European Electricity Review 2022

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Ember’s EER analysis of the EU electricity transition in 2021 reveals a paradigm shift as new wind and solar replaced costly gas instead of dirty coal.

1 Feb 2022

44 Minutes Read

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Charles Moore
Europe Programme Lead
Ember

Sarah Brown
Europe Programme Director
Ember

Phil MacDonald
Managing Director
Ember

Executive Summary

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Headline Trends

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1.1

Electricity demand

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1.2

Fossil Fuels

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1.3

Renewables

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1.4

Nuclear

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1.5

Emissions

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1.6

Emissions intensity

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Emerging Trends

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2.1

The credibility of fossil gas as a transition fuel vanishes

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2.2

Solar’s moment has arrived

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2.3

EU nuclear decline is slowing progress in the power sector

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Data Explorer

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3.1

European Electricity Review 2022 – Data Explorer

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Conclusion

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Supporting materials

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5.1

Downloads

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5.2

Methodology

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5.3

Media coverage

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About

The European Electricity Review analyses full-year electricity generation data for 2021 in all EU-27 countries to understand the region’s progress in transitioning from fossil fuels to clean electricity. It is the sixth annual report on the EU power sector published by Ember (previously as Sandbag).

The report compares 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 compares electricity data from 2021 to both 2020 and 2019. The comparison to 2019 is a far more accurate measure of the EU’s overall progress in the transition from coal to clean electricity, than the year-on-year headline figures, which have swung down and then back up again because of the Covid-19 pandemic.

Executive Summary

Gas crisis interrupts EU coal exit

‘Paradigm shift’ as new renewables replace costly gas instead of dirtier coal power

The gas crisis created a paradigm shift for the EU’s electricity transition. 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. The interruption to the EU’s coal phase-out slowed emission reductions. With market prices indicating that the gas crisis will continue for at least the next two years, Europe’s climate goals could be at risk if countries fail to step up renewables deployment and legislate to close coal plants.

Key takeaways

Renewables predominantly replaced gas, not coal

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%). Increased nuclear outages and plant closures also reduced the extent to which coal generation fell.

Emissions fell at half the rate required for 1.5C

Between 2019 and 2021, EU power sector emissions declined at less than half the rate required for 1.5C. The shift from fossil fuels to clean power is not happening fast enough. Coal, the dirtiest fuel, has declined just 3% since 2019, compared to 29% in the two years prior. Spain delivered the largest emissions reductions in the last two years, while Poland was by far the largest drag on overall progress. Fossil fuels still accounted for 37% of EU electricity production in 2021, down from 39% in 2019, while renewables generated 37% and nuclear 26%.

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.

The gas crisis is a paradigm shift for the EU’s electricity transition. 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. It is a huge wake-up call. 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.

Charles Moore
‍European Programme Lead, Ember

Next Chapter

1: Headline Trends