Renewable energy reduces electricity costs

Renewable energy reduces electricity costs

The consistent expansion of wind power, photovoltaics and small hydropower significantly reduces domestic electricity prices throughout the year - at all hours and months.  This is the result of a current analysis by the Viennese consulting company Enervis. In addition, the expansion of renewable energy strengthens independence from gas imports. According to Enervis, without renewables, the annual electricity costs for a household would increase by around 73 euros. For 2030, additional gas imports equal to the current total consumption of all Austrian households would be necessary.

20 percent less

The study analyzes the electricity market development with and without generation from PV, wind and small hydropower for the years 2021 to 2024 and includes a forecast for the year 2030. The result: Without wind power, PV and small hydropower, electricity prices would have been an average of 6 percent higher in the last four years. Without this renewable generation, a price increase of around 20 percent is expected for 2030. “The price-lowering effect of renewables is particularly clear at times when gas prices are high – as was the case most recently in 2022,” says study author Thomas Rosenzopf. “Without renewables, the upward price swing would have been clearly higher during the energy crisis.”

According to Enervis, the price reduction has a clear reason: renewable energies have extremely low variable costs and thus shape the market price. With each additional system, the supply of electricity increases and the supply curve shifts towards cheaper electricity prices - keyword merit order. Fossil power plants – especially imported gas – are increasingly being pushed out of the market. Without renewables, gas import requirements would be 1.8 billion m³ higher in 2030. "That would be just under the current total consumption of all Austrian households (2 billion cubic meters). In industrial terms, this would be three times as much as Voest's annual gas consumption (600,000 cubic meters). This additional gas consumption would also correspond to a quarter of the domestic gas storage facilities," says Enervis.