Europe’s power sector reached a turning point in 2025, according to Eurelectric. Record solar growth reduced reliance on fossil fuels and helped contain emissions, but persistent price volatility and weak electricity demand exposed an urgent need to accelerate electrification and scale up system flexibility to safeguard Europe’s competitiveness.

Its latest data shows 2025 power sector emissions stood at around 45% of 1990 volumes, reflecting three decades of steady progress in decarbonisation. Yet, momentum towards the EU’s 50% renewables threshold slowed – ‘showing that balancing rapid green growth with market stability and demand recovery remains a challenge’.

Solar power was the clear standout performer, reports Eurelectric. With a total generation of more than 340 TWh, solar reached 12.5% of the EU generation mix, ‘the highest share ever recorded’. Solar output rose by more than 60 TWh year on year – equivalent to Portugal’s entire annual electricity demand. This surge helped offset declines in hydro (–13%) and wind (–4%) between 2024 and 2025. Nuclear remained stable at around 24%, continuing to provide reliable baseload, while fossil fuels generation was largely contained thanks to the surge in solar output.

Wholesale day-ahead electricity prices averaged €88/MWh in 2025 – below 2023 levels but slightly higher than in 2024. Prices were higher in the first half of the year due to weaker wind and hydro output, before easing in the second half as strong solar generation and lower gas prices improved market conditions, according to Eurelectric.

Despite this moderation, price volatility persisted, the data shows. Negative prices occurred in around 3.3% of hours, while price spikes above €150/MWh accounted for 9.3% of hours – well below 2022 levels but higher than in 2024 – reinforcing the growing need for system flexibility.

At the same time, electricity prices became less tied to fossil fuel costs, according to the analysis. On average across the EU, around 74% of hours in 2019 saw power prices above the cost of gas-fired generation – a proxy for the influence of fossil fuels on power prices – compared with just 32% in 2025, showing how renewables can help decouple electricity prices from gas. ‘Unlocking these benefits fully will require accelerated investment in storage and flexibility’, notes Eurelectric.

Electricity demand remained the sector’s weakest point. Overall consumption in 2025 was broadly unchanged compared to 2024 yet remained around 7% below 2021 levels, reflecting an uneven and incomplete industrial recovery across countries, alongside continued efficiency improvements.

‘Europe is firmly on the path to greener energy, but the pace must accelerate,’ concludes Eurelectric. ‘Electrification remains the most effective lever to cut emissions, yet demand growth is essential to unlock its full potential.’

‘Renewables are reducing Europe’s exposure to fossil fuel prices, but weak electricity demand risks slowing investments. Stimulating demand is key to stabilising markets, supporting industry and keeping decarbonisation on track,’ – adds Kristian Ruby, Secretary General at Eurelectric. ‘Additional flexibility – through storage, demand response and firm capacity – is also critical to reduce volatility.’

Record year for wind and solar power in Great Britain

Meanwhile, renewable energy produced a record amount of electricity in Great Britain in 2025, according to provisional figures from the National Energy System Operator (NESO).

Wind, solar, hydro and biomass generated more than 127 TWh of electricity in Great Britain, beating the previous high of 119 TWh in 2024. Wind generated more than 85 TWh – almost 30% – of the country’s electricity last year, up slightly on 2024, according to BBC analysis of the NESO data, which covers England, Scotland, Wales and Ireland, but not Northern Ireland, which has its own electricity transmission system operator.

Notably, solar-powered electricity rose by nearly a third on 2024 levels, helped by the UK's sunniest year on record and the expansion of solar panels around the country, says the BBC. Solar panels generated more than 18 TWh – over 6% of British electricity. At its peak, solar was producing more than 40% of electricity for a small number of half-hour periods in July. According to the BBC, back in 2013, no such period had more than roughly 5% of electricity generation from solar.

Electricity from fossil gas also rose slightly in 2025, highlighting the challenge of reaching the UK government’s target of producing 95% of all electricity generated in Britain coming from renewables and nuclear energy by 2030. The analysis shows gas generated more than 77 TWh – roughly 27% – of electricity, up from 72 TWh in 2024. ‘That increase could be down to several factors, including Britain importing slightly less electricity from Europe, lower nuclear generation, the closure of the last coal power station in 2024 and higher electricity demand,’ suggests the BBC.

In 2024 clean sources produced almost three-quarters of total electricity generation for the year, according to government figures. However, these numbers differ from NESO data, which includes imports as well as some gas generation not covered by the government’s clean power definition, notes the BBC. Government figures for 2025 will not be released until later this year, ‘but the amount of gas still in the electricity mix shows there is much to be done,’ concludes the BBC.