New Price Forecasts Show Increasing Value of Flexibility

12. March 2018 | News

Power prices will become more volatile, increasing the value of flexibility. Our new price forecasts for the Nordic and European markets demonstrate this trend, which is due to investments in intermittent generation and increased interconnector capacity.

With additional volumes of intermittent generation and new cables coming online, we see that large flexible hydro generation can realise increasing price premia compared to the average price level in the future. This is particularly true of plants with large reservoirs, which are able to exploit both seasonal and hourly price variations.

Thanks to the abundant flexibility in the Nordic power system, the cannibalisation factors for wind in Norway and Sweden are low compared to other countries in Europe, such as Germany. This makes Norway and Sweden attractive places for wind investors. In order to avoid overinvestment and a price collapse, it is however important that Sweden develops a well-functioning stop mechanism in the elcertificate market.

THEMA’s portfolio of price forecasts include reports on Nordic power, Continental power and elcertificates. They are delivered as to-the-point pdf reports and excel files, providing detailed results and key assumptions. A workshop to discuss assumptions and results is also included in the package.