As wind and solar power scale, there could be moments when electricity supply outpaces demand in certain markets. According to partner Godart van Gendt and colleagues, parts of Australia could see peaks in solar electricity that meet or exceed baseload demand for approximately a third of the time by 2030. Finding ways to use the available oversupply, such as storing it or using it to produce green hydrogen, could help accelerate the energy transition—and have an economic upside. Our analysis shows that using this oversupply of electricity in the European Union, for example, could create €7 billion to €14 billion of value annually.
Image description:
Three area graphs show the portion of the year that different, dominant renewables in 3 countries can provide all or more than the base power demand from 2023 to 2040. Canada’s hydropower never covers >5% of the year, Australia’s solar power could cover 35–45%, and the Netherlands’ wind power could cover 55–70%.
Source: AEMO; Canada Energy Regulator; McKinsey Energy Solutions.
End of image description.
To read the article, see “Demand-based pricing stabilizes the electricity market of the future,” February 28, 2024.