Last year we marked a landmark moment when renewables overtook fossil fuels to become the EU’s main source of electricity for the first time. In their fifth annual report, Ember and Agora Energiewende looked into the transition of Europe’s electricity system presenting key number connected to the uptake of renewables, coal phase-out and the future of fossil fuels to forecast the main trends that will dominate the development of the power sector in this year. As the analysis tracks the transition of the electricity sector of each EU Member State, there are some interesting figures regarding the CEE region as well. Here are the main takeaways.
Renewables on the rise
Renewables rose to generate 38 per cent of Europe’s electricity in 2020 overtaking fossil-fuel generation, which is an important milestone. The rise in renewables was reassuringly robust despite the pandemic. Wind generation rose 9 per cent in 2020 and solar generation rose 15 per cent, together they generated a fifth of Europe’s electricity last year.
However, the report highlights that the rise of renewables is still too slow as wind and solar generation growth must nearly triple to reach Europe’s 2030 green deal targets.
“The European Green Deal requires some 100 TWh of annual additions of renewables, a doubling of the deployment speed seen in 2020. Post-pandemic recovery programmes thus need to go hand-in-hand with accelerated climate action,” said Patrick Graichen, Director of Agora Energiewende.
It must be noted that wind and solar increased by 51 terawatt-hours in 2020, which is well above the 2010-2020 average, despite facing some impact from COVID-19. According to the forecast of the International Energy Agency (IEA), we can expect record wind and solar capacity growth in 2021.
Still, EU countries need to step up their 2030 commitments considerably as the report took note of different levels of ambition between Member States. Wind and solar generation grew by 10 per cent in the EU-27 in 2020. However, in seven countries – some with excellent conditions for solar and wind – have barely seen any growth since 2015, from the CEE region Romania, Czechia, Slovakia and Bulgaria belong to this group according to the report.
Coal phase-out continues
Coal generation fell by 20 per cent in 2020 and has halved since 2015. Coal generation fell in almost every country, continuing coal’s collapse that was well in place before Covid-19. In Greece for instance coal generation was down by 40 per cent from 2019 to 2020, in Romania by 31 per cent. In contrast, Poland’s falls in coal (8 per cent) lag behind the rest of Europe.
However, the reports underlined that only half of coal’s fall was due to new wind and solar (in 2020 itself, coal generation fell by 90 TWh, compared to a 51 TWh rise in wind and solar.) Increasing gas generation, and the fall in electricity demand due to COVID-19, also sped up coal’s rapid decline.
Compared to the dramatic decline in coal, gas generation only fell 4 per cent in 2020, despite the electricity demand drop from the pandemic. This is because a robust carbon price and low gas prices meant gas generation was the cheapest form of fossil generation, even undercutting lignite for the first time in some months, pointed out the report.
Fossil gas still supplied 20 per cent of Europe’s electricity in 2020, and although gas fell in 2020, it is still 14 per cent higher than in 2015. Greece and Poland for instance saw gas generation rise in 2020.
The report underlines that although wind and solar is replacing coal, no country has yet seen wind and solar starting to significantly replace gas generation and indeed some countries still seen rising gas generation.