EU gas-fired power output down in Aug

Spanish Market: Electricity, Natural gas
04/09/24

EU gas-fired power generation fell on the year in August, even as above-average temperatures bolstered power demand.

EU gas-fired output was 27.7TWh in August, making up 14.4pc of the generation mix, according to data from Fraunhofer ISE. EU gas-fired output was 29.3TWh a year earlier and 36.8TWh in August 2022.

Spain and France drove the overall EU drop. Spanish gas-fired generation fell to 4.1TWh from 5.6TWh, as renewable generation rose on the year. French generation dropped to 626GWh from 1.6TWh as nuclear output increased. Italy partly offset this fall as gas-fired output increased to 9.6TWh from 7.7TWh. Gas-fired generation in Germany edged up to 3.2TWh from 2.9TWh.

In Italy and Spain, usually the two EU countries with the highest summer gas-fired generation supported by strong demand for cooling, average maximum temperatures in Rome and Madrid were almost 3°C above 10-year averages. Maximum temperatures in Athens were also nearly 3°C above 10-year averages.

Above-average temperatures boosted power demand for cooling. Total power demand last month hit 193.6TWh across the EU, up from 190.2TWh in August 2023, but still down from August in every other year since at least 2015, as shown by Fraunhofer data.

Given the above-average temperatures — especially in southern Europe — and the growing use of air conditioning, the drop in power demand from pre-2023 might have been driven by weaker industrial consumption. Energy-intensive industries across Europe have continued to struggle this year with high energy costs and muted demand. German power demand in August was 36.9TWh, the lowest since at least 2010, apart from last year.

And the decrease in gas-fired generation despite higher year-on-year EU power demand came as a result of higher nuclear and renewable output, the latter of which increased to 87.5TWh from 82TWh in August 2023, driven by strong solar output of 31.6TWh, up from 23.8TWh.

Nuclear output rose to 51.6TWh from 46TWh, supported by increased French nuclear generation as nuclear unavailability decreased to 19.3GWh from 27.6GWh a year earlier.

Coal-fired generation was down by almost a quarter in August from a year earlier, falling to 6.9TWh from 9.1TWh. Clean day-ahead spark spreads for 55pc gas-fired units held a premium to equivalent dark spreads for 40pc-efficient units on most days in August in Germany, France and Italy. This suggests there was an incentive for firms to boost gas-fired generation over coal-fired generation, at times of low renewable output.

By Lucas Waelbroeck Boix

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