Gas crisis interrupts EU coal exit
1 February 2022
‘Paradigm shift’ as new renewables replace costly gas instead of dirtier coal power
[Brussels, 1 February 2022] New analysis by energy think tank Ember reveals that the gas crisis interrupted the EU’s coal phase-out. Historically Europe’s growing renewables replaced coal power, the most emissions-intensive fuel. However, as a result of soaring gas prices in the second half of 2021, new renewables replaced fossil gas instead. As a result, coal power declined just 3% from 2019 to 2021, compared to 29% in the two years prior. Europe’s slowing coal phase-out and its failure to deploy enough clean power meant that EU power sector emissions fell at less than half the rate required for 1.5C.
“The gas crisis is a paradigm shift for the EU’s electricity transition,” said Charles Moore, Ember’s Europe Lead. “Action is needed to ensure Europe’s coal phase-out stays on track. Legislation is the only way to guarantee that coal plants are closed by 2030; volatile gas prices have made it clear that you cannot rely on market forces alone.”
The sixth annual European Electricity Review compares EU-27 electricity generation in 2021 to benchmark pre-pandemic levels in 2019, providing the first insight into how the gas crisis is affecting the region’s power sector after its recovery from the pandemic.
The report finds that fossil fuels still accounted for 37% of EU electricity production in 2021, down from 39% in 2019, while renewables generated 37% and nuclear 26%.
Europe’s renewable electricity continues to expand, with average annual growth of 44 TWh in the last two years. More than half (52%) of this new renewable generation since 2019 replaced gas power, and a third replaced nuclear, while only a sixth replaced coal. However, prior to this, from 2011 to 2019, over 80% of new renewables replaced coal.
Over the last two years, coal generation only declined in countries that closed coal power stations like Spain (-42%) and Greece (-43%), but this was mostly offset by increases in Poland (+7%). Spain delivered the largest power sector emissions reductions in the last two years, while Poland was by far the largest drag on overall progress.
Wind and solar delivered throughout the energy crisis
Despite claims to the contrary, EU wind and solar power delivered throughout the energy crisis, setting new records every month in the second half of 2021 except September. Wind and solar power reached another new record in 2021 (547 TWh), for the first time generating more electricity than gas (524 TWh), despite modest growth due to lower wind speeds. Solar, in particular, is booming across both the north and south of Europe, producing 27% more power in 2021 than in 2019, and doubling in the Netherlands and Spain in that period.
In the wake of the energy crisis, it has become even more cost-competitive to generate electricity from renewables than gas and coal. While Europe remains reliant on fossil fuels it is exposed to ongoing volatile prices and escalating climate impacts. Accelerated deployment of renewables offers a way out of both the energy and climate crises.
“The current gas crisis should be a huge wake-up call.” continued Moore. “Both coal and gas need to go; and fast. The benefits to the economy and the climate are clearer by the day. Keeping 1.5C within reach requires a massive step up in renewables to ensure that all fossil fuels are off the grid by 2035. Now is the moment to double down on Europe’s transition to clean electricity.”