Renewables Hit 40-60% Cost-Optimal Shares in Germany and Texas by 2030 Without Subsidies
Preprint electricity-system modeling for Germany and Texas demonstrates that cost-optimal renewable shares reach 40-60% by 2030 without subsidies. CO2 pricing dominates German outcomes while solar PV economics alone suffice in Texas. The work quantifies how regional drivers alter the timing and policy dependence of the energy transition.
The preprint models joint investment and dispatch decisions using 2015-2024 observed data plus five-year steps to 2050 for Germany and Texas. In Germany, rising CO2 prices above 80 EUR/t shift the equilibrium toward wind, while falling solar and battery costs add 15-20 percentage points of renewable share by 2035. Texas shows solar PV entering the optimal mix immediately because its capacity factor and low gas-price environment already make it cheaper than new combined-cycle plants on an annualized basis. Geographic divergence is stark: Germany's renewable build-out is policy-contingent on carbon pricing, whereas Texas competitiveness is cost-driven and insensitive to moderate gas price swings. This pattern explains why Texas added 10 GW of solar between 2020 and 2024 despite minimal state-level carbon policy, while Germany required successive EEG amendments and EU ETS tightening to achieve similar acceleration. The findings imply that 2030 renewable targets in both regions are already aligned with least-cost pathways once current technology prices are internalized. Jurisdictions still debating subsidy extensions can instead focus on transmission and permitting reforms that remove non-cost barriers now limiting the modeled equilibrium shares.
ERCOT: renewable generation share exceeds 55% of annual energy by 2032 under current technology cost trajectories.
Sources (2)
- [1]Primary Source(https://arxiv.org/abs/2606.17063)
- [2]Supporting Source(https://www.nrel.gov/docs/fy23osti/84409.pdf)