Analysis of Renewable Energy Electricity Prices Based on System Costs

Under the influence of uncertain factors such as the international economic situation and the scarcity of traditional fossil fuels, renewable energy policies in various countries are expected to further diverge, and electricity prices will become more volatile. In light of the European Union's more ambitious 2030 climate goals, investigating the true cost of renewable electricity is crucial for understanding market signals and making informed energy decisions. This study focuses on countries within the EU with a high share of renewable energy, calculates their electricity system costs, and compares them to the EU average to assess whether the rise in electricity prices can be attributed to an increase in system costs per kilowatt-hour. The findings indicate that, due to the high initial investment costs, power producers must charge higher prices to ensure financial balance, which drives the increase in electricity prices. Once the initial fixed costs are spread out, electricity prices reach their peak. As the share of renewables continues to grow, the shutdown of thermal power plants and the uncertainty associated with a high proportion of green energy raise the demand for peaking units, which increases the marginal cost of electricity, leading to another round of price hikes.