How will renewable energy impact wholesale electricity prices by 2030?

We analyze in this report the impact of electricity generated from renewable sources on wholesale electricity prices in the four largest economies of the euro area: France, Germany, Italy, and Spain. We estimate a country-specific model where fluctuation in natural gas prices is the key determinant of wholesale electricity prices, and the share of electricity generated from renewable sources is our primary indicator for assessing their impact. We evaluate the implications for these countries in meeting their 2030 targets for renewable electricity generation. Our findings indicate that Germany and Spain will experience the most significant impacts on wholesale electricity prices, with estimated reductions of 25% for Germany and 20% for Spain.