Europe power capacity markets long-term pricing outlook H2 2024

As the role of renewable resources in European power markets continues to expand, existing sources of firm capacity are suffering ever increasing competition for market space from low-cost wind and solar production, with resulting increased risk of being displaced from the supply stack. With the energy crisis fresh in the minds of policy makers, the challenge of balancing the imperatives of the energy trilemma – decarbonisation, security of supply, and affordability – is growing in scale and complexity European countries are responding with different strategies to ensure sufficient flexible capacity is available to support and secure increasingly variable supply mixes, with measures including technology-neutral auctions, specific technology tenders, strategic reserves, demand response measures, etc. This analysis explores the firm capacity gap in markets, presenting capacity price outlooks and key market characteristics for Great Britain, Belgium, France, Italy, Spain and Germany.