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Quarterly report on European electricity markets with a focus on energy storage and 2019 wholesale prices

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Electricity consumption in the EU28 declined by approximately 1% year-on-year in Q4 2019, dragged down by stagnating industrial activity and a very mild start of the heating season. Of the major economies, power consumption increased in the UK (+1.2%) and the Netherlands (+1.3%), while falls were registered in Germany (-2.0%), Poland (-2.0%), Italy (-1.7%), Spain (-0.8%) and France (-0.8%).


The carbon market experienced increased volatility in the first weeks of Q4 2019 due to uncertainties around evolving Brexit negotiations, before embarking on an upward trajectory from the middle of November and finishing the year at 26 €/t.


The structure of the generation in the reference quarter was influenced mainly by recovering hydro production and a decline in coal and lignite generation, which was pressured by cheaper-to-run renewable sources and gas power plants. Compared to the same quarter of the previous year, the share of fossil fuels (solid fuels, gas, oil) in Q4 2019 decreased from 42% to 39%, while the share of renewables rose from 31% to 35% on the back of record hydro and wind production growth. The share of nuclear generation remained broadly stable at 25%.


The rise in carbon-free generation was greatly helped by over 30 GW of renewable capacity installed in 2019, most of it in solar PV (17 GW) and wind farms (13 GW). The largest additions were registered in Spain (7.3 GW) and Ger-many (6.2 GW).


Average retail eclectricity prices for households with mid-sized consumption in the EU rose by 1% year-on-year in the reference quarter. The largest year-on-year increases in the household category were assessed in Czechia (+17%), followed by the Netherlands and Lithuania (both +14%). The biggest year-on-year falls were estimated for Spain (-18%) and Estonia (-16%). In the case of mid-sized industrial consumers, Sweden was assessed to have the most competitive price in Q4 2019, moving in front of Denmark and with Finland taking the third place.