The European Power Sector in 2017

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Today we launch our fourth annual review of the European power sector – and for the second year in a row with Agora Energiewende. The key findings from the report are summarised below, but please download the report for the full picture, pieced together from a variety of European and national data sets.

The reports celebrates how for the first time, wind, sun and biomass overtook coal in supplying European electricity.

But there are worrying failings in the current electricity transition, not least that emissions reductions have stalled this year.

The Tipping Point

Renewables are overtaking coal, but emission reductions need to happen quicker

Renewable generation overtook coal for the first time

New renewables generation sharply increased in 2017, with wind, solar and biomass overtaking coal for the first time.

Since Europe’s hydro potential is largely tapped, the increase in renewables comes from wind, solar and biomass generation. They rose by 12% in 2017 to 679 Terawatt hours, putting wind, solar and biomass above coal generation for the first time. This is incredible progress, considering just five years ago, coal generation was more than twice that of wind, solar and biomass.

Renewables growth has become even more uneven

Germany and the UK alone contributed to 56% of the growth in renewables in the past three years. There is also a bias in favour of wind: a massive 19% increase in wind generation took place in 2017, due to good wind conditions and huge investment into wind plants. Given sustainability concerns, it’s good news the biomass boom is over, but disappointing that solar didn’t grow more, given record low costs -solar was responsible for just 14% of the renewables growth from 2014 to 2017.

Two charts: changes in non-hydro renewables generation by country and type

Electricity consumption rose by 0.7% in 2017

European electricity consumption has risen for a third consecutive year. With Europe’s economy being on a growth path again, power demand is rising as well. This suggests Europe’s efficiency efforts are not sufficient and hence the EU’s efficiency policy needs further strengthening.

CO2 emissions in the power sector were unchanged, and rose economy-wide

Low hydro and nuclear generation coupled with increasing demand led to increasing fossil generation. So despite the large rise in wind generation, we estimate power sector CO₂ emissions remained unchanged at 1019 million tonnes. However, overall stationary emissions in the EU emissions trading sectors rose slightly from 1750 to 1756 million tonnes because of stronger industrial production especially in rising steel production.

Together with additional increases in non-ETS gas and oil demand, we estimate overall EU greenhouse gas emissions rose by around 1% in 2017.

Western Europe is phasing out coal, but Eastern Europe is sticking to it

Three more Member States announced coal phase-outs in 2017 – Netherlands, Italy and Portugal. They join France and the UK in committing to phase-out coal, while Eastern European countries are sticking to coal. The debate in Germany, Europe’s largest coal and lignite consumer, is ongoing and will only be decided in 2019.

The UK Transition

On UK wind, solar and biomass:

The UK increased its share of wind, solar and biomass by 20 percentage points from 8% in 2010 to 28% in 2017
Only being beaten by Denmark who achieved an incredible 42 percentage point increase from 32% to 74%.
Even Germany didn’t manage the same growth as the UK – they only expanded by 17 percentage points from 13% in 2010 to 30% in 2017. Although their penetration is still slightly higher at 30% versus the UK’s 28%.
Of the increase in renewable generation for EU28, the UK was responsible for 19% of the rise from 2011 to 2014, and 22% of the rise from 2014 to 2017.
Together Germany and the UK contributed 57% of the EU’s wind, solar and biomass growth from 2014 to 2017. Many other countries have seen anemic or even zero growth in this period.

On UK coal:

The UK reduced its coal burn for electricity by 22 percentage points from 28% in 2010 to 7% in 2017, sharply reducing emissions. Note, gas generation also fell through this time, falling from 46% to 40% of the electricity mix.
Only beaten by Denmark who achieved a 23 percentage point fall from 44% to 21%.
The Germans performed badly, falling by just 5 percentage points from 42% in 2010 to 37% in 2017, leaving them still the 4th most coal-intensive electricity mix. This is not only due to phasing out nuclear, but also increasing electricity exports, and stubbornly high electricity demand.

On UK electricity demand

The UK saw electricity demand fall by an estimated 2% in 2017, and was most likely the only country out of the entire EU28 to see a fall in 2017.
Since 2010, the UK has seen the largest fall in electricity demand of any EU country, of 9%, whilst the economy has continued to grow.
By comparison, Germany fell by 2% and France fell by 5%, and Poland was the biggest riser at 9% over 7 years.

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Wilf Lytton

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The European Power Sector in 2017

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The Tipping Point