Wärtsilä: EU net zero targets require energy market reforms


Europe – According to a recent report by the technology company Wärtsilä, in order for the EU to reach its net zero targets and enhance energy security, the European Commission must modify the structure of its electricity market to assign a value to flexible balancing power capability.

Wärtsilä has just released Energy Market Redesign: Towards a Decarbonized Europe in response to the European Commission’s launch of a public consultation for the design of the electricity market. A reliable and inexpensive transition to net zero power systems is provided by the new report, which highlights the crucial measures that must be implemented to attract investments into flexible balancing power capacity.

Renewable energy

By 2030, Europe will need at least 1,100 GW of renewable energy capacity to keep up its decarbonization efforts and maintain energy security. Nevertheless, Wärtsilä’s modeling shows that a renewable-based system of this size needs 50 GW of energy storage to provide electricity during periods of low generation and 19 GW of new flexible gas capacity to sustain it. The grid balancing gas engines can be modified to run on sustainable fuels like hydrogen when these become widely accessible in order to enable 100% renewable energy systems.

Grid stability

Wärtsilä’s internal investigation based on PLEXOS modeling demonstrates how the capacity supplied by a system powered by 1,100 GW of wind and solar might vary by as much as 500 GW over the course of a year due to the intrinsic variability of renewables. In these times of imbalance, flexible balancing power capacity is urgently required to close the supply gap.

In a study of EU power systems, Wärtsilä found that balancing technologies like reciprocating engines and energy storage will be essential, contributing 19% of electricity generation in the EU by 2030. According to the study, in order to maintain grid stability, these technologies will need to run for a few hours each day.

Balancing power capacity

In summary, the way the EU is now structuring its incentives for balancing power investment runs the danger of weakening investment and creating a significant bottleneck in the energy transition. According to Wärtsilä’s modeling, without the proper market pricing mechanisms for balancing power, the investment case for flexible balancing power capacity may become even more difficult in the future.

Wim Raaijen
I am a creative publisher, editor in chief, writer, vlogger and moderator with a journalistic and philosophic based view. Trying to re-invent the concept of publishing, based on platforms and partners, instead of separated media and advertisements. I am interested in industrial subjects like transition, sustainability, safety, energy efficiency, innovation and responsibility.