EU Energy Markets Stabilize As Renewables Reach Record 52% In Power Generation – Report

In the second quarter of 2024, energy markets in the European Union showed significant stability, with renewables generating over half of the electricity. According to newly released Quarterly Reports, both gas and electricity markets in the EU reached a more predictable state, contrasting the same period in 2023. This stability is largely due to an acceleration of positive structural shifts, with renewable energy making up a record 52% of electricity generation, mainly from solar and wind sources.

The Electricity Market Report highlights a steady decline in electricity prices alongside the increasing share of renewables in the energy mix. This shift has led to a notable reduction in fossil fuel dependency, marking a record low of 20% for fossil-fuel-based electricity generation. Within this period, electricity from gas decreased by 24% compared to last year, while coal-fired power dropped by 26%. Electricity consumption, however, saw only a slight increase of 1% in Q2 2024 when compared with Q2 2023. The European Power Benchmark, representing the average price of electricity, settled at 60 €/MWh during the second quarter, reflecting a 33% decrease from the same period in 2023.

The Gas Market Report also reveals positive trends, noting a stable environment as the market continued to adapt to the long-term effects of the energy crisis following Russia’s invasion of Ukraine. During the April to June 2024 period, EU gas consumption continued its downward trajectory. This decline was fueled by reduced reliance on fossil gas in electricity production, a push for higher energy efficiency, and greater adoption of renewable energy. EU gas imports also followed a downward trend, while storage levels, already at historical highs, increased further. Additionally, retail gas prices dropped by 4% compared to the previous quarter and were 10% lower than in Q2 of 2023. This reduction brought gas prices down to levels last seen in 2021 before the energy crisis began.

Wholesale gas prices across EU member states showed signs of convergence, supported by smooth cross-border flows and favorable supply conditions. This progress highlights the resilience of EU energy markets as they adapt to ongoing structural changes and increased renewable integration. The stability seen in both gas and electricity sectors reflects efforts to secure energy independence and price predictability, marking an important phase in the EU’s energy transition.

The reports indicate that the growth in renewable energy is playing a crucial role in reshaping the EU energy landscape. As renewables replace fossil fuels, market stability continues to improve, alongside reductions in energy costs for both wholesale and retail consumers. This shift signifies a stronger and more sustainable energy market for the EU as it moves closer to its long-term environmental and energy security goals.