̽��ֱ�� of Cambridge - Laura Diaz Anadon

Electricity prices across Europe to stabilise if 2030 targets for renewable energy are met

fpjl2 — Mon, 03 Feb 2025 10:24:42 +0000

Hitting the current national 2030 quotas for solar and wind energy could reduce the volatility of electricity markets by an average of 20% across 29 European countries, according to a new study from the ̽��ֱ�� of Cambridge.

̽��ֱ��intensity of spikes in power prices are predicted to fall in every country by the end of the decade if commitments to green energy are met, as natural gas dependency is cut.

̽��ֱ��UK and Ireland would be the biggest beneficiaries, with 44% and 43% reductions in the severity of electricity price spikes by 2030, compared with last year.

Germany could experience a 31% decline in electricity price volatility, with the Netherlands and Belgium seeing price spikes ease by 38% and 33% respectively.

̽��ֱ��simulations conducted for the new study show that scaling up renewable energy minimises the market impact of fluctuations in natural gas price – increasing stability even when considering the reliance of renewable technologies on weather.

Some EU leaders and energy ministers have called for renewables targets on grounds of energy security as well as decarbonisation, particularly since Putin’s war on Ukraine stemmed the flow of Russian gas.

̽��ֱ��study, published in the journal Nature Energy, calculates in detail how such aims would affect the volatility of wholesale electricity prices in energy markets across Europe.

“ ̽��ֱ��volatility of energy prices is a major cause of damage to national economies,” said Laura Diaz Anadon, the ̽��ֱ�� of Cambridge’s Professor of Climate Change Policy.

“Consumers are still reeling from sharp increases in electricity prices brought about by natural gas shortages following Russia’s invasion of Ukraine,” said Anadon. “We show that hitting renewables targets reduce the likelihood of such price spikes in the future.”

Daniel Navia, a researcher with the ̽��ֱ��’s Centre for Environment, Energy and Natural Resource Governance (CEENRG), said: “Meeting renewable energy targets is not only good for carbon neutrality, but we can see it is a boost to economic resilience”

“We had probably underestimated how costly energy price shocks are to our societies, and the last crisis has been a stark reminder.”

̽��ֱ��Cambridge researchers used the ̽��ֱ��’s high performance computing facilities to model a wide range of factors – from fluctuations in weather patterns and energy demands to fuel capacity – to map the current and future grids of all 27 EU nations plus the UK and Switzerland.

They assessed electricity markets in 2030 based on the commitments to renewables as stated in each nation’s national energy and climate plan.

“ ̽��ֱ��UK in particular is projected to see major benefits to its energy market stability from renewables,” said Anadon.

“ ̽��ֱ��UK has struggled with its exposure to gas prices due to a lack of energy storage and limited connections to the European grid. This has led to more hours where electricity prices are set by natural gas.”

̽��ֱ��research also suggests that wholesale prices of electricity could fall by over a quarter on average across all countries in the study by decade’s end if they stick to current national renewables targets.

Again, populations in the UK and Ireland stand to gain significantly, with electricity prices predicted to fall by around 45% by 2030, compared with the current situation.

Several of the Nordic nations could see over 60% reductions in electricity costs by 2030, while in Germany the price is predicted to fall by 34%, with Belgium seeing a similar drop of 31%. ̽��ֱ��study suggests the Netherlands could see the price of electricity fall by 41%.

While the study’s authors caution that trends in electricity prices depend on factors that are “impossible to predict”, they say their results are in line with recent outputs by institutions such as the International Energy Agency.

In fact, Navia and Anadon say their modelling may even underestimate the potential for electricity price stability across Europe, as the projections were calculated using data from 1990-2021 – before the energy crisis created by Russia’s attack on Ukraine.

“It makes sense to think about renewables as a security investment, and if we lose the momentum towards green energy, we are clearly harming the climate, but we also exposing ourselves to unknowable risks down the line,” said Anadon.

̽��ֱ��new study also charts the effects on electricity prices if countries overshoot on renewables. If Europe exceeds its renewable energy goals by 30%, electricity prices could become 50% less sensitive to natural gas, compared to just meeting renewables targets.

However, the study suggests there are tipping points where renewables cause the price of power to fall so far that it stops providing sufficient return on investment, and the green energy industries may stall.

Added Navia: “If we are to fully utilise solar and wind as a security tool, Europe might have to rethink how its energy markets are designed, and what incentives it can offer the private sector to maintain the societal insurance value it gets from renewable energy.”

National targets for solar and wind power will see reliance on natural gas plummet, reducing electricity price volatility across Europe, with major beneficiaries including the UK and Ireland, the Nordics, and the Netherlands.

