European energy review

In a new Ember report on European power, Dave Jones, perhaps rather surprisingly, says  ‘Europe has avoided the worst of the energy crisis. The shocks of 2022 only caused a minor ripple in coal power and a huge wave of support for renewables. Any fears of a coal rebound are now dead. Europe's clean power transition emerges from this crisis stronger than ever. Not only are European countries still committed to phasing out coal, they are now striving to phase out gas as well. The energy crisis has undoubtedly sped up Europe’s electricity transition. Europe is hurtling towards a clean, electrified economy.’ 

That’s pretty optimistic stuff. But then there is plenty to be optimistic about. For example, it’s not just the massive expansion of renewables on the supply side, with wind and especially PV roaring ahead, progress is at last hopefully to be made on the demand side as well. The European  Commission has called for all new buildings in the EU to be zero-emission by 2028, and they should also be equipped with PV by 2028, where technically and economically feasible. The new measures the EU has introduced should also help it achieve an overall zero-emission building stock by 2050.  

Ember used to be known as Sandbag and is an-NGO orientated energy and climate think tank, so you might expect it to be optimistic and positive. The more conventional and conservative International Energy Association has shifted from its fossil-fuel orientation to become more assertive of the need for radical change in recent years, but its prognosis have often been rather gloomy of late.  Globally, it says, energy demand will outstrip supply, driven by economic growth. Actually, last year saw a slight fall in the rate of growth, with, the IEA says, global electricity demand rising by only 2% compared with the 2.4% average seen over the period 2015-2019. But as the global economy expands and given the electrification of the transport and heating sectors, the IEA says power demand will continue to rise globally, led by China. 

However, it’s not all gloom and doom. The IEA notes that 90% of new power demand between now and 2025 will be covered by clean energy sources like wind and solar, along with nuclear. The nuclear part may be contentious, as argued by those opposed to its inclusion, along with fossil gas, in the EU’s ‘green energy’ taxonomy, but it does look like renewables will become the world’s largest electricity source within 3 years, providing 35% of global electricity and overtaking coal, according to the IEA. Will that be enough? 

Some EU countries are certainly trying to do much better than that, and indeed some already have done. For example, in Germany, the Socialist-Green-Liberal coalition government of Chancellor Olaf Scholz aims to reach 80% of green power in 2030, up from about 47% last year. A revised renewable energy act (EEG) came into force on 1 January 2023 aiming to speed up green energy deployment among other measures, gives renewables the status of being in the ‘overriding public interest’. However, the government has also created a so-called ‘electricity price brake’ law that, in order to finance power bill subsidies for consumers, may drastically skim off wind and solar generation revenues- a bit like the windfall tax also arguably perversely does in the UK.

France is better known for being pro-nuclear (and for nowadays having problems with that), but it is also trying to catch up on renewables. Although he is also very keen on nuclear, Macon has set a target of building 50 offshore wind plants by 2050, up from one so far, to generate 40 GW of electricity. And he wants to multiply solar capacity by 10, to top 100 GW. Although there are opponents, that programme seems to be getting support.  With many of its nuclear plants shut down for repairs or test, France has after all been put in the ignominious position of having to import power from Germany, Spain and the UK- where renewables are booming. As they are elsewhere. For example, wind generation capacity rose up 75% last year in Finland.

Supply-side gains like this are all to the good, but, as the IEA says, they may not be enough. If we want to cut carbon emissions we also need to cut demand growth. That’s no easy matter. For example, energy use fell in Germany by 4.7% last year, but net carbon emissions stayed the same- increased coal and oil use cancelled out the renewable gains. Some of the coal was used for the power exported to France, a lucrative trade, and, although EVs and biofuel are making an entrance, the automotive sector is still heavily wedded to oil. So big changes will be needed, as Germany also seeks to reduce it reliance on Russian gas, and close its last old nuclear plants. 

Coal may be off the agenda in many EU countries, while fossil gas may be off the menu too, with artificial carbon capture a dubious last-ditch fossil long-shot, but it’s going to need a lot more than just optimism from Ember to get emissions down fast.  Although the UK may be doing quite well so far, as Lord Stern has argued, in the UK, and in continental Europe, there is a desperate need for rapid energy saving/efficiency improvements in all sectors, along with renewables and energy storage of all types, including sustainably sourced heat and green hydrogen. They all have to be accelerated fast.  

Will nuclear also play a role? In some countries perhaps- see my next post on the UK situation. But elsewhere in Europe it is less clear, with there being strong opposition to new nuclear in some countries, including to the idea of nuclear generated hydrogen being labelled ‘green’. With Europe backing off the import of Russian fossil gas, the battle over what constitutes ‘green’ gas will no doubt continue, with the nuclear lobby evidently keen to get in the race. It is pushing for what has been called pink, or sometimes red, hydrogen. Not really green!?