Europe’s stunted hydro & nuclear output may hobble recovery drive: Maguire – EQ Mag

LITTLETON, Colorado : Shortfalls in Europe’s hydro and nuclear output have more than offset record electricity generation from solar and wind sites over the first quarter of 2023, leaving the region vulnerable to acute energy shortages for the second straight year.

European countries fast-tracked renewable energy capacity development in 2022 in the wake of Russia’s invasion of Ukraine last February, which upended natural gas flows to the region and sent power prices soaring.

Europe lifted renewable energy supply capacity by a record 57,290 megawatts in 2022, or by nearly 9%, according to the International Energy Agency (IRENA), amid a scramble to replace imported Russian gas with cleaner, home-grown energy.

However, steep drops in both hydro and nuclear output – two key sources of non-emitting energy – mean Europe’s power producers have limited ways to lift overall electricity generation just as the region’s economies start to reboot after last year’s energy shock.

POWER PLATEAU

Europe’s total electricity generation over the first quarter of 2023 hit 1,213 terawatt hours, or roughly 6.4% less than during the same period in 2022, according to data from think tank Ember.

As Europe’s total electricity demand levels were in post-COVID-19 expansion mode in early 2022 before Russia’s so-called special operation sent power costs to record highs, it makes sense that overall electricity use was comparatively stunted in early 2023.

However, efforts are now underway to revive activity at scores of European factories, industrial plants and production lines that were shuttered or curtailed in 2022, so Europe’s collective electricity consumption totals are set to trend steadily higher over the remainder of 2023.

With Russian natural gas unavailable in the previous quantities due to sanctions and supply issues, Europe’s power producers will need to deploy alternative energy sources to feed that increase in power demand.

And following the large jump in renewable capacity brought online in 2022, utilities can deploy more green energy than ever before across Europe’s electricity grids.

Even so, other power sources will also be needed, and given the escalating pressure to reduce emissions in every region, the cleaner, the better.

PHASED OUT & DRIED UP

Nuclear and hydro power accounted for an average of 40% of total electricity generation in Europe from 2000 to 2020, Ember data shows.

But that proportion of electricity generation dropped to less than 35% in 2022 as a combination of drought in key hydro areas alongside planned shutdowns of outdated nuclear capacity dealt a double-whammy to hydro and nuclear generation assets.

Record low snowfall and precipitation over the past winter looks set to drive hydro generation potential even lower in 2023.

Over the first three months of 2023, hydro power generation in the snow-fed Alps region was 20.6% below that of the same period in 2022, and 38% under the average for that time slot from 2015 to 2020, according to data from Refinitiv.

Other key hydro zones in Europe, including across top mainland Europe hydro producers France and Italy, are also suffering from below-average generation potential following enduring dry conditions throughout most of 2022.

France, Europe’s top nuclear power producer, is also struggling with sharply lower nuclear power generation.

A combination of reactor maintenance issues and a protracted standoff with influential energy worker unions has resulted in nuclear output dropping by 6.2% in the first three months of 2023 from the same period in 2022, and by 18% from the average generation for the first quarter from 2019 through 2021, according to Refinitiv.

UPSIDE POTENTIAL

The sub-par performance of Europe’s hydro and nuclear power assets in the first quarter of 2023 have resulted in a drop of 43 terawatt hours of electricity generation from the same sources in the same period in 2022, Ember data shows.

That more than offsets the nearly 11 terawatt hours of extra electricity generated by solar and wind power installations over the first quarter of 2023 compared to the same period in 2022.

If conditions stay dry and nuclear output remains curtailed, Europe’s electricity producers will struggle to increase overall electricity generation without resorting to increased use of fossil fuels.

However, given the unpredictability of both the weather and labour talks in Europe, it is quite possible that heavy rains alleviate the hydro shortages just as France’s authorities and unions reach a deal to raise nuclear power output.

Should that occur, the hydro and nuclear sectors may transform from laggards to leaders in Europe’s electricity markets, and play an indispensable role in helping to power the region’s economy back onto a growth trajectory over the rest of 2023.

Source: Reuters