Electricity transition emerges from crisis stronger

The EU’s response to Russia’s invasion of Ukraine in 2022 has accelerated its electricity transition, and now there is a predicted massive scale-up in clean energy, according to Ember.

In 2022, wind and solar generated a record fifth of EU electricity (22 per cent), for the first-time overtaking fossil gas (20 per cent), and remaining above coal power (16 per cent).

However, the shift away from fossil fuels was put on hold by the twin crises in the EU’s electricity system in 2022. A drought across Europe led to the lowest level of hydro generation since at least 2000, and there were widespread unexpected French nuclear outages just as German nuclear units were closing.

This created a large 185 TWh gap in generation, equal to 7 per cent of the EU’s total electricity demand in 2022. Five-sixths of the gap was made up by more wind and solar generation and a fall in electricity demand. But the remaining sixth was met by increased fossil generation. Since coal was less expensive than gas, coal accounted for the majority of the increase, rising 7 per cent (+28 TWh) in 2022, compared to 2021. As a result, EU power sector emissions rose by 3.9 per cent (+26 MtCO2) in 2022 compared to 2021. Gas generation was almost unchanged (+0.8 per cent), and because gas was already more expensive than coal in 2021, there was no further switching from gas into coal in 2022.

However, 2023 will be quite the opposite. Hydro generation will rebound, French nuclear units will return, wind and solar deployment will accelerate, and electricity demand will likely continue to fall over the coming months. In 2023, the EU is set to witness a huge fall in fossil fuels, especially gas power.

In addition, EU electricity demand has begun to fall fast, dropping by 7.9 per cent in Q4 2022 compared to the same period the previous year, close in scale to the 9.6 per cent fall witnessed in Q2 2020 when Europe was in lockdown. The transition will ultimately bring a major rise in demand through electrification, with the step up in heat pumps, EVs and electrolysers in 2022, it is apparent that this change will happen quickly.

To help meet this demand, solar installations rose to 41 GW in 2022, 47 per cent more than was added in 2021. Twenty EU countries achieved their highest ever share of solar electricity. The Netherlands was the leader, producing 14 per cent of its power from solar—overtaking coal generation for the first time.

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