European power emissions set to drop 21% in 2023

Emissions from Europe’s power sector are again declining, after a rebound in 2022, when coal burn increased temporarily to cover for some of the gas that disappeared from the power mix. Now, gas is again more profitable, and is squeezing coal out of the mix. While renewables are clearly replacing fossil fuels (both coal and gas), the key trend in Europe’s power market right now is the decline in aggregate generation, in response to diminishing demand. While many EU member states continue to deploy new renewable capacity, especially for solar, the amount of electricity generated from these installations shows a more modest 7% increase from 2022. Based on reported generation data for the first six to seven months of 2023, and our modelling of coal and gas burn in the second half of the year, Veyt forecasts power sector emissions to reach 554 Mt in 2023, down 21% from 2022.