Auctions of power purchase contracts as a price-setting mechanism for wind energy are proving to be sharp tools for driving down cost. But sharp tools need handling with care
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We face a fundamental change of the cost structure on the supply side and a need for a fundamental change.
They [the European Commission] are looking at this stuff backwards. I still think they are convinced the short-term market model could work even though they are also starting to realise that you need something parallel, with long term price signals that give investors confidence to invest in infrastructure and allow them to see a decent market return.
Despite tremendous cost decline of wind and solar technologies, electricity prices will probably remain too low to attract the level of investment needed.
The greatest barrier to overcome is the integration of variable renewables into electricity systems. This will require developing power system flexibility and also a friendly deployment of variable renewables.
Once seen as exotic fare, offshore wind investments have become a staple diet for pension funds. New types of investor are moving their chairs up to the table