Key electricity trends, 2018

For the first time, natural gas overtook coal to become the leading source of electricity in the OECD in 2018, accounting for 27.4% of the mix compared to 25.4% for coal. Meanwhile, the combined contribution of all renewable sources was also responsible for 27.4% of electricity generation, led by hydro (13.8%), then wind (7.0%) and solar (3.0%).

The vast majority of the increase in generation from 2017 to 2018 came from the United States. While generation from non-renewable sources is growing strongly in the United States, particularly from natural gas, renewable energy generation is growing quickly in Europe, certainly a reflection of policy efforts to decarbonize its electricity mix. The same is true in OECD Asia Oceania, where non-renewable electricity generation fell by 12.4 TWh, especially in coal and oil, while generation from renewable energy technologies grew considerably (+24.5 TWh).

OECD net electricity production grew by 1.9% (+195.2 TWh), reaching 10,682 TWh driven primarily by natural gas, which increased by 156.4 TWh (+5.6%), up to 2,928 TWh. The share of coal continued the decrease that started in 2014, falling to 2,710 TWh. Overall, fossil fuels generated an additional 41.4 TWh compared to 2017.

All sources of renewable generation increased in the OECD during 2018. The largest increases for renewable technologies were wind (+51.9 TWh, +7.5%) and solar (51.8 TWh, +18.9%). Other renewable sources also increased but by more modest amounts: +25.9 TWh from hydro, +12.0 TWh for combustible renewables and +2.3 TWh from geothermal.

The use of coal for power generation is decreasing in most of OECD countries, with a total decrease in the OECD of 104.6 TWh in 2018 compared to 2017 (-3.7%), down to 2,710 TWh.

Large reductions were observed in the United States (-62.5 TWh, -5.0%), Japan (-12.7 TWh, -3.7%), Germany (-11.6 TWh, -5.0%) and the United Kingdom (-5.6 TWh, -25.5%). In contrast, Turkey increased its electricity production from coal by 15.2 TWh (+16.5%) – a switch from gas to coal that goes against the more common trend of coal-to-gas.

Out of all sources of power generation, natural gas increased the most, up by 156.4 TWh (+5.6%), to 2,928 TWh in 2018 – natural gas is now, for the first time, the leading source of electricity in the OECD. The main source of this growth was the United States, adding 188.9 TWh of additional generation from gas-fueled plants; followed by Korea with +34.3 TWh (+28.7%). However 21 of the 35 OECD countries actually decreased gas consumption for power generation, including Turkey (-17.6 TWh, -16.9%), Australia (-11.1 TWh, -20.2%), and Japan (-10.5 TWh, -2.7%). 

In 2018, nuclear generation increased by 11.6 TWh in the OECD (+0.6%) compared to 2017, reaching 1,868 TWh. More than two-fifths (43.2%) of all OECD nuclear generation during 2018 was from the United States, with a further one-fifth (20.7%) from France. All other countries generating nuclear power had just single-digit shares.

Growth of nuclear power generation was highest in Japan (+19.7 TWh, +71.0%), which restarted 4 more nuclear plants in 2018; and France (+14.1 TWh, +3.7%), which had higher availability of its nuclear facilities compared to 2017. More modest increases were seen in Switzerland (+5.1 TWh, +26.1%) and Sweden (+2.7 TWh, +4.4%). In Switzerland, one nuclear plant came back online at the beginning of 2018, and the maintenance period of another was shorter than in 2017. In the case of Sweden, nuclear became the top source of electricity in 2018, surpassing hydro, which had been the most important source since 2014.

Conversely, Korea and Belgium saw their nuclear production decrease in 2018. Belgium’s nuclear production fell by a third, compared to the average over the last ten years, as a consequence of a major nuclear outage due to maintenance and safety-related concerns. This situation began in March and reached its most critical point in October, when six of the seven nuclear reactors of the country were offgrid. This marked the lowest month of nuclear generation since 2001. In the case of Korea, the decrease in nuclear generation was due to new maintenance regulations. Nuclear generation also decreased in Spain (-2.4 TWh, -4.2%) and the United Kingdom (-4.8 TWh, -7.5%) due to maintenance outages.

Hydro generation grew in the OECD during 2018 by 25.9 TWh, or +1.8%.

Southwest Europe went back to usual levels of hydro generation in 2018 after a very dry 2017, which curtailed generation.  Hydro generation in Spain, Portugal, Italy and France rose strongly, with Spain and Portugal almost doubling last year’s hydro production.

