Europe would be able to replace predicted gas-powered generation by 2028. By then, Rystad predicted new clean energy generation capacity would reach 333 GW.

The estimate presumes a pre-development phase of two years, pv magazine India said.

By 2050, more than 2,000 terawatt hours would be generated by new renewables, reported Electrek. One terawatt-hour is big enough to generate enough electricity for the annual needs of about 200,000 homes.