Quarterly reports confirm further structural progress on renewables and security of supply on EU energy markets

EU gas and electricity markets in the third quarter of 2024 proved robust in ensuring security of supply, benefitting from some of the measures taken in recent years in terms of resilience, improved integration among EU countries and the roll-out of renewables, according to the new quarterly reports for both markets published today. Looking at the markets from July to September, the reports confirm both markets remained resilient to external shocks, strengthened cross-border flows and price convergence, and kept prices in check. Demand growth remained moderate for electricity, while demand reduction continued for gas. 

The gas market report highlights that EU gas markets continued the structural changes that started in 2022, in the aftermath of Russia’s invasion of Ukraine. In the July-September period, EU gas consumption declined further, showing  signs of stabilising at significantly lower levels than before the 2022 supply crisis. Gas imports fell a further 6% year on year and 8% relative to the 2^nd quarter. Demand for gas in power generation further contracted despite higher demand for electrical cooling during a hotter than usual summer. Storage levels remained at historic highs - reaching the 90% target in August, 2 and a half months before the deadline. This helped mitigate upward price pressures. 

Wholesale gas prices saw a moderate increase in the first part of the quarter, while resuming their decline in September. Retail prices remained on a decreasing trend year-on-year, but started a slow climb upward compared to the previous quarter. The price gap between European gas hubs and Asian markets further widened, thereby attracting more LNG cargoes towards Asia. This led to a drop in LNG imports and an increased share of pipeline gas in Europe’s gas import mix in the quarter – nearly half of which came from Norway. 

The electricity market report outlines the continued advancement in renewable power generation, with record shares (47%) in the power mix. The commentary notes considerable expansion in particular in solar power capacities, the further decline in the shares of fossil-based electricity production and a continuing year-on-year decrease of electricity prices in wholesale and retail markets, while demand growth remained moderate.

Solar generation hit a record high in the third quarter, reaching 87 TWh. Solar generation rose by 23% (+16 TWh) and offshore wind generation increased by 21% (+2 TWh). Hydropower plants improved their output by 13% (+9 TWh), while onshore wind generation rose by 2% (+1 TWh). Additional installed capacity supported higher levels of renewables generation in the quarter.

Fossil fuel generation hit a historical low at 165 TWh in Q3 2024. Fossil fuel yearly generation dropped by 11% in Q3 2024, supported by sustained renewables generation and moderate demand. In total, coal-fired generation fell by 13% (-9 TWh), and gas generation dropped by 14% (-13 TWh). Nuclear output rose by 8% (+11 TWh) in Q3 2024. 

Wholesale and retail electricity prices continued to be lower than at the same stage in 2023. The European Power Benchmark averaged 78 €/MWh in Q3 2024, 8% lower year-on-year, while retail electricity prices for households in EU capital cities were down by 6% year-on-year (241 €/MWh). 

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