Market Analysis

Power producers in the United Kingdom reduced the use of fossil fuels in electricity generation by 16% during the first five months of 2024 compared to the same period in 2023, according to data from the think tank Ember.

Electricity generated from fossil fuels totaled 33.55 terawatt hours (TWh), the lowest for the January to May period in at least nine years, marking the third consecutive year of decline in UK power generation from fossil fuels during this timeframe.

Additionally, emissions from fossil fuels in the UK's power sector decreased by 14%, equivalent to a reduction of over 3 million metric tons of carbon dioxide (CO2) from January to May 2024 compared to 2023.

Power firms increased output from clean energy sources by 10% during this period, resulting in clean power accounting for a record 66.1% share of total electricity generation.

The UK's share of clean electricity generation for the first five months of 2024 exceeded the European average of 63%, outpacing Germany (59%) and Italy (54%), according to Ember data.

Despite these advancements, total electricity output in the UK contracted by nearly 2% from January to May compared to 2023, the lowest level for this period in at least nine years. Factors contributing to this decline include improved energy efficiency measures among consumers and increased behind-the-meter solar generation in households and businesses.

However, sluggish manufacturing activity has dampened electricity demand, exacerbated by subdued consumer demand across Europe and changes in trade terms post-Brexit. A recovery in manufacturing activity could lead to higher power demand, potentially straining power producers to increase generation from both fossil fuels and clean sources.

One of the challenges in clean power generation in the UK is the variability of wind speeds, which significantly impacts wind power generation. Despite wind generation increasing by 11% from January to May compared to 2023, wind generation levels typically decrease during the summer months due to lower wind speeds.

If wind speeds follow the same trend in 2024, power producers may face challenges in maintaining electricity supply levels without relying more on natural gas generation. Solar power generation, which peaks during summer, could partially offset this decline, although solar capacity in the UK is half that of wind capacity and operates only during daylight hours.

Looking ahead, the UK's power system is expected to continue its transition to cleaner energy sources as older fossil fuel power stations are retired and more renewable generation capacity is brought online.

Paraphrasing text from "Reuters" all rights reserved by the original author.