LITTLETON, Colorado, July 2 (Reuters) - Germany's power sector is relying on cuts made to fossil fuel use for the lion's share of recent decarbonisation efforts, but will need a sustained jump in clean generation to ensure a lasting shift in power production away from polluting fuels.

German power generators cut fossil fuel-powered output by 19% through the opening half of 2024 from the same months in 2023, data from LSEG shows.

That compares to just a 2.1% rise in clean power generation from the first half of 2023, and indicates that power firms are mainly relying on cuts to fossil fuel use to make progress against energy transition aims.

Those cuts to fossil fuel use have helped slash German power sector emissions, which totalled 70 million metric tons of carbon dioxide (CO2) for the first 5 months of 2024 compared to 88 million tons during January to May of 2023, data from think tank Ember shows.

But sluggish industrial activity has meant that overall power demand totals are also down so far this year, which has allowed power suppliers to reduce total generation by more than 6% compared to the first half of 2023.

If Germany's manufacturing and industrial activity picks up momentum over the remainder of 2024, total power needs may climb in tow and could put pressure on power suppliers to increase output from fossil fuels to meet that extra demand.

COAL CUTS

Coal-fired generation took the brunt of the fossil fuel output cuts, dropping by just over 17% in the first half of 2024 from the same months last year.

To make up for lower coal-fired generation, output from natural gas plants increased by 5% in January-June 2024 from the first half of 2023, while generation from oil-fired plants rose 12% and coal-derived gas plants increased output by 3.7%, LSEG data shows.

Altogether, total generation from fossil fuels contracted by 19% during the first half of 2024, and follows a 24% contraction in the whole of 2023 from the year before.

CLEAN MAJORITY

The drop in fossil fuel generation has resulted in clean power sources securing a majority share of Germany's power generation mix every month since December 2022.

The share of clean power in Germany's power generation mix climbed to a new high of 64.6% during the first half of 2024, compared to 59.3% during the same months of 2023 and an average share of 61% for 2023 as a whole.

That said, power firms have been unable to offset all the cuts to fossil fuel use with growth from clean energy sources, especially after Germany shut its national nuclear reactor fleet in April 2023.

Nuclear reactors had accounted for around 8% of total power generation in 2022, so the complete cessation of such a notable source of clean energy has been hard to replace.

Wind farms have emerged as Germany's largest source of clean power, and accounted for an average share of 37% of total power generation last year, according to LSEG.

Solar is the second largest source of German clean power, and generated around 17% of all power last year, while hydro assets generated around 4%.

SEASONAL SWINGS

During the first half of 2024, wind power generation climbed 7.6% from the same period in 2023, while solar generation rose by 12.8% and hydro output climbed 5.4%.

Solar output is liable to climb further during July and August during the height of summer, and could account for around 30% to 35% of total power generation during those months.

However, generation from wind farms and hydro dams historically dip during the summer months due to slower wind speeds and reduced water flows from reservoirs.

For power producers who need to maintain power supplies around the clock, the drop off in wind and hydro output may set the stage for greater generation from natural gas plants, especially if German manufacturing activity picks up steam.

And any such increase in gas-fired output could in turn open the German power sector to accusations of backsliding on power clean-up commitments.

To guard against that in the future, power firms will need to substantially increase total generation from clean sources and also substantially raise the storage capacity that can bridge periods of reduced clean generation.

The build-out of an entirely clean power generation system may take several more years and continued high levels of annual investment in clean generation and battery construction.

Until then, further periods of clean power growth followed by flare ups in fossil-fired output look likely.

(Reporting by Gavin Maguire; Editing by Sonali Paul)