This is an extract from a recent report “Wind and solar overtake EU fossil fuels in the first half of 2024” by EMBER. This report analyses developments in the EU’s power sector in the first six months of 2024 (H1-2024), to measure the progress of its clean energy transition.
EU fossil generation continues structural decline as wind and solar outpace increasing demand
Fossil generation continues to fall in the EU, even as demand rebounds. Wind and solar rise to new highs, reaching a share of 30% of EU electricity generation and overtaking fossil fuels for the first time. Even as electricity demand began to rebound in the first half of 2024, strong wind and solar growth pushed fossil generation into continued decline. The first six months of the year revealed a now-familiar pattern as the EU’s energy transition continued at pace: wind and solar generation grew, and fossil power fell. What was new this year was that the fossil fuel decline happened even as electricity demand recovered from the impacts of the gas price crisis. The first six months of 2024 saw fossil fuels continue to decline, even as EU electricity demand began to recover from the impacts of the gas price crisis. Fossil fuels generated 17% less than in the same period in 2023 (-71 TWh), while demand grew by 0.7% (+9 TWh). The drop in fossil generation meant fossil fuels accounted for just 27% of total EU electricity generation in the first half of 2024, compared to 33% over the same period in 2023.
An increase in renewables drove this trend. Strong wind and solar growth was the main contributor to the fall in fossil power in the first half of the year. Solar generation grew by 20% (+23 TWh) and wind generation rose by 9.5% (+21 TWh) compared to the first six months of 2023. Combined, wind and solar grew 13% (+45 TWh). This meant that their share of EU electricity generation increased from 27% in the first half of 2023 to 30% in 2024, an all-time high. Hydro rebounded by 21% (+33 TWh), following droughts that had resulted in very low output for the previous two years. The growth from solar and wind combined with the recovery in hydro generation meant that at 50%, renewables generated half of the EU’s electricity in the first half of 2024. This significantly surpasses the previous record set last year of 44%.
Low carbon sources combined to make up nearly three quarters (73%) of EU electricity generation in the first half of 2024. Alongside renewables growth, nuclear generation also increased by 3.1% (+9 TWh) across the EU, compared to the same period in 2023. This masked two opposing trends: French nuclear generation came back online following maintenance and outages, rebounding by 19 TWh. However, closures to the last German nuclear fleet in the spring of 2023 meant a 7 TWh fall that will not be reversed. Coal generation dropped steeply, with a 24% fall compared to the same period last year (-39 TWh). This was more than half of the 71 TWh fall in fossil generation. Gas generation fell by 14% (-29 TWh). This follows sizable falls in the previous year: in the first six months of 2023, coal fell by 21% (-45 TWh) and gas by 16% (-39 TWh).
Fossils fall in big EU power sectors
Over 75% of the fall in fossil generation came from just five Member States, driven by the EU’s largest power sectors. The largest fall was in Germany, where fossil generation fell by 19 TWh (-16%). This was due to coal generation dropping by over a quarter (-28%, -19 TWh), as gas also fell but other fossil generation slightly increased. Coal supplied 20% of Germany’s electricity in the first half of 2024, down from 26% in the same period in 2023. In Italy, fossil generation fell by 14 TWh (-21%), split evenly between coal and gas. Large falls in gas generation were responsible for fossil generation decreases in Spain, France and Belgium. This was particularly notable in Spain, where coal generation has almost been phased out and rising wind and solar generation is increasingly pushing out gas generation. Gas generation in Spain had already fallen by 25% in the first half of 2023, and fell a further 34% in the same period this year. The trend of falling fossil generation was also evident even in Member States that are traditionally heavily reliant on fossil fuels for electricity generation.
