Electric power derived from renewable sources in Europe will achieve a compound annual growth rate (CAGR) of 8.6 percent in 2013-2020 and serve as one of the key drivers for an expected transformation of the local electricity system, according to GlobalData. For coal-fired power the CAGR by the end of the decade is forecast at 3.7 percent.
The consulting company revealed findings of a new report, which says that rising power demand, Europe's carbon emissions reduction goals, renewables investments, especially in wind and solar, and the development of more and more advanced power transmission and distribution (T&D) technologies are transforming the continent's electricity.
The researcher is observing a shift from monopolized and concentrated ownership in the power generation segment to "a competitive and liberalized environment" that involves micro-generation plants and unbundled electricity systems, among others.
Already a number of European countries are engaged in demonstration projects related to the use of distributed generation and smart grids. Still, there are many challenges on the horizon such as issues with grid-connection, a lack of curtailment regulations, compensation issues and a projected increase in curtailment in the future.
"Despite increased funding and support for smart grid demonstrations, along with more investment in renewable energy sources and a decline in coal-fired generation, it is too early to predict the fall of the large centralized electricity systems and the start of a new era of distributed generation," said Sameer Joshi, GlobalData research head.