Renewables Prices, markets & analysis
At ICIS, we report monthly on the European renewable markets, provides readers with the latest price assessments, commentary and market-related news.
Our coverage offers readers essential insights on the clean energy market – an area that is quickly developing as governments across Europe continue to tighten regulations.
Renewables Overview Transcript
The renewable energy sector across Europe has grown from occupying a small sliver of the power-generation-mix pie chart a decade ago, to occupying a substantial chunk today.
It’s importance on the energy supply market has been even greater than its share of the supply mix would suggest.
Governments right across the continent have moved to develop renewable energy sectors, driven by European Union legislation, for a number of reasons.
Firstly, it is widely accepted that a diversified power generation mix is a vital facet of energy security.
Secondly, renewable power generation is cheaper than more traditional forms of production, because the fuel -- that’s the wind, the sun or the movements of the tide is -- free.
Thirdly, over fears of what the mass-release of carbon in to the atmosphere as a result of burning fossil fuels may be doing to our climate.
Now the impact of the sector on the energy markets has been huge. Markets have had to largely feel their way along as the technology has evolved fast to the level of full-scale commercial deployment. And many renewable sources of renewable generation, are by their very nature intermittent. Therein lies the challenge for the market; how to ensure energy security 100% of the time at an affordable price, while simultaneously cutting carbon emissions.
The energy markets have evolved very much in line with the growth of renewables but the sector, and the wider market itself, still has much further to go.
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Renewables: Market overview
The value of clean electricity in the UK has been dropping of late, with wind power generation pushing strong volumes of renewables obligation certificates (ROCs) for the ongoing compliance period (CP12) into the market.
The rollover to CP13, which began from 1 April, could bolster prices going into the second quarter of 2014. This is because suppliers will be obliged to hold enough ROCs to cover 24.4% of electricity volumes supplied through to April 2015, up from 20.6% in CP12.
However, with consumption of electricity relatively low on a long-term basis, ROC values may struggle to claw back towards previous, historically higher, levels.
Elsewhere in Europe, the Nordic market for elcertificates is unlikely to witness a sustained period of strength in coming months, with supply likely to be boosted and prices set to respond to strong wind generation levels. The market also has to contend with the summer lull in buying activity amid the holidays. This combination of factors is likely to weigh on the prompt and curve prices.
Updated to mid-April 2014
News & analysis
Renewables news & analysis
ICIS price assessments are based on information gathered from a wide cross-section of the market, comprising consumers, producers, traders and distributors from more than 250 reporters world-wide. Confirmed deals, verified by both buyer and seller, provide the foundation of our price assessments.
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European Clean Energy Markets (ECEM) Methodology
Renewable power is electricity generated through harnessing an inexhaustible source, such as wind, solar rays, the energy in crops, river flows , or tidal movements.
It is different from fossil-fuels because oil, coal and gas are all finite resources, and are being exhausted at a far greater rate for the production of energy than that at which nature can replenish them.
Nations the world over have recognised the value of generating power from renewable sources as they look to maintain long-term supply security while cutting reliance on fossil-fuel fired power generation, the cost of which – unlike renewable power – is at the mercy of volatile global markets.