The two main hydro generators of the OECD, Canada and USA, saw a decrease in generation: -9.1 TWh (-2.3%) and -10.7 TWh (-3.3%), respectively. In the United States, although 2018 was the wettest year since the early 1980’s, there was a clear difference between the eastern part of the country (much-above-average precipitations) and the western (lower-than-average values and drought in the south-west). As the majority of US hydro capacity is located in the northwest, electricity output decreased compared to last year. Meteorological events also explain the decline in Canada, with the highest impact in hydro generation seen in Manitoba and British Columbia.

Solar saw the highest relative increase in 2018 compared to 2017 out of all electricity sources, increasing from 274.0 TWh to 325.8 TWh, or +18.9%. Leading this growth were the United States (+18.2 TWh, +25.2%), Japan (+12.9 TWh, +21.8%) and Germany (+6.9 TWh, +17.4%). Most OECD countries had double digit growth rates, with some even higher, showing the strong push in some nations in favor of this technology.

In contrast, Spain and Italy decreased solar generation by 12.6% and 7.8% respectively, due to lower-than-average solar irradiation in 2018 despite increases in capacity. 

In 2018, wind generation supplied 744.6 TWh, 7.5% more than in 2017, led by the United States (274.8 TWh), Germany (114.1 TWh), the United Kingdom (56.6 TWh) and Spain (49.7 TWh). Wind supplied 18% of the power generation in Germany, the United Kingdom and Spain. The largest increases also came from these countries: the United States (+20.6 TWh, +8.1%), Germany (+7.9 TWh, +7.5%) and the UK (+7.0 TWh, +14.1%).

As wind flows depend on pressure gradients (and air temperature), wind generation was affected by extreme weather events in 2018, such as the summer heat wave affecting in Europe, which led to a continent-wide generation drop in July; electricity output was lower than in the same period in 2015, even with the large capacity increase in the three years in between. Very high peaks of generation were seen in January and March. The difference between the highest and lowest monthly generation levels was one of the highest on record, with the minimum electricity output at just 38.3% of the maximum.

Combustible renewables grew by 12.0 TWh (+4.2%) in the OECD, generating 298.9 TWh of electricity in 2018. The main countries using these fuels for electricity generation are the United States (63.8 TWh), Germany (52.0 TWh) and the United Kingdom (33.3 TWh). In terms of share, Denmark and Finland produce around 18% of their electricity from renewable combustibles, the highest shares in the OECD. Significant increases in generation from combustible renewables in 2018 were seen in Germany (+4.2 TWh, +8.9%), France (+3.4 TWh, +48.6%) and United Kingdom (+2.9 TWh, +9.7%).

Geothermal generation grew by 4.9%, up to 49.3 TWh in the OECD. Turkey accounted for half of the total OECD growth in this technology (1.4 TWh, +26.7%). The other main contributors were Iceland (+839.8 GWh, +16.2%) and the USA (+531.8 GWh, +3.4%).

Total renewable technologies accounted for 71.8% of the increase in generation in the power sector during 2018, continuing a trend that has seen renewables increase their share in the OECD electricity mix by 9.8% since 2008, now reaching 27.4%. 

Germany and France remain the top electricity exporters of OECD Europe, but now with less difference between them as France increased its nuclear production and so was able to export more electricity. France increased its exports by 15.3 TWh in 2018 compared to 2017, up to 76.6 TWh. Other significant exporters are Switzerland (31.9 TWh) and Sweden (30.8 TWh). .

Regarding imports, Italy was again the main electricity importer of OECD Europe by far, bringing in 47.2 TWh, followed by Germany (31.7 TWh), Switzerland (29.6 TWh), Austria (28.1 TWh) and Netherlands (27.0 TWh).

Considering net electricity trade, 20 of the 27 countries in OECD Europe decreased their net electricity exports in 2018 compared to 2017. The status of “net importer/exporter” of OECD Europe countries remained the same as 2017 with two exceptions: Latvia went from being a net exporter to becoming net importer in 2018, as hydro generation (its main source of electricity) fell heavily due to the intense drought affecting the country. Switzerland went from net importer to net exporter as nuclear generation rose. In 2018, 15 countries in OECD Europe were net importers and 11 were net exporters (Iceland has no trade partners for electricity).

France was the top net electricity exporter in OECD Europe in 2018 (63.3 TWh), regaining the top spot after Germany (48.5 TWh in 2018) led for 2 years. The countries following are Sweden (17.3 TWh), Czech Republic (13.9 TWh) and Norway (10.1 TWh), all of which had more than 80% of their electricity mix based on hydro and/or nuclear power. On the other hand, the main net electricity importers were Italy (43.9 TWh), Finland (19.9 TWh), the United Kingdom (18.3 TWh) and Belgium (17.3 TWh, almost three times its 2017’s value).