After some years with cost increases across all technologies, driven by raising raw material prices and interrupted value chains, markets have now turned and show declining costs yet again.
The notable exception is costs for hydrogen projects. Challenges pile up for project developers and short-term profitability seems more challenging than just a few years ago. We follow the observed market trends and adjust our cost assumptions for hydrogen projects considerably upwards.
Installation rates for both onshore and offshore wind are stable. Stable installation rates, however, will not be enough to reach the climate goals. Many targets in the National Energy and Climate Plans (NECP) seem difficult to reach. Land restrictions and public opposition are increasingly problematic in some countries for further development of onshore wind, while offshore wind struggles with sustained high costs and continued need for public financial support.
Solar PV costs have declined considerably in 2024. Consequently, total deployment in Europe has hit a record 66 GW last year. Reports from China about low utilization rates and reduced subsidies, however, point towards a less drastic development in 2025 due to an effort to reduce over-capacity and somewhat slowing demand. Batteries installations continue to surge as average system costs have declined by 20% last year. Coming years will see an increase of average storage duration in battery systems to absorb the increasing over-production of solar PV systems during day-time hours, and reduce price volatility on the day-ahead market.
Twice a year, we publish our report Technology Trends and Insights, where we review recent market developments of critical renewable energy technologies, such as wind power, solar PV, batteries and hydrogen, and their role in the current and future energy system.
We give an overview of important drivers and barriers for these key technologies. The drivers include technical but also political and market related factors. They are viewed in relation to the technologies’ historical and expected cost development. Additionally, we provide our insight into what role we think these technologies will have in the future power system and how this role is supported by innovation and technology development.
If you are interested in learning more about the Technology Trends and Insights report, please do not hesitate to reach out.
