Key discussions for the Spring 2024 edition

• Offshore Wind Power Investments
  In Norway, the first tender round for Sørlige Nordsjø II was completed 20th March at a price of 99 €/MWh. The high price shows that offshore wind power is very far from profitability without subsidies. The biggest uncertainty going forward is the extent to which government subsidies for offshore wind will remain sufficiently large to make offshore wind profitable, with significant implications for long term power prices.

• Onshore Wind Power Investments
  Onshore wind power investments in the Nordic region are declining. A high level of conflict in many areas, with numerous vetoes from local authorities, as well as failing profitability in several price areas, stops many projects.

• Slow Development of Solar Power
  Solar power investments, particularly in Norway, are progressing slowly. While the potential profitability of these projects is promising, conflicts related to land use and other factors are impeding or delaying investments.

• Long-Term Profitability of New Production
  It is imperative that investments in new production ensure satisfactory profitability for investors in the long term. Although offshore wind power is likely to see growth due to government subsidies, we assume that offshore win, as all other power generation will need to operate without subsidies in the long run. Consequently, rising costs for new production are contributing to higher long-term power price expectations.

• Impact on Demand-Side Projects
  The increased costs for new production are negatively impacting the profitability of projects on the demand side. Long term consumption growth will be dampened by rising power prices, which must eventually be high enough for investments in new power generation to achieve satisfactory profitability.

• Flexibility in Consumption Growth
  A large part of the growth in consumption will come as flexible consumption in the periods with low power prices. Technologies such as hydrogen and other Power-to-X will play an increasingly significant role in the power markets.

• Achieving Carbon Neutrality
  To achieve carbon neutrality, higher EUA (Emission Unit Allowance) prices are necessary. We provide our perspective on the EUA market and propose an alternative CO2 price that is better aligned with Europe's goal of becoming climate-neutral by 2050.

• Cost Elements for the Power System until 2050
  Our report offers a comprehensive analysis of the various cost elements within the power system, projecting developments until 2050. We focus on Long Run Marginal Costs associated with renewable power production, energy storage, hydrogen production, and hydrogen-fired power plants.

Available for pre-purchase today.

Key insights

What does the outlook offer?
The long-term report offers four scenarios with an updated base case scenario, using market prices for coal, natural gas, and EUAs, a high and low scenario, as well as our expectation scenario based on our view of long-term EUA prices. The analysis is available as pdf including a spreadsheet with all relevant calculations from the analysis.

What price forecasts are included?
We include price forecasts with an hourly resolution for the Nordic system and all Nordic area prices up to 2050, plus price projections for Germany, France, the UK, Netherlands, Poland, Estonia, Russia, Latvia, and Lithuania on an annual resolution.

Does the outlook include annual supply and demand balance?
The Nordic Power Outlook also includes a detailed annual supply and demand balance for all price areas and estimates for SRMC and LRMCs for a large number of production technologies until 2050.

Report content

Spring 2024, 42nd edition (2024 - 2050). Scenario-based analysis with updated price prognosis for all Nordic price areas and neighboring countries

The Nordic Power Market Outlook contains 90+ pages of:

• Four scenarios with an updated base case scenario, using market prices for coal, natural gas, and EUAs

• High and low scenarios

• Expectation scenario based on our view of long-term EUA prices

• And much more

  Release date: APRIL 11^th, 2024