Demand rebounds, but mild temperatures suppressed bigger increase
Unlike the last two years, the fall in fossil generation happened without significant reductions in EU electricity demand. Instead, demand grew by 0.7% (+9 TWh) in the first half of the year. The largest absolute increases in demand were in Sweden (+3.5 TWh), the Netherlands (+3.3 TWh) and Finland (+2.9 TWh). In Denmark and Greece, demand rose by 10.4% (+1.9 TWh) and 7.8% (+1.7 TWh) respectively. Demand likely would have risen further if not for a warmer-than-average winter in many Member States, which lowered electricity demand for heating. Without the impact of mild winter weather, demand would have increased by an estimated 2.1%, aligning with the IEA’s forecast rate of EU electricity demand increase of 2.3% growth per year between 2024-26.
Mild weather conditions had a significant impact on electricity demand in France, which relies heavily on electric domestic heating. Demand declined 1.4% (-3 TWh) in France in the first half of 2024 compared to 2023. Yet, adjusted for temperature, demand would have increased by 0.5% (+1.2 TWh). In Germany, electricity demand continued to fall in the first half of 2024, making it the third consecutive fall for the January-June period. However, the 1.1% fall (-2.8 TWh) in 2024 was much lower than last year’s historic demand drop of 6.6%. Adjusted for the mild temperatures in the first half of the year, Germany’s electricity demand would have grown 0.5% (+1.3 TWh). German demand may also be more than it appears due to how data is collected and reported. In Germany there has been a rapid rise in residential solar PV installations, which can appear in data reporting as reduced electricity demand.
Wind and solar continue rapid growth
Across the EU, solar generation increased by 21% (+25 TWh) compared to the first six months of 2023, while wind generation rose by 9% (+20 TWh). Almost half of the growth in wind generation came from just two countries: Germany (+5.5 TWh, +8.4%) and the Netherlands (+4.6 TWh, +35%). The growth in solar is more widespread, with strong capacity additions leading to large generation increases across the EU, including in Germany (+4.5 TWh, +14%), Spain (+2.7 TWh, +13%), Italy (+2.6 TWh, +17%) and Poland (+2.4 TWh, +37%). Relative growth was even faster in other countries with Hungary’s solar generation increasing 49% (+1.5 TWh) in the first half of 2024 compared to the same period in 2023.
Wind and solar outpace demand growth in the first half of 2024
Structural growth in wind and solar was the single largest contributor to falls in fossil generation in the EU in the first half of 2024, outpacing growth in demand and pushing down emissions. Wind and solar grew by 45 TWh, fast enough to meet and exceed new electricity demand, leading to a fall in fossil generation. Closer scrutiny hints at a more permanent shift: when adjusted for differences in conditions between the first six months of 2024 and the first six months of 2023, wind and solar still would have grown by 40 TWh. This outpaced the structural growth in demand (demand growth adjusted for temperatures), which was 27 TWh. The fall in fossil generation was made even larger by weather conditions in the first half of 2024. Mild winter temperatures reduced the actual increase in demand, with good hydro conditions and wind speeds further adding to the decline in fossil generation.
However, EU solar conditions were slightly worse in the first half of 2024 than in the previous year, preventing even faster generation growth. Adjusted for the amount of sun reaching the ground (the difference in insolation) in the first half of 2024 compared to the first half of 2023, solar generation would have grown by 27 TWh (+24%), instead of the recorded 23 TWh (+20%). In contrast, higher wind speeds across the EU in the first half of 2024 helped boost output. If wind speeds in the first half of 2024 had been the same as in the previous year, wind output would have grown by 5.6% (+13 TWh) instead of the 9.5% (+21 TWh) observed. The Netherlands had one of the largest percentage increases in wind generation at 35%, with growth still at 27% after adjusting for wind conditions. This shows the impact of substantial wind capacity additions in the Netherlands in 2023, totalling 2.4 GW, a 27% increase in the country’s wind capacity.
The uptick in hydro power was primarily weather-dependent, after several years of significant variation linked to conditions. After years impacted by droughts, Europe experienced higher-than-average rainfall in the first half of 2024. As a result, hydro generation rebounded by 21% (+33 TWh) to reach the highest output since 2018. Some Member States saw particularly large upticks in hydro output: Italy increased by 56% (+8.5 TWh), France by 35% (+9.3 TWh), Spain by 54% (+6.9 TWh) and Portugal by 69% (+3.5 TWh). Overall, hydro generation was 15% higher in the EU than the average generation in January-June over the last 5 years.
