Electricity consumption has reached pre-pandemic level in EU27 countries in Q4 of 2020.
Despite COVID-19 restrictions, electricity demand has surged by the end of 2020. is seen as the major reason behind this fallback.
Good weather conditions and warm winter in 2019-2020 has changed the mixed energy scenario in Europe. Coal and lignite fired plants saw a drop of 22% in their generation whereas nuclear power plants’ output dropped by 11% in FY2020 as compared to FY 2019.
Due to the favourable price of gas, it came out less affected and has led to a number of switching from coal to gas and lignite to gas. This switching of the coal & lignite fired power plant has been since 2017 in order to reduce the carbon emission as much as possible. On the contrary, renewable sources of energy have been booming since 2017 in Europe.
source: European Commission, 2021
Electricity prices for industrial users in the EU rose by 1% in Q4 2020 compared to the previous quarter. Meanwhile, Chinese industrial prices increased by 1%, which reversed the downward trend observed over the past two years. Industrial electricity prices in the United States fell by 8% quarter-to quarter in Q4 2020 in euro terms to their lowest level since 2017.
The steep drop in nuclear and coal fired generation output has been driven by a number of factors, including optimisation of fuel usage amid reduced electricity demand, plant retirement, rescheduling of maintenance work and unexpected outages caused by low river levels.
As governments hurry to guarantee domestic energy supplies, Centrica, the owner of British Gas, has inked a large supply agreement with Equinor, the Norwegian state oil corporation.
Equinor has promised to supply the company with an additional 1 billion cubic metres of gas over the next three years, enough to heat an additional 4.5 million households in the UK.
The new agreement brings Centrica’s total supply agreement with Equinor to more than 10 billion cubic metres per year, or nearly 12% of total gas demand in the United Kingdom.
After Russia’s invasion of Ukraine strained the market, energy companies are racing to shore up supply of gas for this winter.
Thermal power plants use coal of high heat content, which is burnt in order to use its waste heat to evaporate water and create enough pressure to rotate a turbine, which in turn generates electricity with the help of a generator.
Carbon emission in this mode of power generation is very high and since climate change is a more pressing issue nowadays, many developing as well as developed countries are reducing their dependency on coal fired power plants.
At hydropower plants water flows through a pipe, or penstock, then pushes against and turns blades in a turbine to spin a generator to produce electricity. This needs a huge source of water and most of the time it is made artificially in the form of a dam.
Renewable energy sources include energy forms like solar energy, wind energy, biomass power, small hydro power etc. These sources of energy are eco-friendly but have variable output. Initial cost of installation may be high but profitable in the long run. Share of renewable energy sources in the electricity market is growing very fast.
Large battery storage units for the supply of electricity are the recent trend in the electricity market. With more efficient batteries being developed to store more energy in order to be used as an auxiliary unit during emergency periods.
Renewables to have a major share of the market in Europe’s electricity in the coming years. Solar energy , wind energy and hydroelectric power plants are the major contributors towards Europe’s ambitious goal to be carbon free by 2050.
Transmission System Operators (TSOs) provide grid access to electricity market players like generating companies, suppliers, distributors etc. They are responsible for bulk transmission of electric power using main high voltage lines. European Network of Transmission System Operators (ENTSO) of Europe represents 43 TSOs across 36 countries of Europe.
European power distribution system operators are highly reliable and quality suppliers of electricity to their customers. Distribution system in Europe is diverse in nature. It varies in number and size of operational areas, total number of customers, network characteristics etc. Distribution system operators (DSO) have to face new types of load and maintain the continuity of electricity by compensating for the loss.
Regional wholesale market has been discussed in the report as shown below.
France’s net electricity exports plummeted by over 22% (YoY) in the first eleven months of 2020, due to a steep drop in its nuclear power generation, which was due to closure of Fessenheim 1 and 2 nuclear reactors.
source: European Commission, 2021
In most cases it holds for both consumer types that the lower the consumption, the higher the price of one unit of electricity (per MWh or kWh consumed).
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