Exhibit 2 Low availability from nuclear and hydro sources led to increased coal output in 2022.
Power generation in Europe, 1 2021–22, TWh 2
2021 3
2022 4
Dispatchable power
Intermittent power
+6%
+12%
–19%
+15%
+23%
–14%
564
485
419 446
367
335
297
292
285 319
134 164
Nuclear
Gas
Coal
Hydro
Wind
Solar
Factors for 2022 increases or decreases
French fleet under maintenance (32 out of 56 reactors)
Despite high prices, gas used to fill gap left by lower nuclear generation
Compensating for reduction of other dispatchable sources
Impact of drought, especially in southern Europe
Increased installed capacity (~7%) and favorable weather vs 2021
Increased installed capacity (~15%) and favorable weather vs 2021
1 Austria, Belgium, Bulgaria, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Italy, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, and United Kingdom. 2 Terawatt-hours. 3 January to September 2021. 4 January to September 2022. Source: Ember; European Network of Transmission System Operators for Electricity (ENTSO-E); Fraunhofer; International Renewable Energy Agency (IRENA); National Grid; McKinsey analysis
McKinsey & Company
homes, for instance, are both up by more than 30 percent, while demand for electricity in iron and steel manufacturing is up 17 percent. 5 As a result, Europe faces the real possibility of shortages in dispatchable power—sources that are critical for balancing loads across the power system and ensuring there is enough electricity available at times of peak demand. To avoid this
mix. That proportion dropped to 15 to 20 percent in 2022 and is likely to decline further this year. 4
At the same time, demand for electricity continues to increase because of decarbonization and electrification throughout various sectors. These structural trends mean that Europeans are using more electricity than ever. Sales of electric vehicles (EVs) and electric heat pumps for buildings and
4 McKinsey Energy Insights’ EU PipeFlow and LNGFlow; Cedigaz. 5 EV sales are from the first half of 2021 compared with the first half of 2022 and include sales from the European Free Trade Association, the European Union, and the United Kingdom. Heat pump sales include 21 European markets; sales are 2020 compared with 2021. Iron and steel demand includes Austria, Belgium, Bulgaria, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Italy, the Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, and the United Kingdom. Industry demand considers 2020 compared with 2021. European Heat Pump Association; EV-Volumes; IHS Markit (light vehicle sales forecast July 2022).
Accelerating the journey to net zero
42
Made with FlippingBook Online newsletter maker