According to the latest report from Aurora Energy Research, Europe needs €600 billion in investments by the end of this decade, rising to €1.5 trillion by mid-century, to support the continent’s renewable energy expansion.
According to analysis by Aurora Energy Research, more than 1 TW of renewable capacity is currently waiting for grid connection across Europe.
The global energy markets analytics provider says permit periods in some European markets are reaching up to ten years, adding to the growing pipeline. Of the 1 TW of projects awaiting approval, Italy accounts for around 370 GW.
The find is part of the second edition of Aurora’s European Renewable Energy Sources Market Overview Reportadding that Europe needs around €1.5 trillion in cumulative investments by 2050 to support the expansion of renewable energy, which is expected to more than triple between now and mid-century.
The report adds that almost €600 billion in investments will be needed by the end of this decade. It predicts that subsidies and power purchase agreements (PPA) will remain the dominant routes to market in the near term, but notes that their attractiveness varies by country and technology.
Jörn Richstein, Aurora’s research leader in Pan European Power Markets, Policies & Technologies, explained that PPAs are playing an increasingly central role in Europe’s renewable energy growth, especially in countries without viable subsidy schemes, or in countries fueled by rising corporate demand. “Innovative and flexible PPA contracts will be critical to meeting the changing needs of both business buyers and energy producers,” Richstein predicted.
Aurora’s report expects that two-sided contracts for difference will remain the main support mechanism in most European markets, with 162 GW of renewable energy capacity already announced for auction tenders by 2030, but warns that the success of these auctions will depend on design, level of competition and policy certainty.
The research shows that negative energy prices, electricity grid congestion and permit delays are the main risks to European investments in renewable energy sources.
Negative energy prices in 2025 exceeded 2024 levels in most European markets, Aurora research showed, and coincided with the rollback of subsidy protection against negative prices in some markets. Aurora predicts that negative prices will decrease after 2035 as electricity demand increases, system flexibility improves and price-insensitive subsidies are phased out.
Cited as another problem, Aurora expects technical restrictions to rise to almost 22 TWh in Britain, Spain and Italy alone by 2030, compared to 10 TWh across Europe last year.
Sameer Hussain, senior research analyst at Aurora Energy Research, explained that record levels of negative prices and increasing cuts are putting significant pressure on the profitability of renewables in Europe. “To protect returns in this more unpredictable landscape, developers must adapt – by investing in technology innovation, diversifying their portfolios and integrating battery energy storage solutions,” Hussain added.
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