̽��ֱ��UK in particular is projected to see major benefits to its energy market stability from renewables

Laura Diaz Anadon

Anton Petrus via Getty images

High voltage electricity towers combined with economic charts

̽��ֱ��text in this work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License. Images, including our videos, are Copyright © ̽��ֱ�� of Cambridge and licensors/contributors as identified. All rights reserved. We make our image and video content available in a number of ways – on our main website under its Terms and conditions, and on a range of channels including social media that permit your use and sharing of our content under their respective Terms.

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̽��ֱ��price of ecological breakdown

fpjl2 — Mon, 07 Oct 2024 23:00:00 +0000

Cambridge researchers are investigating the economic consequences of climate change and biodiversity loss, and identifying ways to drive a more sustainable global economy.

Policies for People and Planet

plc32 — Wed, 06 Dec 2023 17:05:17 +0000

Cambridge Zero symposium gathers researchers to examine the rules and incentives needed to combat climate change.

Carbon-omics and global health

plc32 — Fri, 17 Nov 2023 12:05:53 +0000

Cambridge Zero to host two research symposia to discuss critical climate change challenges

Insulation only provides short-term reduction in household gas consumption

fpjl2 — Sun, 01 Jan 2023 09:52:05 +0000

Insulating the lofts and cavity walls of existing UK housing stock only reduces gas consumption for the first year or two, with all energy savings vanishing by the fourth year after a retrofit, according to research from policy experts at the ̽��ֱ�� of Cambridge.

̽��ֱ��latest study is the first to track in detail household gas use across England and Wales for at least five years both before and after insulation installation.

Researchers analysed gas consumption patterns of more than 55,000 dwellings over twelve years (2005-2017), and found that cavity wall insulation led to an average 7% drop in gas during the first year. This shrank to 2.7% in the second, and by the fourth year, any energy savings were negligible.

Loft insulation was half as effective as cavity wall, with an initial fall in gas consumption of around 4% on average, dropping to 1.8% after one year and becoming insignificant by the second year. For households with conservatories*, any gains in energy efficiency disappeared after the first year.

̽��ֱ��findings suggests that when it comes to home insulation there may be a significant 'rebound effect': any savings through energy efficiency get cancelled out by a steady increase in energy use.**

̽��ֱ��UK Treasury recently announced some £6 billion in funding to reduce the energy consumption of buildings and industry by 15% over the next eight years, with a major focus on insulation retrofits across the residential sector.

Researchers behind the study, published in the journal Energy Economics, say it is extremely difficult to identify specific causes of the 'rebound effect' they found, but behaviours such as turning up the heating, opening windows in stuffy rooms or building extensions may all contribute.

They argue that good insulation is vital, but any drive to insulate UK homes should be combined with investment in heat pump installation and campaigns to encourage behaviour change if 2030 targets for energy independence are to be met.

To capture the overall effect of insulating homes, the researchers accounted for various factors, including the age and size of buildings, the weather and gas prices.

However, they did find that gas price influenced energy use – so the soaring cost of gas may mean greater energy reductions from insulation now than during the study period. ̽��ֱ��research also found household gas consumption fluctuated less after both loft and cavity wall insulation.

“ ̽��ֱ��recent spotlight on increasing the energy efficiency in UK buildings is both welcome and long overdue, and there are very real benefits to households from good insulation, not least in terms of health and comfort,” said study co-author Prof Laura Diaz Anadon, Director of the Cambridge Centre for Environment, Energy and Natural Resource Governance.

“However, home insulation alone is not a magic bullet. High gas prices will reduce the rebound effect in the short term, as homeowners have the need to keep costs down at the front of their minds. In the long term, simply funding more of the same insulation roll-out to meet the UK’s carbon reduction and energy security targets may not move the dial as much as is hoped.”

Anadon and her Cambridge co-author Dr Cristina Penasco say that insulating old and draughty housing across the UK is a vital step, but argue that not encouraging homeowners to “fully degasify heating” while going through the disruption of a retrofit is a missed opportunity.

Heat pumps, which extract warmth from outside to heat internal radiators, are highly efficient and negate the need for gas boilers. Recent research suggests the UK lags behind many other European countries on heat pump sales, and the UK Committee on Climate Change has also highlighted the need to speed up heat pump deployment.

“When trying to get middle income households to conduct energy renovations, as the government are currently doing, it makes sense to further encourage heat pump installation at the same time," said Penasco, the study’s first author from Cambridge’s Department of Politics and International Studies.

