{"id":10437,"date":"2025-10-20T11:53:11","date_gmt":"2025-10-20T09:53:11","guid":{"rendered":"https:\/\/www.rivistaeco.com\/?p=10437"},"modified":"2025-10-20T11:53:11","modified_gmt":"2025-10-20T09:53:11","slug":"how-to-renew-renewables","status":"publish","type":"post","link":"https:\/\/www.rivistaeco.com\/en\/2025\/10\/20\/how-to-renew-renewables\/","title":{"rendered":"How to Renew Renewables"},"content":{"rendered":"<p><em>Renewable sources now play a highly significant role in Europe\u2019s electricity generation\u2014and that role will continue to grow, since the European Union, as part of the Green Deal, has set a target for renewables to reach 42.5% of final energy consumption by 2030. Meanwhile, the costs of these technologies continue to decline. Yet the picture is not entirely bright. As the share of solar, wind, and hydro power in the energy mix rises, integrating them becomes increasingly difficult, and public support is often required for investments that do not pay for themselves through market revenues. If it wishes to stay on track with its climate goals, Europe faces difficult choices in the coming years. Two questions are particularly crucial: first, whether to maintain a specific target for renewables or to group them with other low-emission sources such as nuclear power; and second, whether to keep identical targets for all member states, regardless of their natural endowments of sun, water, and wind.<\/em><\/p>\n<p>&nbsp;<\/p>\n<p>There is one overarching goal shaping Europe\u2019s energy, environmental, and industrial policies: the decarbonization of the economy. The EU has pledged to achieve carbon neutrality\u2014meaning net-zero emissions of CO\u2082 and other greenhouse gases\u2014by 2050. Before then, it must meet an intermediate goal: a 55% reduction in emissions compared with 1990 levels by 2030. A further interim target is under discussion\u2014a 90% reduction by 2040.<\/p>\n<h3><strong>The Targets and How to Reach Them<\/strong><\/h3>\n<p>To achieve these goals, the EU has adopted a series of tools and sub-targets. Among the most important is the Emissions Trading System, a cap-and-trade mechanism that sets a maximum limit on harmful emissions for certain industries and allows companies to buy and sell permits accordingly. This system is designed to ensure a gradual reduction in industrial emissions. It is accompanied by two other binding targets: the first concerns renewable sources, which should cover 42.5% of final energy consumption by 2030 (up from 24.5% today); the second concerns energy efficiency\u2014the ability to achieve the same results in terms of goods and services while consuming less energy\u2014which should improve by 11.7% compared with the current scenario, also by 2030.<\/p>\n<h3><strong>China\u2019s Disruptive Entry<\/strong><\/h3>\n<p>Understanding these figures is essential to interpreting the trends in renewable investment. Between 2004 and 2023, the share of energy from renewable sources in total final consumption roughly tripled.<\/p>\n<p>&nbsp;<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-10433 size-large\" src=\"https:\/\/www.rivistaeco.com\/wp-content\/uploads\/sites\/2\/2025\/10\/stagnaro_Eco-25-8_GRAFICI_eng-1024x675.png\" alt=\"\" width=\"640\" height=\"422\" srcset=\"https:\/\/www.rivistaeco.com\/wp-content\/uploads\/sites\/2\/2025\/10\/stagnaro_Eco-25-8_GRAFICI_eng-1024x675.png 1024w, https:\/\/www.rivistaeco.com\/wp-content\/uploads\/sites\/2\/2025\/10\/stagnaro_Eco-25-8_GRAFICI_eng-300x198.png 300w, https:\/\/www.rivistaeco.com\/wp-content\/uploads\/sites\/2\/2025\/10\/stagnaro_Eco-25-8_GRAFICI_eng-768x506.png 768w, https:\/\/www.rivistaeco.com\/wp-content\/uploads\/sites\/2\/2025\/10\/stagnaro_Eco-25-8_GRAFICI_eng-1536x1012.png 1536w, https:\/\/www.rivistaeco.com\/wp-content\/uploads\/sites\/2\/2025\/10\/stagnaro_Eco-25-8_GRAFICI_eng-600x395.png 600w, https:\/\/www.rivistaeco.com\/wp-content\/uploads\/sites\/2\/2025\/10\/stagnaro_Eco-25-8_GRAFICI_eng.png 2008w\" sizes=\"auto, (max-width: 640px) 100vw, 640px\" \/><\/p>\n<p>&nbsp;<\/p>\n<p>This growth is mainly linked to renewables\u2019 use in electricity generation, which in 2024 reached a record 47%. The reason is simple: unlike sectors such as transport and building heating, renewable electricity technologies are mature and widely deployed. Moreover, thanks to technological progress and large economies of scale, their costs have dropped dramatically over time. The most striking example is photovoltaic panels: their average cost per unit of installed capacity has fallen by about 90% over the past decade.