EN27 Electricity production by fuel

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The contribution of different fuels in electricity production is an important parameter regarding emissions and the security of supply. Decisions concerning the use of nuclear energy are up to Member States: the principle of subsidiarity grants member states broad autonomy in deciding their energy mix subject to some specific targets for the use of renewable energy.

Electricity production from fossil fuels continues to dominate total electricity production, with a share of almost 54 % in 2005, despite the recognised environmental impacts such as emissions of greenhouse gases and other pollutants, and resource depletion. Natural gas, which causes less overall pollution than other fossil fuels, was the primary choice for new fossil-fired power plants over the general period 1990-2005 - although this was driven mainly by economic concerns. This fuel switching was one of the factors leading to a decrease in greenhouse gas emissions from public power generation over the period. However, with an increase in natural gas prices relative to coal since 1999 (IEA, 2005) as well as a decrease in hydro electricity production since 2002 due to low rainfall, the use of coal has increased in recent years and hence GHG emissions from public power generation have begun to rise again.

The share of electricity produced from gas has risen by a factor of 3 in the EU-27 between 1990 and 2005. This growth has been influenced by the liberalisation of electricity markets and implementation of environmental legislation, such as the Large Combustion Plant Directive and the requirements for investing in pollution abatement technologies to lower emissions of air pollutants such as SO2 and NOx (see EN09 for more information). However, the primary factor was economic, with low gas prices for much of the 1990s and the rapid investment in transportation infrastructure for the delivery of gas from within and outside the EU, which has also assisted its progress.

Electricity produced from coal and lignite accounted for 28.4 % of EU-27 electricity production in 2005, falling from 37.3 % in 1990. After a high experienced in 2003, production from coal and lignite decreased between 2003 and 2005. Whether this trend continues into the future will depend upon the long-term cost of gas, which is linked closely to the price of oil and has risen considerably in recent years. It will also depend upon national initiatives and environmental legislation such as the aforementioned LCPD, and in particular the EU greenhouse gas emissions trading scheme (2003/87/EC) which favours a shift to less carbon intensive fuels for electricity generation, such as gas, as well as improvements in generating efficiency.

Electricity produced from nuclear fuels continued to grow in absolute terms from the 1990s through to 2005 in the EU-27, although its share of total production fell slightly to 30.2 % in 2005. This decline is due to the fact that few new nuclear plants have been commissioned in recent years to replace those reaching the end of their lives. However, as outlined in EN 13, in recent years a shift can be seen towards building new Nuclear Power Plants (for instance in the UK, the Baltic States and Sweden, as well as the commissioning of a new reactor in Finland) and the extension of life times of existing NPP's (for instance in the Netherlands). Furthermore, the European Commission has put forward the importance of nuclear energy as one of the opportunities to combat climate change, and it is one of the main "technology avenues" in the SET Plan.

Total renewable energy sources contributed 14.0 % to gross electricity production in the EU-27 in 2005, and this share has increased by only 1.5 percentage points since 1990. Substantial growth will be required to meet the indicative EU target of a 21% share of renewable electricity in gross electricity consumption by 2010. For a detailed description of past and future trends in renewable technologies, see EN30 and EN29.

The fuel mix for electricity production in the new EU Member States is rather different to the EU-15 due to historic and economic reasons. The traditional electricity industries in the region were originally vertically integrated monopolies controlled by central governments, resulting in a large share of coal/lignite and nuclear in the electricity production.

Overall, fuel switching within electricity production has made a benefit to the environment. However, this trend has slowed in recent years. A significant portion of these benefits has been counteracted by the rapid increase in overall final electricity consumption of about 28.7% from 1990 to 2005 (see EN18) leading to an increase in overall electricity production of about 33 % over the same period.