Many nations have committed to ambitious goals to limit emissions. Yet the world is not on track to achieve these environmental goals, nor are countries pursuing these policies in a cost effective way, concludes the Organisation for Economic Co‑operation and Development (OECD) Nuclear Energy Agency (NEA) in its new report The Costs of Decarbonisation: System Costs with High Shares of Nuclear and Renewables.
The report highlights that the increased share of variable energy sources has resulted in large inefficiencies imposed on the entire electricity system. These system costs are not properly recognised by current market structures and are currently borne by the overall electricity system in a manner that makes it difficult—if not impossible—to make well-informed decisions and investments.
Without the introduction of new, robust energy market policies, this situation is unlikely to change. Given the massive investments that the realisation of the decarbonisation transformation requires, it is of paramount importance to create long-term frameworks that provide stability and confidence for investors in all low carbon generation technologies. It is also imperative to realign electricity systems and electricity markets to ensure security of supply and system reliability in a cost effective manner.
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