Moody’s: Renewable Eating Fossil Fuel’s Lunch

The rating agency Moody’s has a new report out on the effect of renewable energy on the European market. Thanks to Jeremy Leggett for the link.

They state that already one third of European generation capacity is renewable right now. And that share is expected to rise to 50% until 2020.

That’s good, because more renewable energy means burning less fossil fuel, keeping more of the treasure for future generations and releasing less CO2.

But it’s bad if you happen to be an utility rated by Moody’s and don’t adapt to the changing market by getting some renewable capacity into your generation mix. Moody’s will lower your credit rating if you fail to get the message.

This is no surprise for me or readers of this blog. See my April post “No new coal capacities in Germany“.

But it’s nice to see Moody’s point this out as well. If the big utilities finally start to understand that the future is renewable and they need to invest there if they want to be a part of that future, that can only lead to increasing the speed of the energy transition.

In Germany, the big utilities’ track record is not very good. In April, they owned only about 13% of renewable resources. The rest was owned by citizens, farmers, industry, and specialized funds.

They just got a wake-up call from Moody’s.

Published by kflenz

Professor at Aoyama Gakuin University, Tokyo. Author of Lenz Blog (since 2003,

One thought on “Moody’s: Renewable Eating Fossil Fuel’s Lunch

  1. If you trust Moody on this, do you trust them also when they say :
    “electricity storage […] these emerging technologies are currently small-scale and prohibitively expensive” ?

    I actually considers there’s quite much more depth in HSBC energy market analysis that in this report from Moody . When they say things like that companies must “adapt to this new paradigm”, really that’s just empty words.
    What should those company do ? Moody had no idea nor information so they starts to utter “new paradigm” to look smart.

    All in one, what Moody say is that the large amount of electricity generated through FIT funded renewable have very strongly disrupted the market, and that’s not really a good thing. But it’s not really news.
    The aim is not to make the market very disrupted and hard to predict, the aim to generate more electricity with carbon free power. In my opinion, sooner or later, the market’s disruption will interfere with that.

    If new capacity wasn’t built because everyone sees it’s not needed, that would be good. But if the reason instead is that it’s hard to find the money, then that’s not good news, because it means the likely result is power outages at the next exceptional consumption peak. It also means that outdated, polluting plants are likely to be used and run longer.
    Did anyone hear the news about coal consumption rising in Europe in 2012 ? (there’s also the problem of a broken CO2 market, and cheap export from the US, but still ….)


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