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Auction systems for energy procurement are hindering the rapid growth of renewables needed to meet the climate goals of the Paris Agreement.
Editorial office / Berlin

This is evident from a new study commissioned by the energy policy think tanks Energy Watch Group, World Future Council/Global Renewables Congress and Haleakala Stiftung. They studied in 20 countries worldwide how policy influences the expansion of renewable energy projects. Their conclusion is that the auction system has significant shortcomings. For example, new players with smaller and medium-sized energy projects are often superseded by the larger, established parties, leading to market concentration and delays in production expansion.

Investments stagnating

“In many parts of the world, renewable energy sources are now the cheapest source of energy,” concluded Hans-Josef Fell, Chairman of the Energy Watch Group. “At the same time, the socio-economic benefits of renewable energy are not being sufficiently harvested and investments in green energy are stagnating.”

New data published by the International Renewable Energy Agency (IRENA) confirms that investment in renewable energy has been declining since 2017, a trend likely to continue in 2020/2021 as a result of the COVID-19 pandemic.

Anna Leidreiter, Global Renewables Congress project leader at the World Future Council, emphasizes that the lion’s share of energy will have to come from renewable sources in the next decade. “To meet this ambitious goal, everyone needs to be part of this transition. We need political frameworks that open up the energy market for new players.”

Auctions alone can not serve this purpose. Scrutinizing state aid for renewable energy is also an obstacle. Dörte Fouquet of Becker Büttner Held (BBH): “If the EU really plans to put the Paris climate goals into practice, the new Renewable Energy Directive must give EU Member States full flexibility to choose their own policy instruments.”

The full study can be downloaded from the Energy Watch Group website.

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