trending Market Intelligence /marketintelligence/en/news-insights/trending/STR9C85ZErcDLTOiq9FRaA2 content esgSubNav
In This List

Europe's 2016 coal generation falls 12% YOY on gas transition

Blog

Insight Weekly: Ukraine war impact on mining; US bank growth slowdown; cloud computing headwinds

Blog

Insight Weekly: Cryptocurrency's growth; green bond market outlook; coal investors' windfall

Blog

Insight Weekly: Challenges for European banks; Japan's IPO slowdown; carmakers' supply woes

Blog

Q4’21 US Power Forecast: Will high commodity prices accelerate the energy transition?


Europe's 2016 coal generation falls 12% YOY on gas transition

As part of its emissions reduction efforts, Europe's coal generation dropped 12% year over year in 2016, according to a joint report by the think tanks Agora Energiewende and Sandbag.

Europe aims to slash its greenhouse gas emissions by at least 40% by 2030 against 1990 levels. In 2016, coal's participation in its energy mix fell to 21.6% from 24.6% in 2015. This was offset by gas, which saw its share increase to 18.6% from 15.5% in 2015, after its generation rose 20% year over year, according to the report.

The transition from coal to gas resulted in a 4.5% reduction in the European power sector's CO2 emissions to roughly 1.0 million tonnes of CO2 in 2016.

Coal's decline in Europe's energy mix can be attributed to four factors, according to think tanks. One factor cited is the closure of coal plants in 2016 with an aggregate capacity of 8 GW, as well as the United Kingdom's doubled carbon price support to 18 pounds per tonne of CO2, along with competition from cheap natural gas and increased gas generation amid a shortfall in nuclear generation.

The study further noted that the outlook for fossil fuel generation in 2017 is bleak. "Fossil generation should fall by at least 70 Terawatt hours in 2017, due to a return to normalised French nuclear generation, a return to normalised wind and solar conditions and new renewables. Then it will continue to fall to 2020, with the continued addition of more renewable capacity," it said.