Europe Survives Biggest Stress Test as Emissions From Electricity Rose Only Slightly in 2022 (1)

Analysis by Mathew Carr

Greenhouse gas emissions output from the electricity industry in the European Union plus Britain rose only about 0.3 of 1% in 2022, as the region’s energy sector survived its biggest-ever stress test.

The region has created an energy system that not only dealt with the Covid-19 pandemic and the Russia-Ukraine war, but also a massive drop in renewable power generation and nuclear electricity output.

Europe is showing the world that the climate fight need not prevent a region from dealing with polycrisis.

See this data from clean-transition tech company Wartsila, compiled using public sources (period covered is Jan. 1-Dec. 25 2022 vs the same period in 2021).

Source: Wartsila

It’s not so surprising that natural gas power production dropped 9.3%, yet that is arguably a smaller-than-expected cut because Norway and other sources were able to make up a large portion of the reduction in Russian gas supplies.

It IS surprising that coal generation rose only 4.4%.

That is especially true when renewable generation and nuclear generation also fell, 6.1% and 18% respectively.

What was the biggest factor curbing climate-damaging emissions as GDP is expected to grow in the EU by 3.3% in 2022 (3.2% in the euro area)?

In total, CO2 emissions barely rose because the total generation fell 8.5%, offsetting the higher carbon dioxide output per TWh, which jumped 7.9% to 248,000 tons vs 2021. CO2 emissions from the sector rose to 648.5 million tons from 646.8 million, the data implies (with six days remaining).

This implies a dramatic increase in energy efficiency.

Looking beyond electricity, transport emissions likely rose to a higher level than in 2021 as economies further opened up after the pandemic and people travelled more. (Yet there are also big increases in energy efficiency in that industry, as well.)

The performance of Europe should encourage the U.S., the country with only 4% of global population (but with most responsibility for the global climate crisis), to pursue more aggressive climate action.

The performance also helps explain why EU carbon prices have risen only slightly this year to €83 /ton so far this year from a close last year of €82.

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Varro: The energy transition is doing very well. If you want to reduce CO2 emissions rather than virtue signal then two things matter:
1. The rate of deployment of the already mature low carbon technologies to reduce fossil fuel demand. 2022 witnessed a massive jump in solar deployment, doubling of the Chinese EV market, a further growth of stationary storage and a tipping point of heat pump deployment in Europe. To a large extent this was a response to the energy crisis. Wind had a good enough year, but it maintained momentum despite all the supply chain mess.
2. Innovation and crossing the valley of death for new energy technologies in hard to abate sectors for the transition to go all the way. From alcohol to jet bio pathways to venture capital investment into fusion, 2022 was a year of exciting innovation in energy. Important hard to abate solutions such as green H2 in steelmaking or direct air capture started industrial scale deployment a decade ahead of the low carbon scenarios.

These two successes are not simply independent of a responsibly maintaining oil and gas supply during the transition but depend on it: An energy crisis can easily undermine the political coalition for the transition as it disproportionately hits rural, lower income people.

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