Market development of a sustainable power system

This report addresses the question whether, in today’s electricity market, there is still long-term economic justification for investing in solar or wind power. The answer is: NO. 

The number of hours that solar panels and wind turbines produce electricity will depress its price to such an extent that market returns on investment will vanish. During non-productive hours, fossil-fuelled power stations will take over and the price will rise to above what it is at present. Averaged over a year, the average price will consequently remain much the same as today.

To restore the economic perspective of solar and wind power therefore requires supplementary policy. This could take the form of continued and higher subsidies, generation of a more elastic demand (e.g. Power-to-Heat) or conversion of surplus renewable power to green fuels like hydrogen.



Frits Otten (University of Utrecht)

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