EN26 Total Energy Consumption by Fuel

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The indicator provides an indication of the environmental pressures originating from energy consumption. The environmental impacts such as resource depletion, greenhouse gas emissions, air pollutant emissions, radioactive waste generation etc. strongly depend on the type and amount of fuel consumed.

Total energy consumption in the EU-25 increased by 12.0 % between 1990 and 2004. Over the same period, the share of fossil fuels, including coal, lignite, oil and natural gas, in total energy consumption declined slightly from 83 % in 1990 to 79.0 % in 2004, although fossil fuel consumption increased in absolute terms. The use of fossil fuels has considerable impact on the environment and is the main cause of greenhouse gas emissions. Nevertheless, changes in the fossil fuel mix have brought environmental benefits. Overall, the share of coal has decreased and coal has been to some extent replaced by relatively cleaner natural gas. However, coal consumption has remained stable since 1999 and gas consumption continued increasing.

Most of the switching from coal to gas occurred in the power generation sector. In the pre-2004 EU-15 Member States this was supported by implementation of environmental legislation and liberalisation of electricity markets, which stimulated the use of combined-cycle gas plants due to their high efficiency, low capital cost and low gas prices in the early 1990s, and by the expansion of the trans-EU gas network. Fuel mix changes in the new Member States were induced by the process of economic transformation, which led to changes in fuel prices, taxation, the removal of energy subsidies and introduction of policies to privatise and restructure the energy sector. Since 1999, this trend has slowed down, with the share of coal and lignite decreasing by 0.2 percentage points to 17.9 % between 2003 and 2004, compared to a steep decrease between 1990 and 1999 (from 27.6 % to 18.2 %). The slowing of the trend is mainly due to increased gas prices (as well as a shortfall in hydro production due to low rainfall), which have led to a switch back to more use of coal for electricity production in some Member States, such as Austria, Czech Republic, Denmark, Estonia, Finland, Italy, the Netherlands and the United Kingdom. Whether this trend continues over the long term will depend upon factors such as whether the recent rises in the price of oil lead on as expected to higher average oil price over the longer term (as the price of gas is strongly linked to it), as well as counterbalancing factors such as the introduction of the EU emissions trading scheme in 2005 which favours a switch to natural gas to help power generators reduce their CO2 emissions. Oil accounted for around 37 % of total energy consumption in 2004 and continued to be the major fuel in the transport sector. Consumption increased at an average annual rate of 0.6 % over the period 1990-2004, mainly as a result of increased demand for petrol and diesel in the transport sector, although this was tempered by a decline in the use of oil in other sectors, such as for power generation. Oil consumption is expected to continue to increase into the future but at a slower rate than at present as the growth in demand from the transport sector is expected to slow down and will be partially offset by further decreases in oil fired power production.

Renewable energy, which typically has lower environmental impacts than fossil fuels, has seen rapid growth in absolute terms, but from a low starting point. Renewables (together with natural gas) were the fastest growing energy source between 1990 and 2004, but despite increased support at the EU and national level, their contribution to total energy consumption remains low at just 6.3 % in 2004. The share of nuclear power has remained stable over the last few years, accounting for 15 % of total energy consumption in 2004. While nuclear power produces little pollution under normal operations there is a risk of accidental radioactive releases, and highly radioactive wastes are accumulating for which no generally acceptable disposal route has yet been established (see EN13 for more details).

The changes in the fuel mix meant that the greenhouse gas emissions intensity of total energy consumption fell by an average of 1 % a year from 1990-2004. However, total energy-related greenhouse gas emissions decreased by only 0.1 % per year on average over the same period (see EN-01), as rising total energy consumption has counteracted some of the environmental benefits of the fuel switch.

Total energy consumption in the EU-25 increased during the period 1990-2004 at an average rate of 0.8 % per year. This was less than half the average growth rate of the economy over the same period (2.1 % p.a.) and, as a result, the energy intensity of the economy declined (see EN17). Important factors behind the relative decoupling in total energy consumption were the economic recession in the pre-2004 EU-15 in the early 1990s, combined with economic restructuring in many of the new EU-10 Member States and in Germany after reunification.

Projections indicate that under a baseline scenario the shares of nuclear and oil in total energy consumption would decline over the period to 2030, with rising shares of natural gas and renewables (PRIMES energy model, European Commission 2006). The share of coal and lignite is expected to decline until around 2020 when it starts to rise again, primarily due to its low relative cost and a need to meet increasing overall demand for energy. The rate of increase in total energy consumption is expected to slow after 2010 due to restructuring in the economy, with continued moves away from energy intensive industries towards lighter industries and services with lower energy intensity (see EN21), and improvements in efficiency. Modelling of a low carbon future, through the introduction of a carbon permit with a price of up to €65/tCO2, predicts a much more rapid decline in the consumption, and hence share, of coal and lignite, which would be replaced by a more rapid expansion in the share of renewables as well as slightly higher levels of natural gas and nuclear energy consumption (EEA, 2005). The level of total energy consumption would still increase under such a low-carbon energy scenario, but at a slower rate than in the baseline projections due to more rapid improvements in efficiency.

Even in the absence of a carbon-permit price substantial reductions in energy consumption could be realized by a dedicated energy efficiency policy as modeled in a scenario being prepared for DG Transport (European Commission, 2004, 'Energy Efficiency Case'). This scenario assumes that energy efficiency policies and measures were implemented along the lines of the Action Plan on Energy Efficiency. As a result, EU-25 gross inland energy consumption would remain almost stable between 2000 and 2030 instead of increasing by 19 % under a baseline scenario, resulting in a decrease of CO2 emissions of 4.5 % compared to 1990 instead of a rise of by 14 % as in the baseline.