EU fossil generation reaches record low

From EMBER

EU fossil generation hits a record low in the first half of 2023. Drop in demand drives EU fossil fuels to collapse. Wind and solar continue growing, while hydro and nuclear recover from historic lows.

EU fossil generation collapsed in the first half of 2023, falling by 17% (-86 TWh) compared to the same period in 2022. Fossil generation from January to June was the lowest since at least 2000 at 410 TWh. The drop was Europe-wide, with a fall of at least 20% in eleven countries, and more than 30% in five (Portugal, Austria, Bulgaria, Estonia, Finland).

Fourteen countries saw their lowest total fossil generation on record for the period, with Austria, Czechia, Denmark, Finland, Italy, Poland and Slovenia at the lowest fossil output since at least 2000. Over summer, some countries went for significant periods without using the fossil fuels that have traditionally been bedrocks of their power systems. In June the Netherlands used coal for only five days, and saw a record seventeen consecutive days with no coal use, while Greece achieved more than 80 hours without lignite in July.

Russian gas pipeline imports also fell dramatically, slashed by 75% to 13 bcm in the first half of 2023, down from 50 bcm in the first half of 2022. As alternatives to Russian gas supply were sourced and EU storage replenished, gas prices fell below the spikes in 2022. This contributed to the fall in coal power over the first half of this year.

Coal generation decreased by a staggering 23% (-49 TWh) year-on-year, compared to 13% (-33 TWh) for gas. Coal continues to be in structural decline in Europe, and despite the volatility of the power sector since Russia’s invasion of Ukraine, a coal ‘comeback’ did not materialise over winter. Coal accounted for less than 10% of the EU’s electricity generation for the first time ever in May, with May and June the two lowest coal months on record.

Note how neatly wind and solar output are inversely correlated seasonally.

The first half of 2023 shows evidence of the significant effort the EU has made to accelerate the deployment of renewables, with solar capacity additions booming in particular. After record-breaking additions of 33 GW in 2022, the pace has continued in 2023. In the first six months of the year Germany added 6.5 GW (+10%) of new solar capacity, while Poland added over 2 GW (+17%) and Belgium added at least 1.2 GW (+19%). Italy installed 2.5 GW of solar in the first six months of 2023 compared to a total of 3 GW for the whole of 2022, while France added at least 600 MW in the first quarter of 2023, slightly above its deployment in the same period last year. Spain is expected to accelerate its deployment from 4.5 GW in 2022 to 7 GW this year.

This increases confidence in further robust growth in solar generation, since the additional capacity that has come online since last summer has already led to an impressive rise in measured solar generation of 13% (13 TWh) in the first half of 2023. Even this is an underestimate of the true scale of solar generation, since in many countries behind the meter distributed solar is not reported as generation but instead appears as “missing” demand.

Wind generation rose by 4.8% (+10 TWh) compared to the first six months of 2022, a modest increase. Installation rates are a mixed picture in the face of various barriers, despite countries’ increased ambitions. While France had record additions of over 850 MW in the first quarter of the year, elsewhere signs of challenges are evident. In Germany, total wind capacity only grew by 1.5 GW in the first half of 2023, and less than 2 GW of offshore wind was added across the entire EU in the same period. Rising costs have had a detrimental effect on investment in wind projects, and policies in some Member States have hindered deployment.

Despite these challenges, however, industry enthusiasm for wind remains. And with both industry and policymakers ringing alarm bells on the barriers to wind, there are some signs that the slowdown is being taken seriously, including policy changes in Poland and a concerted effort by the European Commission to address permitting delays. Existing wind capacity continues to deliver for Europe’s power system, with unusually windy conditions in July resulting in output 22% (5.5 TWh) higher than July 2022.

Following the rapid expansion of renewables ambition in recent years, both the EU and individual countries continue to break records. Wind and solar accounted for more than 30% of electricity production in the EU for the first time in both May and July, and surpassed total fossil generation in May. Over the first six months of the year seventeen countries generated record shares of power from renewables, with Greece and Romania passing 50% for the first time and Denmark and Portugal both breaking 75%. In Portugal, this was primarily from wind and solar, which accounted for more than half of total generation in both April and May. After seeing 140 hours in June in which wind and solar produced more than the entire country’s consumption, the Netherlands also hit 50% wind and solar for the first time in July, while Germany came close with a record 49% share in the same month.