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Rystad:Gas prices in Europe will be 10 times higher than solar PV in Near Future

11-3, 2022 / By MUST Power

According to research by Rystad Energy, the cost of operating gas-fired power plants in Europe will be 10 times higher than the cost of building new solar PV projects in the next few years.

From the research,high gas prices, market challenges and lower renewable energy costs all suggest that, in the medium to long term, Europe’s main source of electricity will no longer be gas

Its research based on a comparison of the levelized cost of electricity (LCOE) of natural gas versus solar PV and wind. Gas will struggle to remain competitive in Europe’s electricity landscape, study shows

Natural gas prices have risen from an average price of €46/MWh ($45.8/MWh) in 2021 to €134/MWh ($134/MWh) in 2022, a surge of 189%. Still, gas-fired power generation rose 4% in the first seven months of the year, in part due to a 100TWh decline in nuclear and hydropower generation in 2022. The situation is not expected to improve this winter, and natural gas is needed to maintain power supply through 2023.

Rystad predicts that more than 100GW of renewable energy capacity could be developed if funds used to maintain gas-fired power generation are repurposed, and 333GW of capacity by 2028 if funds originally used for gas-fired power generation are available. Such a high capacity is enough to generate 663TWh of electricity.

The forecasts are based on repurposing funds originally planned for natural gas, and build on Rystad Energy’s forecast , more than 2TW of solar and wind installed by 2050, and 520GW of large-scale project batteries.

Rystad said, gas was still needed to support the intermittent nature of renewable power generation ,and remained vital to Europe’s electricity mix until adequate infrastructure was in place.

However, cause of an uncertain and expensive future of natural gas, it is important for European power companies to rapidly develop renewable energy. While the European Commission has approved solar manufacturing measures and instituted energy security policies, economic and market forces can drive development faster.