Commodity market report
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42 Pages

Europe power markets long-term outlook H1 2014

Europe power markets long-term outlook H1 2014

Report summary

The continuing pursuit of environmental targets presents a mounting challenge to Europe’s power markets and the companies operating in them.  With power demand suffering from the prolonged after-effects of economic recession and strong growth in incentive-driven renewable supplies, wholesale power prices are experiencing a period of significant weakness and are well below the level required to incentivise investments in conventional plant.  

What's included?

This report includes 2 file(s)

  • Europe power markets long-term outlook H1 2014 PDF - 682.84 KB 42 Pages, 7 Tables, 26 Figures
  • Europe power H1 2014.xls XLS - 1.65 MB


The power sector is rapidly transitioning to a cleaner generation mix supported by technological and regulatory changes. Regional markets and structures are adjusting to these new realities with implications on fuel demand, commodity pricing and asset values.

This Power Markets Long Term Outlook report provides a detailed analysis of supply, demand and price fundamentals, as well as the regulatory and market issues affecting regional power markets.

Use this report to examine key issues driving regulatory and economic trends and identify future growth opportunities in regional power markets.

Wood Mackenzie's detailed analysis and reliable market forecasts give you a strong foundation for your investment decisions and corporate planning. Our experienced power research analysts use high-quality proprietary gas, coal and oil markets research to help you unlock power market fundamentals and identify future growth opportunities.

  • Executive summary
    • Subsidised investment to reach policy targets - the impact grows
    • Losses of conventional generation put pressure on security of supply
    • State-aid rules and developments in national markets are changing the nature of renewable support
  • Demand
    • Industrial demand
  • Supply
    • Generation capacity
      • The affordability of renewables is a significant concern
      • The emergence of post-2020 milestones
      • Margins will weaken as the conventional plant fleet erodes
      • Gas capacity edges up while coal, oil and nuclear decline
  • Supply-demand balances
    • Generation output
      • A substantial decarbonisation of European power supply
      • Supply competition continues to pressure gas before some upside emerges in the long term
        • Power supply - change between forecasts
  • Risks and uncertainties
    • Europe is moving towards a future of low-carbon power generation
    • Emissions trading given centre stage in the long-term, but no quick fix
    • Security risks have the potential to reshape energy policy
  • Economic outlook
    • Gas prices
      • Gas price forecast
  • Policy and regulation
    • Competition
      • Third Package implementation
      • Anti-trust enforcement
    • EU emissions trading and price forecast
    • Carbon price background
      • Emissions trading scheme and energy policy development
      • Market balance and the influence of supply-side adjustments
        • Cumulative allowance balance - before and after the market reserve
      • Emissions price forecast

In this report there are 33 tables or charts, including:

  • Executive summary
    • Executive summary: Image 1
    • Executive summary: Image 2
  • Demand
    • Electricity demand
  • Supply
    • Supply: Image 1
    • Break-even costs of new-build technologies (LRMC)
    • Annual cost of new entry with wind cost reduction scenarios
    • Net capacity change (EU 28)
  • Supply-demand balances
    • Supply-demand balances: Image 1
    • Supply-demand balances: Image 2
    • Supply-demand balances: Image 3
  • Risks and uncertainties
    • Long-run economics of gas and coal generators – fuel and emissions cost parity
  • Economic outlook
    • Economic outlook: Table 1
    • GDP growth (Q1 2014)
    • Crude oil price outlook (Brent)
    • Oil product price outlook (NW Europe FOB)
    • Economic outlook: Image 4
    • Economic outlook: Image 5
    • Economic outlook: Image 6
  • Policy and regulation
    • Policy and regulation: Table 1
    • Policy and regulation: Table 2
    • Policy and regulation: Table 3
    • Policy and regulation: Table 4
    • Policy and regulation: Image 1
    • Policy and regulation: Image 2
    • Policy and regulation: Table 5
    • Policy and regulation: Table 6
    • Historical carbon (EUA) prices in ETS trading phases
    • ETS emissions, cap and allowance supply (prior to market reserve)
    • ETS allowance supply - post-market reserve
    • Policy and regulation: Image 6
    • Carbon (EUA) price forecast
    • Policy and regulation: Image 8
    • Policy and regulation: Image 9
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