How Recent Blackouts Threaten the Viability of Renewable Energy Projects

The European and domestic markets fear further deterioration in the commercial viability of renewable energy projects due to recent events across Europe. The recent blackouts in Spain, Portugal, parts of France, and North Macedonia have prompted a reevaluation of the parameters governing grid operations. In response, Spanish authorities have rushed to add approximately 2 GW of natural gas units to their daily electricity mix to enhance stability. This increased reliance on gas is displacing renewable energy sources, particularly solar power. Green units are already facing significant production cuts due to low demand, compounded by forced reductions in their share of the energy mix. Questions arise about whether Greece’s ADMIE will implement similar measures as renewables penetration approaches 80% by the end of this decade. Market estimates predict at least 20-25% cuts by 2030, even with added storage units, as installations may exceed national targets. While no immediate restrictive actions seem forthcoming, Greece’s grid operator has taken steps to reinforce the network conservatively. Past issues in Greece were handled effectively, but the market closely monitors international developments, especially regional ones. Cross-border connections play a critical role in managing emergencies; thus, one country’s unpreparedness could impact another. These complexities highlight the challenges grid operators face in modernizing the electricity system.