Key takeaways

In the short- and midterm (2026, 2028, 2030), significant capacities are at risk of being decommissioned. In the longer term (2035), decommissioning risks remain for the thermal generation fleet in certain regions, though global investments could occur under favourable conditions not modelled in ERAA. These include supply chain considerations, energy transmission networks, and primary energy availability.

The development of the power system must be closely monitored to confirm that investment needs are being realised. Relevant authorities should consider mitigation actions to secure European adequacy. The report assumes many investments will be driven by scarcity prices during high demand or supply constraints, especially when peak units are needed. However, risk-averse investors may postpone decisions without long-term contracts.

Decommissioning of existing power plants should also be monitored to ensure it does not exceed anticipated levels. Renewable generation capacity is expected to grow based on national policy targets and TSO estimates. Yet, due to intermittency, this will not fully compensate for declining dispatchable thermal capacity or increased electrification by 2035.

ERAA modelling suggests that over 50 GW of new fossil gas flexible capacity would be beneficial given anticipated high scarcity prices, though these are expected to occur infrequently in 2035. This capacity would help ensure adequacy during peak times or low RES infeed. Yet, to meet EU climate goals, fossil-fuelled capacity must be reduced or replaced over time. Market signals based on rare scarcity hours may not justify investment, particularly when driven by rare extreme weather events. Relying solely on EVA-based new entry capacity could underestimate adequacy risks.

Notable risks exist across Europe, though the Balkan region and some areas face lower risks. Some non-market resources help mitigate risk where it would otherwise be high (e.g., Ireland).

Targeted interventions and long-term market mechanisms are essential to avoid further risks. Supporting mechanisms and capacity markets must be accelerated. To ensure electricity security and meet climate objectives, Europe must accelerate the deployment of flexibility solutions and infrastructure, including cross-border electricity transmission network to direct RES electricity where it is most needed, as well as storage and other sources of flexibility, while safeguarding security of supply at all times.

The ERAA should be considered in conjunction with national resource adequacy assessments (NRAAs) to inform EU Member States and National Regulatory Authorities (NRAs) about the level of security of supply and serves as the basis for decisions on different market design options. NRAAs provide a complementary, more detailed picture on national specificities and local sensitivities, complementing the ERAA’s comprehensive pan-European overview of capacity concerns.

Lastly, ENTSO-E believes that the primary purpose of the ERAA goes far beyond merely a tool for decisions on CMs. The ERAA supports policymakers in building midterm strategies. It includes pioneering methodologies and tools to analyse future adequacy with an unmatched level of scope and detail, making it a valuable resource for shaping the future of Europe’s electricity grids. ERAA also has the potential to illustrate additional ‘what if’ scenarios, providing insights into possible future outcomes. Therefore, ENTSO-E believes the ERAA Methodology should be improved and streamlined to empower policy-makers to make well-informed decisions that support national and EU objectives going forward. Methodological innovation, pilot programmes, stakeholder consultation and refinement of its scope will continue to strengthen the ERAA’s usefulness.

Main findings