New Volue Analysis: Falling Prices Ahead in Long-Term Forecast for Electric Power in Central Europe
Oslo, 2 November 2022: Volue ASA (OSE: VOLUE)
In the latest edition of the Long Term Report, Volue analysts attribute the expected fall of power prices to simulated falling gas, coal, and carbon (EUA) prices as well as to the growth of renewables in Europe.
According to the report, gas-fired generation will remain important in the long term, affecting the price margin in all countries and serving as a major balancing element for weather-dependent renewables.
Although wind and solar have not accelerated massively over the last two years, Volue analysts believe that the ambitious country-level plans and the recent EU response to energy security will ensure the growth of renewables leading up to 2030.
“EU member states have been given ambitious climate and energy targets that are bound to produce results. By 2030, we expect a large shift away from coal-fired generation to renewable generation based on wind and solar,” says Espen Andreassen, Senior Analyst at Volue Insight.
Germany has over the last few years embarked on an ambitious coal decommissioning policy as a central measure to abate its greenhouse gas emissions. But a full decommissioning by 2030 seems to be too challenging, and we expect the exit can be accomplished some years later.
In addition, the Netherlands and the UK have beefed up their greenhouse gas emission targets considerably, with their tremendous offshore wind plans expected to alleviate the reliance on fossil fuels in the power sector.
The analysts observe hydrogen promotion becoming important towards 2030, with 10 Mt of green hydrogen production envisaged in the EU.
In the years leading up to 2030, the integration among the Central European countries will be stronger because of new interconnectors becoming operational.
“This will lead to power price differences in the region gradually diminishing between 2022 and 2026,” says Olav Johan Botnen, Senior Analyst at Volue Insight.
The analysts believe that although the focus during the energy crisis is on the high prices, the future EU power market design may focus on keeping renewables profitable.
Looking beyond 2030, Volue analysts expect a nuclear power renaissance in the period 2031 – 2040.