Ember’s analysis of the EU electricity transition in 2023: what happened in 2023, and what can we expect in 2024?
The European Electricity Review analyses full-year electricity generation and demand data for 2023 in all EU-27 countries to understand the region’s progress in transitioning from fossil fuels to clean electricity. It is the eighth annual report on the EU power sector published by Ember (previously as Sandbag). Our data is free and easily downloadable, and is available at annual and monthly granularity. We hope others also find the data useful for their own analysis.
The EU accelerated its shift away from fossil fuels in 2023, with record falls in coal, gas and emissions. Fossil fuels dropped by a record 19% to their lowest ever level at less than one third of the EU’s electricity generation. Renewables rose to a record 44% share, surpassing 40% for the first time. Wind and solar continued to be the drivers of this renewables growth, producing a record 27% of EU electricity in 2023 and achieving their largest ever annual capacity additions. Furthermore, wind generation reached a major milestone, surpassing gas for the first time.
Clean generation reached more than two-thirds of EU electricity, double fossil’s share, as hydro rebounded and nuclear partially recovered from last year’s lows alongside the increase in wind and solar.
Coal was already in long-term decline, and that trend resumed in 2023. The temporary slowdown in coal plant closures during the energy crisis did not prevent a huge fall in coal generation this year, with a wave of plant closures imminent in 2024. Gas generation fell for the fourth consecutive year, and as coal nears phase-out in many countries, gas will be next to enter terminal decline.
In addition to clean growth, falling electricity demand also contributed to the drop in fossil fuel generation. Demand fell by 3.4% (-94 TWh) in 2023 compared to 2022, and was 6.4% (-186 TWh) lower than 2021 levels when the energy crisis began. This trajectory is unlikely to continue. With increased electrification, this rate of demand fall is not expected to be repeated in the coming years. To reduce fossil fuels at the speed required to hit EU climate goals, renewables will need to keep pace as demand increases.
The EU is firmly on its way to transition from a fossil-based system to one where wind and solar are the backbone. In 2023, 24% of hours saw less than a quarter of electricity coming from fossil fuels, a major step up from just 4% of hours in 2022. As this shift becomes even more evident, so does the importance of enablers of a clean power system. Alongside wind and solar growth, grids, storage and demand side response will determine the power system of the future.
Fossil generation plummeted by a record 19% (-209 TWh) in 2023, to account for less than a third of the EU’s electricity mix for the first time. Coal generation fell by 26% (-116 TWh) to its lowest level ever (333 TWh), making up just 12% of the EU electricity mix in 2023. Coal generation halved from 2016 to 2023 (-327 TWh) due to a similar rise in wind and solar generation (+354 TWh). Coal plant closures slowed during the energy crisis, but coal’s structural decline continues as a fifth of the EU’s coal fleet will shut down in 2024 and 2025. The collapse in coal did not result in a rise in gas. Gas generation fell by 15% (-82 TWh) to 452 TWh, the largest annual reduction since at least 1990. This was the fourth consecutive year of gas generation decline, with gas accounting for 17% of total EU generation in 2023.
EU power sector emissions fell a record 19% (-157 million tonnes of carbon dioxide equivalent) in 2023. This eclipsed the previous highest annual drop of 13% in 2020, when the Covid-19 pandemic struck. Power sector emissions have now almost been cut in half (-46%) since their peak in 2007. Eleven countries achieved their largest emissions falls ever. Wind and solar growth was responsible for much of the decline, with electricity demand also playing a significant role. Electricity demand dropped by 3.4% in 2023. This meant demand was 6.4% lower in 2023 than it was in 2021 when the energy crisis began – just over a third (38%) of the fall in that period can be attributed to a reduction in industrial electricity consumption.
Wind power saw record annual generation growth in 2023 of 55 TWh (+13%). This resulted in generation from wind surpassing gas for the first time. Electricity produced from wind was 475 TWh, equivalent to France’s total electricity demand, compared to 452 TWh from gas. This was the only year that wind generation exceeded that of coal (333 TWh) aside from 2020 amid Covid-19 impacts. 17 GW of wind power was installed in 2023 compared to 16 GW in 2022, marginally achieving the highest ever annual capacity increase. However, this deployment rate needs to almost double to over 30 GW per year to 2030 if the EU is to achieve its targets.
For the first time, more than a quarter of EU electricity (27%) was provided by wind and solar in 2023, up from 23% in 2022. This drove renewable electricity to a record high of 44%, passing the 40% mark for the first year in the EU’s history. Combined wind and solar generation increased by a record 90 TWh and installed capacity by 73 GW. Solar continued its strong growth with 56 GW of additional capacity in 2023, compared to 41 GW in 2022 (+37%). But solar failed to match its 2022 year-on-year generation growth (+36 TWh in 2023 versus +48 TWh in 2022). The EU’s electricity system continued its shift towards one powered by wind and solar as 24% of hours saw less than a quarter of electricity coming from fossil fuels, up from just 4% of hours in 2022. Grids, storage and other enablers of system flexibility will be increasingly critical as wind and solar’s share continues to grow.
The EU’s power sector is in the middle of a monumental shift. Fossil fuels are playing a smaller role than ever as a system with wind and solar as its backbone comes into view. The energy crisis and Russia’s invasion of Ukraine did not lead to coal and gas resurgence — far from it. Coal is nearing phase-out, and as wind and solar grow, gas will be next to enter terminal decline. However it is not time to get complacent. The EU needs a laser focus on rapidly deploying wind, solar and flexibility to create a system free of fossil fuels.
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