“This could be through incentives such as more generous and focused grant schemes, as well as obligations for boiler manufacturers and additional investments in skills for installers.”

“We found that energy efficiency retrofits are often combined with home improvements that actually increase consumption, such as extensions.”*** Scotland currently offers grants and interest free loans for heat pumps, while the rest of the UK has reduced VAT in the form of a tax rebate.

Residential housing accounted for almost a third (29.5%) of the UK’s total energy consumption in 2020, according to the International Energy Agency. In the UK, 85% of households use gas as their main heating source.

̽��ֱ��study used data collected by the UK’s Department of Energy and Climate Change, and compared energy use in individual households before and after insulation, as well as comparing households that did have efficiency renovations with those that did not.

Researchers found that, compared to wealthier areas, households in more deprived areas had half the reductions in gas use: an average of 3% during the first and second year after insulation. Neighbourhoods where deprivation was highest had the lowest reduction in gas consumption.

“Households in more deprived areas often have to limit energy use, so any savings created by home insulation can quickly get redirected into keeping a house warmer for longer,” said Penasco

“This is a good outcome if policies are aimed at reducing fuel poverty in low-income households, but will not help with the UK’s emissions reductions targets or reliance on gas.” In fact, when it came to household income, those in the bottom 20% increased gas consumption straight after insulation.

“National caps on gas prices will not incentivise people to conserve energy,” said Penasco, who argues that energy reduction targets could be set for individual households, and associated with waivers on energy bills in the long run, particularly for low income households.

Added Anadon: “People do not deliberately squander energy savings. There is a need for education to lessen the rebound effect we have documented. Media appearances by ministers to discuss flow temperatures of boilers are positive signs that parts of the government are starting to think about this.”

*Conservatories are one of the most popular home improvements in the UK. Data from 2011 suggests that almost 20% of households in England had some form of conservatory, and 80% of those had some form of heating.

** ̽��ֱ��'rebound effect' is a fundamental concept in economics, and was first identified by William Jevons in 1865, when he observed that more efficient steam engines increased rather than reduced coal use, as engines were put into more widespread use.

*** Previous research suggests that extensions in the UK increase household energy consumption by 16% on average.

For more information on energy-related research in Cambridge, please visit Energy IRC, which brings together Cambridge’s research knowledge and expertise, in collaboration with global partners, to create solutions for a sustainable and resilient energy landscape for generations to come.

First study to look at long-term effect of home insulation in England and Wales finds fall in gas consumption per household was small and only lasts a few years.

We found that energy efficiency retrofits are often combined with home improvements that actually increase consumption, such as extensions

Cristina Penasco

Getty images

Man installing loft insulation

̽��ֱ��text in this work is licensed under a Creative Commons Attribution 4.0 International License. Images, including our videos, are Copyright © ̽��ֱ�� of Cambridge and licensors/contributors as identified. All rights reserved. We make our image and video content available in a number of ways – as here, on our main website under its Terms and conditions, and on a range of channels including social media that permit your use and sharing of our content under their respective Terms.

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Competition with China a ‘driving force’ for clean energy funding in the 21st century

fpjl2 — Mon, 12 Sep 2022 15:46:03 +0000

̽��ֱ��first major study of driving forces behind government funding of energy RD&D – and the public institutions generating it – over the 21st century shows that competition created by China’s rise as a technology superpower led to significant increases in clean energy investment.

̽��ֱ��new study, led by ̽��ֱ�� of Cambridge and ̽��ֱ�� of California, Berkeley, and published in the journal Nature Energy, also finds that cooperation commitments at a UN climate conference were not just empty words, and did boost 'cleantech' innovation, albeit a long way off levels required to hit net zero or prevent two-degree warming.

̽��ֱ��research covers eight major economies – Germany, France, US, UK, Korea, India, China and Japan – in the years between 2000 and 2018, and finds that total energy funding among seven of these (excluding India) grew from $10.9 billion to $20.1 billion, an 84% increase.

̽��ֱ��share of RD&D (research, development and demonstration) funding for clean technologies – from solar and wind to efficient energy storage – across these seven economies went from 46% to 63% during the first 18 years of this century.

However, it came at the expense of nuclear energy investment, which fell from 42% to 24%, while fossil fuel funding remained 'sticky' and relatively unchanged – propped up by huge increases in fossil fuel RD&D spending from China (over $1.5 billion from 2001 to 2018).

“Levels of investment in clean energy have yet to come close to achieving meaningful global decarbonisation,” said Prof Laura Diaz Anadon from the ̽��ֱ�� of Cambridge, a corresponding author on the study.

