Whilst the top-level 40% 2030 emissions reduction target looks relatively safe, share from RES is definitely not. Carbon pricing, in its various forms, is working but, frankly, not in a predictable or even desirable way. A closer inspection of the market-driven EU ETS permit scheme illustrates how and why gas – especially American LNG – is going strong, putting the 32% share of final energy consumption from renewables in doubt.
Whenever European energy industry dialogues touch on market volatility, much of the obsession seems to be on oil and gas prices, reduction in coal usage, security of supply and the fundamental renewable versus conventional power cost implication.
But away from consumer scrutiny, the driving mechanism in an inexorable pan-European march to a low-carbon future that, to some extent, links all of the above, is equally volatile – the European Union’s carbon permit pricing scheme. The concept has been around since 2005 and is pretty simple to fathom, but its pricing and dynamics are anything but…
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