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Will Electricity Be Free? Not When You Really Need It
Article

Will Electricity Be Free? Not When You Really Need It



Editorial Rating

8

Qualities

  • Analytical
  • Eye Opening
  • For Experts

Recommendation

In 2020, variable renewable energy (VRE) met about 9% of global energy needs. That number will need to rise to 70% to achieve net-zero emissions by 2050. The catch is that total energy needs will increase about 2.5 times by 2050. In general, more renewable energy generation means more price volatility – and price volatility for a vital necessity, both for consumers and industry, is a daunting prospect. In this Boston Consulting Group report, Philip Hirschhorn and Tom Brijs discuss data from regions that already have high renewable energy production.

Take-Aways

  • More renewable energy production usually means more price volatility, but some markets have avoided the steepest price spikes.
  • Major factors influencing price volatility include capacity markets, interconnectivity, pumped hydro capacity, and price floors and caps.
  • Stakeholders can take action to reduce price volatility as use of variable renewable energy (VRE) continues to grow.

About the Authors

Philip Hirschhorn (Sidney) and Tom Brijs (Brussels) are professionals with the Boston Consulting Group.


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