The International Energy Agency (IEA) has estimated that European electricity consumers will save around €100bn on their energy bills due to the rapid expansion of renewable energy sources caused by the Russian induced energy crisis. 

The addition of low-cost wind and solar installations has displaced approximately 230 TWh of expensive fossil fuel generation since Russia’s invasion of Ukraine, reducing wholesale electricity prices across all European markets. The decrease in Russian natural gas deliveries to the European Union following the invasion of Ukraine resulted in an 80% decline in pipeline deliveries and reduced hydro and nuclear power output in Europe, leading to increased prices of natural gas and hard coal. To counter these challenges, the European Union added nearly 90 GW of solar PV and wind capacity in 2021 and 2022, effectively driving out the most expensive power plants from the market and reducing prices for all consumers. It is projected that an additional 60 GW of solar PV and wind capacity will come online in 2023, further increasing displacement to nearly 20% this year.

The IEA modelled a scenario to estimate the potential savings with the addition of more wind and solar PV capacity in 2023. The results indicate that without the growth in PV and wind capacity between 2021 and 2023, average wholesale electricity prices would be higher by approximately 3% in 2021, 8% in 2022 and 15% in 2023. This would lead to an overall increase in the cost of electricity supply for the entire European Union, amounting to roughly €100bn. 

The acceleration of renewable energy deployment since 2021 has provided a cost-effective solution to the economic challenges posed by the energy crisis. Long-term contracts secured through policy mechanisms and regulations ensure stable prices for most wind and solar PV power generators in Europe, shielding them from volatile electricity prices. 

The total investment cost of deploying PV and wind capacity over 2021-2023 is expected to amount to about €200bn, and almost 50% of this investment cost will likely be returned in the form of savings on power consumers’ bills by as early as the end of 2023.