<\/p>\n<p>This spectacular progress is closely tied to the rise of China\u2019s solar industry, which now dominates the global market\u2014producing about 80% of polysilicon, 97% of wafers (the thin silicon slices that make up cells), 85% of cells, and 75% of finished modules. China alone accounts for over 36% of global panel demand. This has prompted mounting calls to impose tariffs or import restrictions on Chinese panels, partly to offset Beijing\u2019s state subsidies.<\/p>\n<p>For European policymakers, this poses a serious dilemma. Not only is China technologically ahead, but any effort to reduce dependence on it would inevitably raise the cost of the green transition. If the transition is the absolute priority, anti-Chinese trade barriers cannot be justified. Conversely, if protecting European production is deemed necessary, then the transition must\u2014at least in this respect\u2014take a back seat.<\/p>\n<h3><strong>The Challenges of Renewables<\/strong><\/h3>\n<p>The relative ease of using renewable sources for electricity generation\u2014compared with other sectors\u2014along with their greater efficiency, explains why the EU has made electrification a goal in itself. For example, producing one megawatt-hour (MWh) of heat from a gas boiler requires burning gas with roughly the same energy content (a little over 1 MWh). Producing that same heat with a heat pump, however, requires only about one-third as much energy (0.3\u20130.4 MWh), much of which can come from climate-neutral sources. This does not necessarily mean that binding electrification targets are the most efficient path\u2014debate continues, for instance, over their use in home heating and transport\u2014but the numbers show why decarbonizing electricity is so crucial for climate goals.<\/p>\n<p>At the same time, renewable use varies widely across EU member states. Differences stem from three main factors: availability of primary resources (such as sun and wind), geography, and social acceptance. Thus, the share of renewables in total power generation ranges from a minimum of 5% in Luxembourg to nearly 90% in Austria and Sweden. Italy, at 38%, sits slightly below the EU average.<\/p>\n<p>In general, the countries that rely most on renewables are those with abundant water resources\u2014since hydro power has the great advantage of being programmable\u2014or those with extremely regular wind patterns. This is particularly true of North Sea wind farms, which can operate at full capacity for about 4,000 hours per year, nearly half of the total 8,760 hours in a year. By comparison, an Italian wind farm typically runs for 2,000\u20132,500 hours annually. In other words, a Danish or German wind turbine produces almost twice as much energy as an Italian one with the same technical characteristics. The investment cost, however, is similar\u2014meaning that each unit of Italian wind energy costs nearly double, or even more when bureaucratic delays are considered.<\/p>\n<p>Topography and territorial characteristics matter as well. Renewables, especially wind and solar, must be built where the resource is most abundant. These are often remote sites, requiring large\u2014and costly\u2014infrastructure to transport electricity from production areas to consumption centers. In Italy, for example, energy must be carried from the South, where it can be abundant, to the North. Moreover, the higher the share of intermittent renewables in a country\u2019s mix, the more the power system must rely on equipment to manage variability, such as pumped-storage hydro and large batteries. Finally, renewable plants are not always welcomed by local communities, as they occupy vast tracts of land. Opposition can arise, often delaying permitting processes and increasing uncertainty and costs.<\/p>\n<h3><strong>Are They Cost-Effective?