The winter of 2024-2025 served as a further stark reminder of the structural vulnerabilities behind the novel European framework for energy security, affordability, and accessibility. Despite the absence of unusually cold temperatures and the persistence of subdued energy demand – attributable to a still-recovering industrial manufacturing sector – natural gas storage levels experienced a substantial drawdown of 66% relative to 1 November 2024. Elevated levels of inventories at the start of the last winter season (1,094 TWh, the third-highest absolute value of the last decade) and in line with the storage refill provisions of the EU’s Natural Gas Storage Regulation were not enough to cushion from significant increases of Natural Gas wholesale prices. Particularly pronounced stocks declines were observed in Germany (–71%), the Netherlands (–76%), and France (–74%). This paper contends that the rapid and, arguably, uncoordinated expansion of intermittent Renewable Energy Sources (FERI) across interconnected national electricity markets – most notably in Germany and the Netherlands – represents a primary contributing factor to a now apparent structural fragility within the entire EU’s electricity system. This fragility manifests in heightened volatility in wholesale electricity prices and growing inconsistencies in the availability of power volumes across the continent. Of particular concern is that these developments occurred during a winter characterized by neither extreme cold nor exceptional industrial and manufacturing demand, thereby underscoring the systemic nature of the issue. The increasing reliance on the now relatively smaller natural gas–fired power generation capacity to compensate for unforeseen shortfalls in the now larger intermittent renewable output relative to domestic electricity consumption (>50% in the case of Germany) has intensified the exposure of European power systems to the global liquefied natural gas (LNG) market, from which nearly one-third of the EU’s annual gas imports are now sourced. The result is a significant upward pressure on electricity prices in the context of declining and constrained power supply in domestic markets during periods of renewable generation deficit.
De Giorgio, D., Too Much of a Good Thing? The Case of Renewable Energy in Europe. An Analysis of Winter 2024-2025, <<MERCATO CONCORRENZA REGOLE>>, 2025; XXVII (1): 79-116. [doi:10.1434/118211] [https://hdl.handle.net/10807/325661]
Too Much of a Good Thing? The Case of Renewable Energy in Europe. An Analysis of Winter 2024-2025
De Giorgio, Domenicantonio
Primo
Writing – Original Draft Preparation
2025
Abstract
The winter of 2024-2025 served as a further stark reminder of the structural vulnerabilities behind the novel European framework for energy security, affordability, and accessibility. Despite the absence of unusually cold temperatures and the persistence of subdued energy demand – attributable to a still-recovering industrial manufacturing sector – natural gas storage levels experienced a substantial drawdown of 66% relative to 1 November 2024. Elevated levels of inventories at the start of the last winter season (1,094 TWh, the third-highest absolute value of the last decade) and in line with the storage refill provisions of the EU’s Natural Gas Storage Regulation were not enough to cushion from significant increases of Natural Gas wholesale prices. Particularly pronounced stocks declines were observed in Germany (–71%), the Netherlands (–76%), and France (–74%). This paper contends that the rapid and, arguably, uncoordinated expansion of intermittent Renewable Energy Sources (FERI) across interconnected national electricity markets – most notably in Germany and the Netherlands – represents a primary contributing factor to a now apparent structural fragility within the entire EU’s electricity system. This fragility manifests in heightened volatility in wholesale electricity prices and growing inconsistencies in the availability of power volumes across the continent. Of particular concern is that these developments occurred during a winter characterized by neither extreme cold nor exceptional industrial and manufacturing demand, thereby underscoring the systemic nature of the issue. The increasing reliance on the now relatively smaller natural gas–fired power generation capacity to compensate for unforeseen shortfalls in the now larger intermittent renewable output relative to domestic electricity consumption (>50% in the case of Germany) has intensified the exposure of European power systems to the global liquefied natural gas (LNG) market, from which nearly one-third of the EU’s annual gas imports are now sourced. The result is a significant upward pressure on electricity prices in the context of declining and constrained power supply in domestic markets during periods of renewable generation deficit.
I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
