NextGen Power: Solar to Transform Europe’s Energy Mix
Solar costs have plummeted by 80% since 2010, which is game-changing for power markets as it removes the main obstacle preventing renewables from dominating the energy mix: the cost of energy from large-scale PV plants is now lower than that of conventional fossil fuel plants.
The economics for solar are particularly compelling in Spain, which Goldman Sachs Research considers the precursor of a structural trend that’s likely to spread across major markets globally. Improved economics, in conjunction with the rise in corporate offtakes (PPAs) and potentially higher EU 2030 renewable targets, could accelerate the process beyond consensus expectations. Goldman Sachs Research forecasts that this structural shift will disrupt legacy generation, and see a sizeable c.15%-40% earnings risk by 2030E for the most exposed names across Europe.