Sunny weather brings solar record to Europe

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Solar power generation in Europe hit an all-time high in the second quarter of the year, as the coronavirus crisis triggered a fall in electricity demand.

Those were the standout statistics in the latest quarterly report on the European power generation market from energy data analyst EnAppSys.

Solar generation saw a record quarterly high of 47.6 TWh as renewables made up the greatest share (45%) of the total electricity mix, ahead of fossil fuels (31%) and nuclear (25%).

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Renewables, fossil fuels and nuclear all saw a decrease in generation from Q1 2020, but while fossil fuels and nuclear generation fell from by 9% and 18% respectively compared with the same quarter last year, renewables increased by 16% compared to Q2 2019.

Overall power generation fell as a result of reduced demand due to the coronavirus pandemic. European energy demand had already dropped significantly at the end of Q1, shortly after the World Health Organization announced the Coronavirus as a pandemic on March 11 and many countries went into lockdown. This trend continued into Q2 with daily demand shapes being both lower and flatter than usual, losing the morning and evening peak shape.

By the end of the quarter, some countries such as Italy, France and Spain had seen a return to more usual demand levels and shapes, while others such as Ireland, Germany and Britain were still seeing lower levels of demand.

The impact of lower demand was reflected in market prices. The prevailing Spectron carbon prices decreased markedly at the end of the first quarter from around 24.00 Euro/te to 16.50 Euro/te, but, driven by the effect of the Market Stability Reserve which absorbs up to 24% of surplus annual allowances, gradually recovered to 26.91 Euro/te by the end of Q2, approaching an all-time high.

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In Britain specifically, the study, which covered the three-month period to June 30 2020, showed that demand plunged by 25% from the previous quarter as the country continued its coronavirus-induced lockdown.

Despite levels of wind generation decreasing from the previous quarter’s record-breaking levels, renewables remained the greatest contributor to the fuel mix (42.5%) followed by gas (31.2%). The sunny spring weather meant that embedded solar generated a record 5 TWh, with wind and solar farms together often making up the majority of the fuel mix near the middle of the day.

Meanwhile, power output from coal plants fell to its lowest quarterly level since before 2002, as only Drax 5 and 6 generated during the quarter. This period saw a record-breaking 67 days and 16 hours without coal generation in the fuel mix, a run which started on April 9.

Jean-Paul Harreman, director of EnAppSys BV, said: “The security measures introduced in Q1 2020 by governments of European nations continued into Q2 and were in full effect for most of the quarter, with some easing of restrictions beginning towards the end of the quarter. While the minimum demand level in Q2 (189.69 GW on May 24) was only marginally less than that for Q1 (189.72 GW on March 22), the quarterly average was significantly lower (298 GW down from 345 GW). This represents a 13% fall, which is greater than the seasonal decrease that would otherwise be expected.

“By the end of the quarter, overall demand levels seemed to have stabilised after the initial drop. While demand was generally lower than historical levels, the differences became comparable in magnitude with the range of normal year-to-year variations, and the lockdown effects became less clear.

“The reduction in demand had a knock-on effect on fuel and carbon input costs, with carbon EU ETS prices falling sharply from the start of lockdown. Since then, they have risen gradually and by the end of Q2 were above the level before the coronavirus was declared a pandemic by the WHO.

“In terms of generation, it was perhaps not surprising that solar achieved a new record during an extended period of sunny weather. Hydro was the largest contributor (43%) to the renewable mix, with Norway the biggest reservoir hydro generator with 42% of the total share ” a 31% increase from Q1 2020.

“In contrast, fossil fuels and nuclear saw their lowest quarterly generation for five years. Output from coal and lignite also continued a sustained downward trend, comprising only 11.5% of total Q2 generation. The largest coal/lignite output is still provided by Germany, though generation from this source has been decreasing rapidly in the country in recent years.”

Read the full report for more detail.

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