Electrifying Ambitions Meet Tough Reality in Europe

Resumen detallado

European Union leaders are among the most enthusiastic proponents of maximum electrification to reduce dependence on imported energy commodities. A lot of EU policy pursues…

What I Cover Irina Slav has been writing about global energy markets since 2007, covering the oil and gas industry, energy security, commodities, and the…

European Union leaders are among the most enthusiastic proponents of maximum electrification to reduce dependence on imported energy commodities. A lot of EU policy pursues precisely that. Yet EU electricity prices last week surged to over 600 euros per MWh on a wind drought, and the bloc still gets over 70% of its final energy consumption from hydrocarbons. Electrification is much easier said than done.

In July this year, the European Commission released a plan to turn Europe into the first “electro continent” by boosting the share of electricity in final energy consumption from 23% currently to 46%, and doing that by 2040. The target means that the share of electricity in final energy consumption needs to double—but that is not any electricity that the EC is after. In line with Brussels energy policies from the past decade, which have accelerated since 2022, the goal is to source as much of the bloc’s electricity from alternative sources such as solar and wind installations.

Theoretically, the plan is sound. It involves reducing dependence on energy imported from other countries that either the EU views as enemies or are in a state of war, which is affecting the price of that energy. Obviously, domestically sourced electricity would be a much better choice in this context. However, domestically sourced electricity generated from alternative sources with a view to reducing generation-related emissions is a bit harder.

We need look no further than the recent swing in European wholesale electricity prices. Last Monday evening, prices surged to top 600 per MWh, and the only reason for that was that the wind powering turbines in Northwestern Europe died down.

As Bloomberg put it, “Wind and solar generation are set to remain low across northwest and central Europe through Wednesday, as a slow-moving weather front brings…

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