Last year, around 44 percent of electricity in the EU was generated from renewable energies. According to a KfW study, this is a “new record”. However, the development bank criticizes that the pace is still too slow.
According to the state development bank KfW, Europe is making progress towards decarbonization in the electricity sector. According to a new study by KfW, around 44 percent of electricity in the European Union will be generated from renewables in 2023. This is a “new high”. The share of fossil fuels fell to 34 percent, with nuclear energy accounting for the remaining 23 percent.
The direction is already correct, but the current pace of reducing emissions in the electricity sector is “significantly too slow,” warned KfW. “Achieving the target requires, based on today’s levels, a further significant expansion of climate-friendly generation capacities,” explained chief economist Fritzi Köhler-Geib. There are also “significant differences” between European countries when it comes to the electricity mix.
Three countries generate more than 75 percent from renewables
According to KfW, 14 of the 27 EU countries generated their electricity mainly from renewable energies last year, including Germany. Only three countries generate more than 75 percent of their electricity from renewable sources: Denmark, Luxembourg and Lithuania. According to the study, another ten countries have shares between 50 and 75 percent, including Germany, Austria, Sweden and Portugal.
Germany is one of the countries “that are moving forward with ambitious expansion goals,” continued Köhler-Geib. Wind power is the number one priority in this country. The potential of photovoltaics has not yet been exhausted in any European country.
EU Parliament approves Electricity market reform
Meanwhile, the EU Parliament today approved a reform of the European electricity market with new funding conditions for renewable energies, among other things. Parliament today approved the compromise negotiated by representatives of the Commission, Member States and Parliament in December. Finally, the Council, as the representative of the states, has to agree to what is considered certain.
With the decision, the German funding system for new wind or solar power plants must also be changed after a transition period of three years. So far, new systems have been subsidized by guaranteeing them a fixed purchase price for their electricity. However, if the prices on the market are higher, the operators make extra profits. This was the case in the energy crisis following the Russian invasion of Ukraine and triggered the reform.
Guaranteed minimum and maximum price
Now only a two-tier system will be permitted from 2027: a guaranteed minimum price for purchase on the one hand, but also a maximum price on the other. If market prices rise above this, then the operators have to hand over these amounts to the state. Technically these are so-called Contracts for Difference (CFD).
The reform was controversial because the CfD will not only be able to promote renewable energies in the future, but also nuclear power, especially at the insistence of France. Special rules were also adopted for aid for coal-fired power plants, which met with resistance from environmentalists and Greens.