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Europe's heatwave fuels solar power surge

PUBLISHED

2023-07-19

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Europe's ongoing heatwave is fuelling a surge in solar electricity production across the continent, with the combination of increased solar capacity and sunny weather breaking generation records in several countries.

According to Ember, solar electricity generation in Europe rose by nearly 11% in the first half of the year compared to the same period in 2022, reaching a record 129.2 terawatt hours.

This upward trend is expected to continue, with July's solar production forecasted to surpass long-term averages in key solar-producing countries such as Spain, Germany, France, and Italy.

Looking ahead, Refinitiv's long-range forecasts suggest that solar output may climb even higher in August, with a projected 5% increase above the long-term average in these countries. This protracted heatwave is driving solar production to new heights across the continent.

The significant growth in solar generation throughout Europe is driven by the substantial increase in installed capacity. Data from Ember shows that embedded solar capacity in Europe surged by close to 20% in 2022 compared to the previous year, with double-digit growth observed in all major solar-producing nations in the region. Germany, the top solar generator in Europe, increased its capacity by 12.1% to 66.55 terawatt hours, while Italy, the second-largest generator, experienced an 11% capacity boost.

The Netherlands achieved a remarkable milestone in 2022 by increasing its installed solar capacity by a record-breaking 51.5%. As a result, it surpassed Spain as the third-largest solar capacity nation in the region. Spain, the fourth-largest nation, also witnessed a notable increase in solar capacity of just over 28%.

While installed solar capacity is crucial for increasing solar power generation, a country's theoretical solar generation potential is another essential factor.

The World Bank developed a theoretical potential metric that considers solar radiation availability and the levelised cost of electricity to rank nations based on their solar production potential.

Southern European countries, with more abundant sunlight, scored higher in terms of solar potential.

Spain ranked highest in Europe with an average theoretical solar potential of 4.41 kilowatt hours per installed kilowatt-peak of the system capacity (kWh/kWp). Turkey (4.32 kWh/kWp), Greece (4.14 kWh/kWp), and Italy (3.99 kWh/kWp) also scored relatively high on the solar potential table.

In contrast, northern European countries with cloudier and shorter daylight hours scored lower on the solar potential rankings. Germany and the Netherlands, for example, scored less than 3.0 kWh/kWp.

These lower scores indicate lower efficiency levels at solar production sites compared to sunnier locations in Spain and Greece.

As a result, utilities in northern Europe are likely to rely more on other sources of clean energy generation, particularly wind power, to expand their renewable power capacity.

However, in southern Europe, solar assets are expected to deliver strong output rates this year, benefiting from uninterrupted hours of intense sunshine during the ongoing heatwave.

Author

Name Peter Milios

Peter Milios is a recent graduate from the University of Technology - majoring in Finance and Accounting. Peter is currently working under equity research analyst Di Brookman for Corporate Connect Research.