Goldman Sachs has carried out an in-depth analysis of the Draghi Plan. For the entity’s analysis team, the secret of the greater competitiveness of the United States compared to the European Union is based on the cheaper energy that Americans achieve due to three specific factors: fewer taxes, the absence of carbon taxes and the cheaper natural gas.
The productivity gap between the United States and the European Union has increased from 5 to 25 percent between 1995 and 2022 and the gap with China is also increasing.
This situation is causing a shift in European policy after the presentation of the so-called ‘Draghi Plan’ that aims to reduce this strong difference since in Europe people pay more than twice as much for energy as in the US.
Goldman Sachs shows in the report to which elEconomista.es has had access, as indicative examples that the Basf chemical plant in Ludwigshafen, which consumes 7 TWh per year, spends 1.7 billion on electricity, compared to the 690 million it would pay if it were in United States, that is, 1,000 million more difference.
Similarly, the bank assures that the Audi plant in Belgium, which consumes 3 TWh of energy per year, pays 730 million compared to the barely 300 million that it would have to face if it were in the US, that is, approximately 450 million difference. .
For this reason, Goldman Sachs encourages Europe to decouple remuneration from renewables so that it cannot depend on fossil fuels. For this reason, it urges the promotion of a liquid market for long-term electricity contracts (PPA).
For the entity, a renewable installation that has a PPA agreement can be financed at 4.9% compared to the 7.9% that would be necessary if it went only to the wholesale electricity market.
Goldman Sachs assures that in the next European Commission there will be greater scrutiny on flexible generation, trading activities and energy management.
The investment bank assures that there are delays in the implementation of heat pumps, the sales of electric cars and the development of wind and solar capacity.
The possible increase in demand with a reduction in investment suggests a tighter balance for renewables in the US. In fact, the prices of these long-term contracts have doubled from $31 to $60/MWh.
In contrast, in the last 15 years, European electricity demand has fallen by 10%. Germany consumes the same as in 1990, just after reunification.
The bank’s forecasts predict a growth of 1-2 percent per year between 2024 and 2027 and that this amount could increase to 3% until 2030, figures that seem very far from the forecast managed by the Spanish Government.
Nuclear will also reduce its capacity by 20 percent between 2022 and 2030 and even if construction plans were approved right now, the possibility of having new plants would not be a reality until 2035 with an investment cost (LCOE) of 145 euros/MWh compared to gas with CO2 capture, which would be around 136 euros/MWh.
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