Power Price Uncertainties in the 2020s: Gas Price Changes and Nuclear Downside

Report Summary:

In response to major, recent changes in the market background, this analysis updates our power price and supply outlook to 2030 for Germany, France, Great Britain, Italy, Iberia, Netherlands and Belgium. The analysis provides a framework for subsequent analysis as further market background changes emerge.

Key findings include:

• Market average power prices are forecast to be around 200 EUR/MWh in 2022

• a 30 EUR/MWh reduction on our previous view. In 2022/24, the nuclear downgrade becomes a key driver of change, adding over 10 EUR/MWh to the prices in most markets.

• Lower French nuclear output leads to a material weakening of the market's supply balance, offset by a reduction in net-flows to neighbouring markets, with movements driven by the relative cost of available gas-generation in those interconnected markets.

• Relatively lower gas prices in the GB and Iberian markets support gas-fired generation, with marked increases in exports to France to fill the supply gap.