“Annual government funding for energy RD&D needed to have at least doubled between 2010 and 2020 to better enable future emissions cuts in line with the two-degree Celsius goal,” Anadon said.

Prof Jonas Meckling, study first author from the ̽��ֱ�� of California, Berkeley, said: “Our research reveals the drivers of clean energy investment that had most impact in the 21st century. A mix of cooperation and competition between nations, and a strategic shift towards commercialisation, led to advances that policymakers must build upon.”

Many consider high oil prices a key incentive for government spending on energy innovation as alternatives are sought, such as in the 1970s. Yet the study shows clean energy RD&D continued to grow despite declining oil costs after 2008, leading researchers to assess other possible 'drivers' of cleantech investment this century.

̽��ֱ��research team conducted their analysis by creating two datasets. One tracked RD&D funding from China, India and the member countries of the International Energy Agency.

̽��ֱ��other inventoried 57 public institutions working on energy innovation across eight major economies. These include agencies that fund energy tech such as ARPA-E in the US, the Carbon Trust in the UK, and India’s National Institute of Solar Energy.

̽��ֱ��study found intensifying competition in clean energy markets created a 'cumulative' investment boost across major economies – primarily driven by China, which grew cleantech RD&D spending at double-digit rates every year (bar one) between 2003 and 2014.

As original solar and wind industries in the US and Europe fought to keep up, an analysis of government reports conducted for the study shows RD&D pushes in major economies were increasingly justified by referencing competitive threats from China. This included US investments post-2008 crash, Germany’s push into electric vehicles, and the EU Green Deal.

̽��ֱ��study pinpoints 2014 as the year China became a major player in cleantech across a range of areas, accelerating a gradual shift towards clean energy commercialisation and economic strategy that had already begun in other countries.

For example, after 2014, public RD&D institutions across the eight economies with a stated goal of “competitiveness and economic growth” increased by 14 percentage points.

In addition, some 39% of RD&D institutions ran as government-business partnerships before 2014, but increased focus on commercialisation with the rise of China saw this jump to 63% of institutions established or repurposed from 2015 onwards.

“Competition with China helped grow some clean technologies, but stymied others,” said Anadon. “Research and development for onshore wind increased in major economics when Chinese firms entered the market. However, cleantech that was easily shippable, such as solar PV, suffered from intense Chinese investment that eliminated international competitors.”

“Competition is only half the battle, we also need global cooperation,” she said.

̽��ֱ��study shows the “Mission Innovation” – a global initiative to boost cleantech development announced at COP21 in 2015 by President Obama, and backed by 20 nations including China and India – failed to double clean energy RD&D spending by 2020, a stated aim.

However, it did lead to significant increases in RD&D for new clean and nuclear energy in the eight major economies for at least three years following launch, with government documents explicitly referencing Mission Innovation as the rationale for expanding clean energy funding.

̽��ֱ��team also investigated how this century’s crises influenced RD&D. Stimulus packages following the 2008 financial crash and COVID-19 pandemic did little for new clean energy efforts, instead typically boosting RD&D funding for “incumbent” energy: fossil (including carbon capture and storage) and nuclear.

“Unlike the financial crash and pandemic, Russia’s war on Ukraine has caused an international crisis with energy at its core,” Anadon added. “This could lead to a global shift in government policies that harness both competition and cooperation to boost clean energy investment, such as a trade club for climate goods.”

Analysis of energy RD&D investment in major economies also found that commitments at COP21 yielded some positives. Ultimately, however, trends over this century are not consistent with the ‘cleantech’ funding levels needed to meet climate goals, say researchers.

Competition is only half the battle, we also need global cooperation

Laura Diaz Anadon

Darmau Lee

Solar panels in Dunhuang, Gansu, China

Yes

Rapid transition to a net zero world

cg605 — Thu, 28 Oct 2021 11:32:49 +0000

̽��ֱ��opportunity to make real and lasting change has never been greater. But we all need to act, and act now.

Low-carbon policies can be ‘balanced’ to benefit small firms and average households – study

fpjl2 — Mon, 18 Jan 2021 14:51:25 +0000

Some of the low-carbon policy options currently used by governments may be detrimental to households and small businesses less able to manage the short-term costs of energy price hikes, according to a new study.

However, it also suggests that this menu of decarbonising policies, from quotas to feed-in tariffs, can be designed and balanced to benefit local firms and lower-income families – vital for achieving ‘Net Zero’ carbon and a green recovery.

̽��ֱ�� of Cambridge researchers combed through thousands of studies to create the most comprehensive analysis to date of widely used types of low-carbon policy, and compared how they perform in areas such as cost and competitiveness.

