Europe power market is expected to grow at a CAGR of more than 5.6% during the forecast period. The Europe Union (EU) is in the process of transforming its economy with the aim of minimizing the emission of greenhouse gases (GHG). Electricity is expected to play a key role in this low-carbon transformation. Factors like rising demand for electricity from a clean source of energy and a growing share of electricity from renewable sources are expected to reduce GHG emissions from electricity generation. In addition, the share of electricity in total energy use is expected to grow, especially in the transport sector (electrically chargeable vehicles) and in heating and cooling. Such widespread electrification, in combination with low-carbon electricity production, is expected to drive the Europe power market. The phasing out of coal-based power plants in the country, which had a major effect on demand for power plants, continues to promote the use of renewable power sources. However, the effect of COVID-19 is likely to decrease the investment in the power sector, which in turn is expected to hinder the growth of the market studied in the coming years.
- The renewable energy sector is expected to have significant growth in the Europe power market owing to the region’s renewable generation potential and upcoming projects.
- The European power market is undergoing significant changes. The EU has set an ambitious goal of reducing its greenhouse gas emissions by 40 per cent by 2030. This opens up opportunity for investors in the market to invest in renewable energy sources such as wind and solar photovoltaics.
- Norway is expected to have significant growth in the Europe power market during the forecast period.
Key Market Trends
Renewables is Expected to Witness Significant Growth
- Renewable energy segments mainly consist of wind, solar, and other renewable sources excluding hydropower in Europe. They are an environment-friendly and renewable energy source. Renewables accounts for a significant share in total power generation. As of 2019, Europe has 571.36 GW of total renewable energy installed capacity.
- In the structure of the electricity mix, the generation in renewable energy was influenced mainly by the continued decline in power generation from coal and lignite owing to the increase in renewable generation capacity. In 2019, compared to the previous year, Europe’s share of renewables rose from 31% to 35% in which the growth of wind energy holds a major share.
- Rising renewable generation displaced a significant part of the fossil fuel-based generation. Wind-powered electricity was a major contributor to increased renewable output. The annual decrease in the power sector’s CO2 emissions was estimated at 12% in 2019. Of that, Germany accounted for more than 40% of the decrease.
- The total combined output of solar, wind and biomass generation in the EU increased by 8% year-on-year to 185 TWh in 2019. In 2019, the EU’s electricity sector decreased its greenhouse gas emissions by approximately 12%, bringing a substantial contribution to Europe’s decarbonization efforts.
- The increase demand of renewables due to the declining cost of renewable technologies clubbed with the government focus on reducing emissions by increasing the share of renewable is likely to foster the growth of the renewable energy segment in power market during the forecast period.
Norway is Expected to Witness Significant Growth
- In Norway, most of the electricity production comes from renewable energy sources. Hydropower is the source of most of the production. In addition, wind and solar energy also contribute to Norwegian electricity production.
- Production and consumption of energy from renewable sources has been steadily increasing. As of 2018, the generation of renewable energy in Norway was 4.1 TWh and the total electricity generation has reached 147 TWh. There is considerable potential and growth in renewable power generation, and the government expects the total share of renewable power generation to rise in the coming years.
- Wind energy has the greatest potential for exploitation in Norway. Wind power accounts for only a relatively modest share of production capacity but is dominating investments and holds an installed capacity of 2444 MW in 2019. About 3.9 TWh of electricity was generated in 2018.
- Factors like cheaper energy storage, reduced cost, smart grids, and digitalization are drivers for solar power production. Norway is in the development stage in solar power production. The installed capacity has reached 90.4 MW in 2019 with a growth rate of 30 % and produced 0.1 TWh of power in 2018.
- Hence, Norway is expected to have significant growth in Europe power market during the forecast period.
Europe power market is fragmented. Some of the major key players in this market include Statkraft AS, Enel Green Power S.p.A, National Grid plc, Electricite de France SA, and Agder Energi SA.
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