High fuel and carbon prices low availability and low hydro inflows have led to a price rally. We address these developments and discuss the implications for power markets. Our special issues discuss the future of the EU-ETS, and the Baltic markets.
Gas and coal prices have increased, so have EUA prices as a result of the EU-ETS reforms. A cold winter and an unusually dry summer also contributed to increasing power prices. At the same time, we continue to observe a drastic cost decline for new renewables.
In our power price forecast reports, we discuss the consequences of these developments, together with implications for generation mix, demand, capacity mix, and trade. The Nordic power price forecast covers Norway, Sweden, Finland, and Denmark. The European power price forecast covers Germany, France, Netherlands, Belgium, and the UK. We also updated our outlook for the Nordic elcertificate market.
We simulate three different scenarios. The previous “Prosumer” scenario was replaced by a new scenario called “Technotopia” in which we assume an even higher reduction in LCoE for new renewables than we assume in the other two scenarios.
In the European power price forecast, we have a special chapter on the future of the EU-ETS. We developed a detailed abatement cost curve for the power sector and the industry sector and applied a new model framework for simulating the interaction between CO2 certificate price and investment decisions.
For the Nordic forecast, we have a special chapter on the Baltic region, which is of increasing importance and offers interesting investment opportunities.