According to a new analysis released on Friday by the Centre for Research on Energy and Clean Air (CREA), power generation from zero-carbon sources saved the European Union (EU) 33 billion euros in the first three months of the gas shortage (July-September), as well as 2.3 billion euros in the United Kingdom.
In the third quarter of this year, the region’s proportion of zero-carbon generation reached an all-time high of 66 %, helping to keep the lights on and reduce fossil fuel import expenses.
Power costs in Europe and the United Kingdom have soared in recent months as wholesale coal, gas, and carbon prices have risen in line with power demand returning to pre-pandemic levels, despite Europe’s limited fuel reserves and delays in commodities exports from producing countries.
These commodities reached new highs in the last week of September, with coal transported to Europe trading at $233 per tonne, fossil gas at euro 92/MWh, and CO2 emissions at roughly 65 euro per tonne.
The recent price volatility in the EU and UK electricity markets serves as a timely warning that relying on fossil imports is both hazardous and costly. Despite claims of decreasing generating output, renewables covered a considerable fraction of demand in most European countries during this time, sheltering some parts of the mix from the consequences of rising fuel costs, which would have required more gas.
In the EU’s July-September period, wind and solar capacity provided an average output of 50 GW, a new high, accounting for 28% of total electricity generation.
With nuclear contributing an extra 76 GW (21% of total generation), their combined output effectively covered the equivalent of 126 major coal or gas power plants operating at full capacity, allowing gas and coal to generate 26% and 13% of total generation, respectively.
If this zero-carbon power were to be generated from gas, at the average of the record high prices witnessed in recent months, the gas import bill would have increased by nearly 26 billion euros, with hydropower saving another 7 billion euros.
Assuming no increase in fuel prices as a result of the increased demand, this is an extremely conservative lower bound.
Similarly, in the United Kingdom, zero-carbon technologies generated half of the electricity generated from July to September.
Over the same time period, wind and solar-generated an average of 5.4 GW, whereas nuclear generated 4.6 GW. This is the combined output of ten major coal or gas power plants operating at full capacity.
If this power had to be generated using gas, the additional gas import expense would have been around 2.2 billion euros per month, with hydro bringing the total to 2.3 billion euros.