Cumulative growth of 110 TWh, led by Coal and Solar
Between 2020 and 2022, the demand of electricity in the EU grew +110 TWh. But this increase has not been covered mostly by renewables as expected. In 2021, long before the invassion of Ukraine, Coal already covered +65% of the growth in demand in the EU. During 2022, the total demand in the region decreased, but Coal and Gas supported most of the changes as Nuclear and hydro dropped drastically. Only Solar was supplying a relevant net effect, adding 33 TWh.
Nuclear decreased in 2022 nearly the same that grew in 2021, ending in a net addition of only 6 TWh. Hydro falled both years, substracting 22 TWh. Biomass added 8 TWh in total, although they happened mostly in 2021.
Surprisignly, Wind collected a decrease of 6 TWh. Far from being a pivotal force of the growth, its lower production had to be covered by other sources. The lack of utility-scale energy storage could extend this problem in the future years.
The Net effect during the last 2 years is that Coal increased 76 TWh, Solar went up 33 TWh, Hydro dropped 22 TWh, and the rest of sources were nearly neutral
Jose A. Martinez
CEO of ADEX
The consequent high gas prices, combined with reduced availability of nuclear power plants and weak hydroelectric production due to droughts, exerted additional pressure on the already tight wholesale electricity market. Skyrocketing prices were recorded at the end of August 22 in almost every power market in the European Union. The market continued reacting to events affecting the price of gas in Europe. The higher-than-usual temperatures that delayed the start of the heating session and the high levels of underground storages supported the fall in the price of gas and, consequently, of electricity in the first months of the following quarter. However, prices have bounced back with the start of the first cold snaps in Europe.
High energy commodity prices, especially gas (marginal fuel setting the wholesale electricity prices in most regions), supported unprecedented high prices and volatility in Q3 2022. Low nuclear fleet availability and reduced hydro output, increased the pressure on the already tight market. The largest year-on-year price increases in Member States were registered in France (+342%), Austria (312%), and Slovakia (+310%). Prices in France were influenced by low nuclear generation that led to net imports from other European markets. The European Power Benchmark was 339 €/MWh on average in Q3 2022, 222% higher on yearly basis. Prices rose considerably in almost every market in Europe (price changes ranged from 25% to more than 300%). The highest prices during the quarter were recorded in Italy and Malta (472 and 460 €/MWh, respectively) and were 279% and 238% higher than in Q3 2021
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