2020 was an exceptional year for power prices. Weather phenomena and Corona sent power prices on roller coaster rides across Europe. At the same time, the EU strengthened its targets for the energy transition and adopted ambitious targets for both renewable energy and hydrogen.
The long-term implications of the EU’s revised strategy are analysed in the autumn editions of our power price outlook reports for the Nordics, Continental Europe, Southern Europe, and the Baltic area (incl. Poland). Power price risks are discussed using our three scenarios “Best Guess”, “Emissions Eliminated”, and “Technotopia”. The scenarios address the key uncertainties related to future market, political and technological developments.
Special issue Nordic report
Nordic power prices experienced a dramatic fall in 2020 due to a combination of high precipitation, high wind power generation and low demand after a warm winter. The resulting prices have been particularly challenging for Nordic utilities and brought into question firms’ hedging strategies. In our special issue for the Nordic market, we discuss whether 2020 was the exception or an indication of market pressures that will become more common in future years, as well as what this implies for hedging strategy. We also discuss the current price gap relative to the German market and to what extent it can be explained by fundamental factors and weather risk.
Special issue European report
In Continental markets, wind and PV will play a far more dominant role in the future power generation mix. As a result, it is becoming increasingly important for investors to stay on top of weather risks and the market value of renewable investments, as well as their impact on PPAs. Our special issue for the European report discusses the implications of weather risk on capture prices and on PPA and location decisions for new renewable investments.
THEMA’s power price outlook reports cover the Nordic market, Central and Western European Markets, Southern Europe and the Baltic region (incl. Poland). We also publish a Green Values report covering carbon markets, certificate markets, GOs and other support schemes, as well as a Technology Outlook report.