̽��ֱ��findings are published today in the journal Nature Climate Change. ̽��ֱ��researchers also poured all their data into an interactive online tool that allows users to explore evidence around carbon-reduction policies from across the globe.

“Preventing climate change cannot be the only goal of decarbonisation policies,” said study lead author Dr Cristina Peñasco, a public policy expert from the ̽��ֱ�� of Cambridge.

“Unless low-carbon policies are fair, affordable and economically competitive, they will struggle to secure public support – and further delays in decarbonisation could be disastrous for the planet.”

Around 7,000 published studies were whittled down to over 700 individual findings. These results were coded to allow comparison – with over half the studies analysed “blind” by different researchers to avoid bias.

̽��ֱ��ten policy “instruments” covered in the study include forms of investment – targeted R&D funding, for example – as well as financial incentives including different kinds of subsidies, taxes, and the auctioning of energy contracts.

̽��ֱ��policies also include market interventions – e.g. emissions permits; tradable certificates for clean or saved energy – and efficiency standards, such as those for buildings.

Researchers looked at whether each policy type had a positive or negative effect in various environmental, industrial and socio-economic areas.

When it came to “distributional consequences” – the fairness with which the costs and benefits are spread – the mass of evidence suggests that the impact of five of the ten policy types are far more negative than positive.

“Small firms and average households have less capacity to absorb increases in energy costs,” said co-author Laura Diaz Anadon, Professor of Climate Change Policy.

“Some of the investment and regulatory policies made it harder for small and medium-size firms to participate in new opportunities or adjust to changes.

“If policies are not well designed and vulnerable households and businesses experience them negatively, it could increase public resistance to change – a major obstacle in reaching net zero carbon,” said Anadon.

For example, feed-in tariffs pay renewable electricity producers above market rates. But these costs may bump energy prices for all if they get passed on to households – leaving the less well-off spending a larger portion of their income on energy.

Renewable electricity traded as ‘green certificates’ can redistribute wealth from consumers to energy companies – with 83% of the available evidence suggesting they have a “negative impact”, along with 63% of the evidence for energy taxes, which can disproportionately affect rural areas.

However, the vast tranche of data assembled by the researchers reveals how many of these policies can be designed and aligned to complement each other, boost innovation, and pave the way for a fairer transition to zero carbon.

For example, tailoring feed-in tariffs (FiTs) to be “predictable yet adjustable” can benefit smaller and more dispersed clean energy projects – improving market competitiveness and helping to mitigate local NIMBY-ism.

Moreover, revenues from environmental taxes could go towards social benefits or tax credits e.g. reducing corporate tax for small firms and lowering income taxes, providing what researchers call a “double dividend”: stimulating economies while reducing emissions.

̽��ֱ��researchers argue that creating a “balance” of well-designed and complementary policies can benefit different renewable energy producers and “clean” technologies at various stages.

Government funding for research and development (R&D) that targets small firms can help attract other funding streams – boosting both eco-innovation and competitiveness. When combined with R&D tax credits, it predominantly supports innovation in startups rather than corporations.

Government procurement, using tiered contracts and bidding, can also improve innovation and market access for smaller businesses in “economically stressed” areas. This could aid the “levelling up” between richer and poorer regions as part of any green recovery.

“There is no one-size-fits-all solution,” said Peñasco. “Policymakers should deploy incentives for innovation, such as targeted R&D funding, while also adapting tariffs and quotas to benefit those across income distributions.

“We need to spur the development of green technology at the same time as achieving public buy-in for the energy transition that must start now to prevent catastrophic global heating,” she said.

Peñasco and Anadon contributed to the recent report from Cambridge Zero – the ̽��ֱ��’s climate change initiative. In it, they argue for piloting a UK government research programme akin to ARPA in the US, but focused on new net-zero technologies.

Prof Laura Diaz Anadon is Director of Cambridge’s Centre for Environment, Energy and Natural Resource Governance (C-EENRG). ̽��ֱ��review was also co-authored by Prof Elena Verdolini from the RFF-CMCC European institute on Economics and the Environments (EIEE) and the Euro-Mediterranean Centre on Climate Change and ̽��ֱ�� of Brescia. Anadon and Verdolini lead part of the EU project INNOPATHS that funded the research.

A review of ten types of policy used to reduce carbon suggests that some costs fall on those less able to bear them – but it also shows these policies can form the bedrock of a ‘green recovery’ if specifically designed and used in tandem.

Unless low-carbon policies are fair, affordable and economically competitive, they will struggle to secure public support

Cristina Peñasco

Thomas Richter

Wind turbines

Yes