Carbon Risk

Carbon Risk

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Carbon Risk
Carbon Risk
The forgotten giant of clean energy
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The forgotten giant of clean energy

Why carbon market investors need to keep an eye on Europe's drought

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Peter Sainsbury
May 11, 2022
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Carbon Risk
Carbon Risk
The forgotten giant of clean energy
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The “wind drought” of 2021 could not have come at a worse time for Europe’s energy market.

Throughout the summer and early autumn, wind speeds were much slower than usual. The drought meant that the steady “whooshing” sound from wind turbines, normally responsible for 14% of European power generation began to fade. In response, generators turned to thermal coal and natural gas generation to meet demand.

The timing could not have been worse. Tight thermal coal and natural gas fundamentals resulted in surging costs for generators that they needed to pass onto consumers via high power prices.

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