European energy market, forecasts for 2024

The Otovo Study Center outlines 10 key predictions for the new year, highlighting the transition towards sustainable solutions and geopolitical challenges

Which energy landscape is expected for Europe in 2024? The Otovo Study Center, through the analysis of experts in supply chains, ESG, technology and policy, provides an in-depth look at evolving energy dynamics.

Energy poverty on the rise

In the context of rising costs linked to geopolitical dynamics, 12% of Italian families could find it difficult to meet essential energy-related needs in 2024, according to the Italian Observatory on Energy Poverty. The transition from the protected to the free energy market could aggravate growing “energy poverty”, despite government efforts to encourage renewable sources.

Key predictions for 2024

In a complex energy context, the report highlights emerging challenges, but also opportunities in the sustainable energy landscape, outlining a landscape where green technologies are taking over, engaging consumers and infrastructure in the transition to a sustainable energy economy. However, challenges such as rising prices and the need for government support remain central to achieving environmental goals.

1. Increase in energy prices: Electricity prices are expected to increase significantly in several European nations, with forecasts of +31% in Norway, +35% in the UK and +23% in Germany compared to 2023, due to rising production costs.

2. Reduction in solar costs: Solar energy prices are expected to fall by 50%, making solar much more attractive to consumers. This trend is supported by the reduction in costs of solar and the increase in prices of conventional energy.

3. Rise of batteries at affordable costs: Batteries will play a crucial role in 2024, with more accessible and stable prices. It is expected that by 2030 every solar system will have a battery, reducing dependence on electricity grids.

4. Integration of green technologies: A significant increase in green technology installations is expected across Europe in 2024, with 6 million installations overall, including 2 million solar homes, 1 million heat pumps, 0.5 million batteries and 2.5 million of electric vehicles.

5. Large-scale deployment of electric vehicles with bidirectional charging: Electric vehicles with two-way carrying capacity will become more widespread, allowing families to use the car as a home energy source.

6. Virtual power plants and emissions reduction: Virtual power plants (VPPs) will reduce dependence on fossil fuels, storing energy and driving the transition to a zero-emission grid.

7. Energy management systems in homes: Energy management systems will transform homes into energy hubs, enabling consumers to optimize energy consumption and become active players in the energy system market.

8. Efforts to create a solar industry in Europe: Efforts to create a solar industry in Europe may not succeed in the short term, but the need to develop local manufacturing capabilities remains critical.

9. Government subsidies and incentives: Many governments will continue to support the energy transition through subsidies and incentives, while national policies will vary greatly.

10. Mitigating solar labor shortages: Contrary to past concerns, the solar labor shortage will be revealed as a myth in 2024. The solar job market is expected to grow, reaching 1.2 million workers by 2027.

These prospects outline a transition towards a sustainable energy economy in Europe, with widespread adoption of green technologies and challenges to be addressed through government support and continued innovation.