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Maintaining the Power Balance in Europe

3-31, 2014 / By MUST Power

Change is sweeping the European power industry as the integration of renewables gains pace. How Europe eventually navigates through these dramatic changes will fascinate power decision makers globally. The debate over whether renewables would form a significant part of the future power generation infrastructure has moved on considerably within the last two years: the question is no longer ‘if’ the transition will take place, but ‘how’ an industry traditionally comprised of large units of coal, gas or nuclear power generation running 24/7 as base load is going to adapt to accommodate it.

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Renewables and low carbon technologies are only going to increase as a proportion of the installed base, yet genuine integration of these onto European grids has been relatively slow and the practical implications of this industry transformation are becoming ever more evident. Moreover, many European nations are actually burning more coalnow than they have been in recent years, due largely to the drop in coal prices relative to gas prices (the shale boom in the US leading to a flood of cheap coal on world markets) and also because the collapse of the EU’s emissions trading scheme has enabled nations to rely more heavily on older, less clean and efficient coal plants still in operation.

As such, Europe is struggling both on the delivery of its clean energy goal and the provision of affordable power. Although the debate surrounding the recent price hikes by large utilities in countries such as the UK and Germany is somewhat ill-informed and politicised, there is no doubt that consumers are feeling the pain and all indicators are that this may get worse before it gets any better.