‘Sign of the times’: Fossil fuels hit record low, accounting for just a third of EU power mix

New analysis reveals how fossil fuel power generation across the EU fell 17 per cent during the first half of the year Fossil fuel power generation plummeted across the EU during the first six months of the year, as reduced demand, emergency policy measures designed to bring an end to Russian energy exports, and the continued roll out of renewables projects combined to push down demand for both coal and gas-fired power. That is according to new data from think tank Ember, which confirms that fossil fuel generation during the first half of the year accounted for just 33 per cent of the power mix – a record low for the bloc.

Overall, fossil fuel generation fell 17 per cent in the first half of this year, down 86TWh compared with the same period in 2022. Significantly, the trend was seen right across the EU, with a fall of at least 20 per cent in 11 countries, and more than 30 per cent in five Portugal, Austria, Bulgaria, Estonia, and Finland. Fourteen EU countries saw their lowest total fossil generation on record for the first half of the year.

Coal generation dropped by 23 per cent year-on-year in the first half of the year, while gas generation decreased by 13 per cent. Across the bloc as a whole coal generated less than 10 per cent of the EU’s electricity generation for the first time ever in May, with May and June marking the two lowest months for coal generation on record.

The reductions were driven in part by a 4.6 per cent fall in energy demand, as persistently high gas and power prices led to reduced industrial output and economic headwinds across much of the bloc.

However, the sharp fall in fossil fuel generation was also a function of the wave of energy efficiency and energy saving policies introduced by European governments in response to Russia’s attempts to weaponise energy supplies following its invasion of Ukraine. As a result demand fell to 1,261TWh, below even 2020’s pandemic low of 1,271 TWh for the period and the lowest since at least 2008 for current member states.

Meanwhile, the roll out of new renewables capacity continued to eat into fossil fuels’ market share. Ember said solar power generation rose 13 per cent year-on-year during the first half of the year, while wind generation rose by 4.8 per cent.

“The EU’s acceleration in renewables in recent years was visible in new records across the EU,” Ember said. “From January to June, 17 countries generated record shares of power from renewables, with Greece and Romania passing 50 per cent for the first time and Denmark and Portugal both breaking 75 per cent. The Netherlands also hit 50 per cent wind and solar for the first time in July, while Germany came close with a record 49 per cent share in the same month.”

Hydro generation also increased by 11 per cent in the first half of 2023, while nuclear generation fell by 3.6 per cent but is expected to recover as the year continues.

“The decline in fossil fuels is a sign of the times,” said Ember analyst Matt Ewen. “Coal and gas are too expensive, too risky, and the EU is cutting them out. But we need to see clean power replacing fossil fuels faster. A massive push, especially on solar and wind, is urgently needed to underpin a resilient economy across Europe.”

The data comes just a day after a new report from the International Renewable Energy Association (IRENA) confirmed the cost competitiveness of new renewables projects is continuing to improve, despite inflationary pressures in some markets.

The report, titled Renewable Power Generation Costs in 2022, argued the fossil fuel price crisis has further strengthened the cost competitiveness of renewable power, with around 86 per cent of all the newly commissioned renewable capacity in 2022, totalling 187GW of capacity, boasting lower costs than fossil fuel-fired electricity.

New capacity added since 2000 reduced the electricity sector fuel bill in 2022 by at least $52bn, IRENA said, adding that “without the deployment of renewables over the last two decades, the economic disruption from the fossil fuel price shock in 2022 would have been much worse and possibly beyond many governments ability to soften with public funding”.

“IRENA sees 2022 as a veritable turning point in the deployment for renewables as its cost-competitiveness has never been greater despite the lingering commodity and equipment cost inflation around the world,” said IRENA’s Director-General Francesco La Camera. “The most affected regions by the historic price shock were remarkably resilient, in large part thanks to the massive increase of solar and wind in the last decade.

“Today, the business case for renewables is compelling, but the world must add 1,000GW of renewable power annually on average every year until 2030 to keep 1.5C within reach, more than three times 2022 levels. There is no time for a new energy system to evolve gradually as was the case for fossil fuels.”