The easing of Covid-19 confinement measures made sure that demand for gas and electricity in the third quarter of 2020 was much closer to “normal levels” than the exceptional figures seen in the first and second quarters of 2020. Third quarter consumption figures were nevertheless well below those in the same period of 2019, according to the Commission’s quarterly reports on gas and electricity markets published today.
The electricity market report shows that the lifting of lockdown measures and easing of restrictions on social and economic activity helped power demand reach pre-pandemic levels in September in many areas. The structure of electricity generation was influenced by relatively high carbon prices, weak demand, improved hydro availability and rising solar generation which all combined to push out conventional fossil-based power plants. As a result, nuclear generation fell by 16% year-on-year (-28 TWh) and its share in the mix, at 23%, dropped under that of gas (24%). Coal generation suffered losses as well, falling by 11% year-on-year (-11 TWh) due to rising carbon costs. Gas-fired power plants managed to keep their output unchanged thanks to continued coal-to-gas switching.
High water levels (hydro) and rising solar generation drove up renewable energy generation by 21 TWh – a 33% increase year-on-year – thereby giving a 37% share in the power mix in the third quarter. This was higher than in other major economies.
Demand for electrically chargeable passenger vehicles (ECVs) kept on rising over the summer as Member States expanded support policies aimed at incentivizing purchases. More than 273,000 new ECVs were registered in the EU in Q3 2020. This was the highest quarterly figure on record and translated into a remarkable 10% market share - almost two times higher compared to China.
The gas market report shows that third quarter gas consumption in the EU was slightly down (0.6% year-on-year), amounting to 71 billion cubic metres (bcm). With gas production down by 29% (below 12 bcm), gas imports fell by 6% (down to 77 bcm) with LNG imports 15% lower.
In Q3 2020 the TTF spot price doubled and reached 12 €/MWh by the end of September, helped by LNG cargo cancellations, maintenance works on some important infrastructure, e.g. gas fields in Norway, and by the generally positive mood on energy commodity markets. However, gas hub prices in Q3 2020 were still down by 19-27% year-on-year.
Retail gas prices for households and for industry decreased by 12% and 6% respectively in the third quarter of 2020 (relative to Q3 2019) for medium annual consumers, reflecting the fall in wholesale gas prices in the previous two quarters.
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