Commodity Market Report
Europe power markets long-term outlook H1 2015
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
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.
Table of contents
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Executive summary
- Pollutant control and renewables reduce the role of coal
- Power supply from gas to peak in the mid-2020s
- Renewable supply to the fore
- The challenges of de-carbonising power supply
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Demand
- Slow recovery and continued weak demand in mature markets
- Industrial transition provides contrasting growth prospects
- Residential and commercial demand offset by efficiency improvements
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Supply
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Generation capacity
- Low carbon growth puts pressure on conventional technologies
- Rising costs lead a reassessment of support measures
- Post-2020 policy targets guide investment
- Margins weaken as conventional capacity is withdrawn
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Generation capacity
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Supply-demand balances
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Generation output
- Gas replaces lost output from coal, oil and nuclear
- Substantial decarbonisation as renewable growth continues
- Coal's decline gathers pace as capacity retirements mount
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Generation output
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Risks and uncertainties
- Fuel & emissions cost uncertainty
- Expansion of nuclear new-build
- Renewable power costs and support – drivers or barriers to growth?
Tables and charts
This report includes the following images and tables:
- European power supply by source
- Renewable electricity supply and targets
- Electricity demand
- Break-even costs of new-build technologies (LRMC)
- Capacity market and strategic reserve arrangements in European power markets
- Long-run economics of gas and coal generators – fuel and emissions cost parity
- Growth in renewable generation capacity and share of total supply
- Cost of renewable support per unit of total power supply (2012)
- Power supply by source
- Carbon intensity of power supply (ETS markets only)
- Power supply - change between forecasts
What's included
This report contains:
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