Eurelectric’s newly released Power Barometer 2024 shows that 3/4th of the electricity generated in the EU in H1 2024 was sourced from clean energy. The bulk came from renewables, which increased their share from 30% to 50%, while the share of nuclear decreased by 3 percentage pts to 24%. In 2023, the EU power sector cut emissions by 50% compared to 2008, marking the largest reduction ever achieved by the sector (see graph).
At the same time, the association of Europe’s utilities points to several issues in Europe’s energy transition.
While the power sector continues to lead on decarbonization, Europe’s economy is not electrifying fast enough. Between 2022 and 2023, electricity demand declined by 7.5% mainly due to industries shutting down and relocating abroad during the energy crisis
Europe’s electrification rate has been stagnating at 23% for the past 10 years when it should make half of EU final energy consumption by 2040. Meanwhile, China grew its rate by 7 percentage points since 2015
Today, a 3rd of the energy consumed by European industries is covered by electricity, with only 4% of industrial high-emission heating processes being electrified
The electrification of buildings is also struggling with heat pump sales decreasing by 5% in 2023
While Electric vehicles increased to a total of 9 million units in 2024, growth has slowed dramatically – and the number remains far from the targeted 30 to 44 million units by 2030
“The missing piece between going green and staying competitive is electrifying. Industrial sectors hold a huge potential to electrify further based on available technologies,” said Kristian Ruby, Secretary General at Eurelectric. He pointed to electric boilers, arc furnaces, heat pumps, induction heating, plasma torches and more for energy-intensive goods like steel and aluminum.
Another concern for the sector is increased price volatility.
As of August 2024, Europe witnessed 1,031 hours where electricity prices went below zero in at least one EU bidding zone, mostly during solar peaks, with power producers having to pay to supply electricity to the grid.
At the same time, parts of Europe witnessed unusually high prices and cross-border spread. These occurrences, combined with low demand and frequent negative prices complicate the business case for additional renewable investments. Eurelectric pointed to the fact that capture prices for PV were down to 41% in Spain in April in 2024.
On the other hand, Eurelectric emphasized that negative prices (see graph) can incentivize more storage and flexibility to stabilize price volatility. “Yet, a boost in electricity demand remains crucial to solving this issue,” underlined Ruby.
With the EU aiming for carbon neutrality by 2050 and a 55% emissions reduction by 2030, the urgency for decarbonization and electrification is clear, said Eurelectric. To meet its climate targets, the association calls on the EU policymakers to implement the Green Deal, maintain a market-compatible investment framework and establish a clear electrification strategy for a competitive, decarbonised European industry.
The report and many interactive graphs are for download on Eurelectric’s website.
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