New wind, solar and biomass power generation displaced hard coal last year – especially in Germany, France and the UK – according to a 2018 review of European electricity statistics by two leading energy policy think tanks.

Renewable energies continued to pick up last year to reach 32.3% of total power generation in the EU, up two percentage points from the previous year, according to the report, published today (30 January).

Total coal power generation fell by 6% across the EU in 2018 and is now 30% below 2012 levels, the analysis found, confirming the rapid decline of coal in electricity generation across most European countries.

“This was caused by renewables growth in Germany and the UK and by the return of hydro in Italy and Spain,” said the report by Agora Energiewende and Sandbag, two leading energy think tanks.

Overall, CO2 emissions from the power sector fell by 5% in 2018, driven by the phase-out of coal, which was particularly steep in the UK and Germany, the report said. In Britain, the share of electricity production from hard coal fell from 40% in 2012 to 5% in 2018, while in Germany it fell from 19% to 13% over the same period.

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Renewables ‘on par’ with coal and gas

Moreover, “the economics are on the side of more renewables growth,” the two think tanks argue, saying “wind and solar are – for the first time – on a par with costs for existing coal and gas plants”.

The latest wind and solar auctions in Germany landed in a price range between €45-60 per Megawatt hour, which means the cost of renewable electricity “is now similar or even below wholesale electricity prices in many countries,” said Matthias Buck, Head of European Energy Policy at Agora Energiewende.

By contrast, coal prices rose by 15%, and gas prices rose by 30% over the course of last year.

The countries with the most new renewables are also the ones seeing the biggest falls in coal, the report said, challenging the notion that countries will primarily turn to gas as an alternative to coal in the short term.

“In just six years, between 2012 and 2018, Europe’s annual CO2 emissions from coal power plants have fallen by 250 million tonnes with no increase in emissions from power generation with natural gas,” said Dave Jones, author of the study and analyst at Sandbag.

In addition, the countries that are planning to phase-out hard coal generally have plans to rapidly expand their renewables generation, the report noted, citing Denmark and the UK as examples.

“It is reassuring that Europe is phasing out coal, without creating a gas bridge for itself,” the report added.

That said, coal could fall even faster this year if gas prices falls in line with market expectations, Jones said. “Platts forecast less than 1 GW of switching at current gas prices, but 10 GW of switching if gas prices fall in line with a bearish gas forecast,” Jones told EURACTIV in e-mailed comments.

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Lignite still strong

Looking forward, the two think tanks predict that the decline of coal “will continue because three quarters of hard coal generation in the EU is in countries with coal phase-out plans”.

But the remaining quarter is almost all in Poland, which has yet to develop a coal phase-out plan. Hard coal generation in Poland has not fallen since 2012, according to the report.

The picture for lignite is much different. Half of Europe’s lignite generation in 2018 was in countries which have yet to develop phase-out plans – Poland, Czech Republic, Bulgaria, Romania, Greece and Slovenia. Electricity generation from lignite in these six countries has barely changed since the start of the decade and there are no plans yet to close them, the report said.

“It’s a tale of two coals: most of the fall is from hard coal, and not dirtier lignite,” Jones said. “Europe’s phase-out of hard coal is gathering pace, but Europe’s phase-out of lignite is only just beginning,” he added.

Solar, the next big thing

On the bright side, the two think tanks are bullish about solar energy prospects.

Solar energy accounted for only 4% of the EU electricity mix last year, but new solar capacity additions increased by more than 60% to almost 10 gigawatts in 2018, the report found. And the amount could triple to 30 gigawatts by 2022, as solar prices continue to fall (the price of solar modules fell by 29% in 2018).

“The EU so far largely missed the opportunity to profit from the very favourable solar module prices,” said Buck. But this is expected to change soon as Spain, France and Italy are now aiming for solar outputs of 45 gigawatts and more, he added.

“This makes the potential very clear and will set an example,” Buck said, explaining that solar power from new plants is now often cheaper than electricity from conventional power plants.