<\/strong><\/h3>\n<p>Given all this, assessing the impact of renewables on energy prices is no simple task. On the one hand, because of how wholesale electricity markets work, a large presence of renewables tends to lower prices\u2014at least during periods of high production. Indeed, when generation exceeds demand\u2014as in spring, when air conditioners are off but daylight is long and solar output is huge\u2014prices can drop to zero or even turn negative. Across the EU, in 2024 this occurred during 2.8% of the hours in the year, compared with 1.9% the year before. If we include all hours when prices fell below \u20ac5\/MWh, the share rises to 8%.<\/p>\n<p>The problem with such low prices is that they threaten the financing of new renewable investments, since capital costs can no longer be recovered through market revenues.<\/p>\n<p>On the other hand, renewables impose additional system costs, not always reflected in wholesale prices but still borne by consumers. These include the costs of grid reinforcement and managing intermittency, as well as public support mechanisms designed to stabilize revenues. The net balance\u2014whether consumers gain or lose, once lower wholesale prices and higher network and subsidy costs are offset\u2014is an empirical question that varies from country to country.<\/p>\n<h3><strong>The Future of Renewables<\/strong><\/h3>\n<p>In summary, renewables have become a major component of Europe\u2019s power systems and are bound to grow further, driven both by declining costs and by the climate targets the EU has adopted. Yet as their share in the mix rises, their integration becomes more complex, and the costs of making it work increase. What appears as a benefit to consumers\u2014lower wholesale prices\u2014can become a problem for investors, who risk not recovering their costs.<\/p>\n<p>If decarbonization goals are to be maintained or strengthened, financial support mechanisms will have to continue\u2014inevitably reflected in electricity bills.<\/p>\n<p>In this context, Europe\u2019s policymakers will soon have to answer several key questions. The first is whether to keep a dedicated renewables target or to group them with other low-emission sources such as nuclear\u2014an approach advocated by France and recently met with some openness from Germany. Choosing the first path would require member states to focus on developing wind, solar, and hydro regardless of their natural endowments; the second would offer more flexibility, allowing countries to include nuclear in their mix.<\/p>\n<p>The EU must also decide whether uniform targets for all states still make sense, or whether more favorable conditions for some should be allowed to offset others\u2019 disadvantages.<\/p>\n<p>From a technical standpoint, the future of renewables will increasingly depend on batteries, which can mitigate intermittency. Their costs are falling dramatically\u2014almost as fast as solar costs did\u2014but their performance improvements are slower.<\/p>\n<p>Further renewable growth is easy to predict, if not inevitable. What remains uncertain is how it will happen\u2014through what combination of public support, technological innovation, and revised EU objectives.<\/p>\n<p>&nbsp;<\/p>\n<p><em>Carlo Stagnaro is Director of Research and Studies at the Istituto Bruno Leoni. His latest book is Capitalismo di guerra. Perch\u00e9 viviamo gi\u00e0 dentro un conflitto globale permanente (e come uscirne), written with Alberto Saravalle and published by Fuoriscena.<\/em><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Renewable sources now play a highly significant role in Europe\u2019s electricity generation\u2014and that role will continue to grow, since the European Union, as part of [&hellip;]<\/p>\n","protected":false},"author":10153,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1],"tags":[],"coauthors":[254],"class_list":["post-10437","post","type-post","status-publish","format-standard","hentry","category-non-categorizzato"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>How to Renew Renewables - Rivista Eco<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"http:\/\/www.rivistaeco.com\/en\/2025\/10\/20\/how-to-renew-renewables\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How to Renew Renewables - 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