EUROPE ELECTRICITY MARKET

KEY FINDINGS

1. Technip Energies has been awarded two contracts worth EUR 190 Million by Finnish Neste Oyj for work on the development of their renewables production platform in Rotterdam.
2.   Statkraft and NRS partner for a £25m grid stability project In Liverpool.
3. Danish energy companyOrstedhas signed a joint venture with Poland'sPGEfor a 2.5GW offshore wind project located on the Polish side of the Baltic Sea.
4. Belarus plans to commission the country's first 330kV digital power substation after reconstruction of its previous site in 2021.
5. Electricity North West (ENW) has awarded a contract to Rosh engineering for the repair and refurbishment of 33kV/11kv transformers. ENW has the option to extend the contract to 2025.
6. Five nuclear reactors in Sweden are facing potential closure between 2024 and 2028 because a temporary waste storage site is reaching full capacity.
7. Estonian transmission system operator Elering AS has awarded Siemens Energy with a contract to build three synchronous condenser plants in Estonia, which is expected to be commissioned by May, 2024.
8. SSEN Transmission has awarded a contract to General Electric to manufacture, deliver and commission a 420 kV Green Gas for Grid (g3) for a plant in Scotland.

EUROPE ELECTRICITY MARKETOVERVIEW

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.

• Share of energy by renewables has reached an overwhelming 39% more than fossil fuel share (36%) for the first time in Dec, 2020. This is higher than other major countries like the U.S. (18%), India (21%) and China (27%).However, cold weather, low wind-speed and higher prices of gas in the Q1 of 2021 suggests an increase in fossil fuel energy share in 2021.
• Despite the disruptions in supply chain and delays in logistics in the onshore wind sector, the addition of 29 GW of solar and wind energy generation in 2020 has greatly assisted the renewable energy generation of the EU.
• COVID-19 outbreak also affected emission allowance prices in the EU emissions trading system. Prices were below EUR 10/tCO2-eq in the years 2012 to 2017, then prices reached a peak of around EUR 30/tCO2-eq in July and August 2019. With the global pandemic in view ,prices dropped below EUR 15/tCO2-eq in March, April and May – before reaching EUR 30/tCO2-eq again in September,2020.

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.

EUROPE ELECTRICITY MARKETDYNAMICS

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.

EUROPE ELECTRICITY MARKET SEGMENTATION

Europe Electricity MarketBy Power Generation

• Europe Electricity Market Thermal

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.

• Sweden and Austria shut down their last coal-fired power plants in 2020.
• Ireland disconnected its last peat-fired power plant from the grid at the end of 2020.
• Hungary brought forward its coal exit date by five years to 2025.
• Greece aims to put all existing lignite capacities out of operation by 2023.
• Coal generation in Bosnia and Herzegovina, in contrast, rose by 8% in 2020.

• Europe Electricity Market Hydroelectric

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.

• Europe Electricity Market Renewable

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.

• Europe Electricity Market Others

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.

Europe Electricity Market By Power Transmission

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.

Europe Electricity Market Power Distribution

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.  

Europe Electricity Market By Geography

Regional wholesale market has been discussed in the report as shown below.

• CENTRAL WESTERN EUROPE (Austria, Belgium, France, Germany, Luxembourg, the Netherlands, Switzerland)
• NORTHERN EUROPE (Denmark, Estonia, Finland, Latvia, Lithuania, Sweden, Norway)
• SOUTH WESTERN EUROPE (Czechia, Hungary, Poland, Romania, Slovakia, Slovenia)
• SOUTH EASTERN EUROPE (Bulgaria, Croatia, Greece and Serbia)

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.

• In September,2020, France’s electricity imports surpassed exports for the first time since November 2017. However by the end of Dec, 2020 France was again a net exporter of electricity.

EUROPE ELECTRICITY MARKETRETAIL , 2021

source: European Commission, 2021

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).

EUROPE ELECTRICITY MARKETRECENT DEVELOPMENTS

KEY TRENDS SHAPING THEEUROPE ELECTRICITY MARKET

1. Increase in wholesale electricity prices due to expensive emission allowances, and rising gas prices.
2. The European Union’s target to completely decarbonise its power sector by 2050 via supporting policies such as the EU Emissions Trading Scheme, the Renewable Energy Directive and legislation addressing air pollutant emissions from industrial installations.
3. Increasing demand for electric vehicles as the electrification throughout Europe intensifies.
4. Change in energy consumption demand in recent years.
5. Increasing share of renewables and changing energy mix in Europe.

EUROPE ELECTRICITY MARKETCOMPETITIVE LANDSCAPE

EUROPE ELECTRICITY MARKETMAJOR PLAYERS

• NATIONAL GRID PLC
• SIEMENS
• ENEL GREEN POWER
• STATKRAFT AS
• AGDER ENERGY SA

THIS EUROPE ELECTRICITY MARKET REPORT WILL ANSWER FOLLOWING QUESTIONS

1. Europe Electricity Market size and Forecast, by region, by application
2. Average B-2-B price for Europe Electricity Market, by region, per user
3. Technology trends and related opportunity for new Europe Electricity Market tech suppliers
4. Europe Electricity Market share of leading vendors, by region,
5.  Coronavirus impact on Europe Electricity Market earnings