Delays in offshore wind investments lead to higher prices

The fall edition of THEMA Power Market Outlook has been published. Falling gas prices have dampened price expectations in the short term. Cost increases and little interest in the auctions for offshore wind will delay investment and result in higher prices in the medium term. In the long term, there are small changes in price expectations.

Forsinkelser i havvindinvesteringene i Norden og Europa gir høyere priser

In this edition of THEMAs Market Outlook, power prices are generally lower in the short term, compared to the February 2023 edition. This is primarily because gas (and coal) prices have fallen somewhat since our last update. We do however expect slightly higher CO2 prices towards 2030, which is expected to lift the power price level towards 2030. Higher costs for both onshore and offshore wind in the medium term, as well as delays in the deployment of offshore wind, is lifting the power price in the period 2030-2040. The long-term power price outlook shows only smaller changes compared to the last edition.

We still expect large price differences within the Nordics in the coming years. There are substantial grid bottlenecks in the Nordics, which result in low prices in the North, where there is a large generation surplus, and higher prices in the south, where price developments in Continental Europe play a more important role. The northern zones are not significantly affected by changes in fuel prices for the next years, as prices are decoupled from Continental Europe.

More details can be found in the fall edition of THEMA’s Power Market Outlooks where we analyze the future power market in three scenarios for the period 2024-2055. For more information or a demo of our market outlook web portal, please get in touch.

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