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- Margins weaken as conventional capacity is withdrawn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:
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European power supply by sourceRenewable electricity supply and targetsElectricity demand
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Break-even costs of new-build technologies (LRMC)Capacity market and strategic reserve arrangements in European power marketsLong-run economics of gas and coal generators – fuel and emissions cost parityGrowth in renewable generation capacity and share of total supplyCost of renewable support per unit of total power supply (2012)Power supply by sourceCarbon intensity of power supply (ETS markets only)Power supply - change between forecasts
What's included
This report contains:
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