Wind and solar overtake fossil generation throughout the EU
The increase in wind and solar generation displaced fossil fuels, leading to a key milestone. In the first six months of 2024, the EU generated more electricity from wind and solar than from fossil fuels. Combined, they generated 30% (386 TWh) of the EU’s electricity in the first half of 2024, with fossil generation only supplying 27% (343 TWh). Four Member States also hit this milestone for the first time between January and June in 2024: Germany, Belgium, Hungary and the Netherlands.
Capacity boom driven by policies and prices
Recent years have fundamentally changed the EU’s approach to the energy transition, particularly as Russia’s invasion of Ukraine sent gas prices and the cost of electricity skyrocketing. This has resulted in a significant acceleration of wind and solar deployment across Member States. New policies on both the EU and national level have recognised and solidified the role of clean power technologies to minimise reliance on expensive fossil fuel imports and consumer exposure to volatile prices. Falling solar panel costs have helped to sustain deployment, even as energy prices begin to return to pre-crisis levels.
The EU broke records for both wind and solar capacity additions in 2023, reflected in this year’s gains in generation. In Germany, reforms to reduce bureaucracy and boost incentives for rooftop solar installations have seen significant solar capacity additions continue into 2024: 5 GW of solar capacity was added in the first four months of the year alone, already meeting the country’s capacity target for the year. In the Netherlands, the opening of the new 0.76 GW Hollandse Kust Noord offshore wind farm in December 2023 has resulted in an uptick in wind generation throughout 2024. Austria has also supercharged its solar growth in recent years through the introduction of new subsidies for solar generation and policies to facilitate the set-up of community energy initiatives.
Further acceleration is needed to sustain this transformation
The transformation of the EU’s electricity system has been swift over recent years. The first half of 2024 in particular has seen almost unprecedented falls in fossil generation despite demand growing. Renewables have played a vital role in alleviating high power prices in the bloc, but sustaining the pace of this transition will not be an easy feat. It will require dedicated policy action and implementation to ease barriers to future wind and solar deployment. Annual additions of EU solar capacity increased by at least 40% or more in the three years up to and including 2023. While annual additions are expected to continue to increase, the growth rate of additions is forecast to slow to under 20% per year. Such growth would still be sufficient to reach the EU’s target of 750 GWdc installed capacity by 2030 under the REPowerEU plan. However, the latest Member State plans aim to collectively deliver only 650 GWdc by 2030, exposing a gap between EU energy goals and national ambitions.
The EU’s wind capacity additions are expected to ramp up only from 2025 onwards, as longer project lead times mean that the increased auction volumes and investment decisions in 2023 will take longer to deliver larger deployment. However, under current policy conditions, the EU is still forecast to fall 30 GW short of the minimum 425 GW required to meet its 2030 target, and further short of the 500 GW stipulated in the REPowerEU plan. As power prices return to pre-crisis levels, Europe cannot rely on the market alone to drive the necessary acceleration of renewables deployment. Well-designed and implemented incentive schemes will remain important to sustaining momentum, as demonstrated by the impressive solar expansion continuing in Germany in 2024. Non-market barriers, such as grid capacity constraints must also be overcome. This is evident in the Netherlands, where the network has struggled to keep pace with the country’s solar boom.
Progress has already been made in developing policies to tackle these challenges, but rapid action is needed to unlock faster growth in renewables. Ursula von der Leyen’s reappointment as President of the European Commission confirms a continued mandate to deliver on the Green Deal’s ambitious targets, as she remains firmly committed to the EU’s leadership on climate action. Thoughtful and rapid intervention to deliver on these goals is the only way to further reduce Europe’s costly reliance on fossil fuelled generation and align the EU’s energy goals with its climate obligations.
Access the complete report here
