Spring 2022, 38th edition (2022 – 2050). Scenario-based analysis with updated price prognosis for all Nordic price areas and neighboring countries.
"The large area price differences in the Nordic region are expected to last a long time. Future prices in the natural gas market have risen further and raised the price forecasts for continental Europe and the UK significantly." – Sigbjørn Seland, Cheif Analyst
Available 17th February 2022
The long-term report offers 4 scenarios with an updated base case scenario and a high and low scenario as well as a NENA scenario. The analysis is available as pdf including a spreadsheet with all relevant calculations from the analysis.
We include price forecasts for the Nordic and German System and all Nordic area prices up until 2050, plus price projections for France, UK, The Netherlands, Poland, Estonia, Russia, Latvia and Lithuania on annual resolution.
The Nordic Power Outlook also includes a detailed annual supply and demand balance for all price areas until 2050.
Nena Analysis is one of the few analyses we use on a weekly basis and is definitely highly important. We rate all these companies every year and pick the ones to continue with, and we've been with Nena for a long time. We're always shown very good analysis and very good insights.Nicholas Martin
Head of Sourcing Europe, Norsk Hydro
Myself, as an employee in Bane NOR, have had a two decade history as customers of Nena and that’s due to the need to have a necessary tool to make good decisions on a daily basis.Jonny Glærum
Key discussions for the Spring 2022 Nordic power market outlook
The large area price differences in the Nordic region are expected to last a long time. Future prices in the natural gas market have risen further and raised the price forecasts for continental Europe and the UK significantly, which in turn affects the price level in the Nordic countries, but to a lesser extent NO3/4 and SE1/2. Significant new production in NO1/2 and 5 are many years ahead, and new consumption and increased export capacity out of NO3/4, SE1/2 are also years ahead. The underlying reasons for the very large differences in power price levels experienced in the Nordic region and throughout Europe recently give reason to expect increased consumption growth in the Nordic region in the long term and the northern price areas in particular.
Major emission reductions are needed on the road to a carbon neutral Europe by 2050. The EU ETS system will not take us to carbon neutrality alone, we believe that governmental facilitation and other incentives are required to achieve the necessary abatement. Still, we expect a higher EUA price going forward that impacts the power prices in the Nordic region. We present our view on the EUA market and the necessary CO2 price to achieve a climate neutral Europe by 2050.
A massive development of renewable energy and low-carbon hydrogen will enable an extensive electrification across sectors. We explain how electricity consumption will develop on the road to decarbonisation, how the power balance will look like with the various elements of low-carbon or carbon-free production and energy storage and what is the equilibrium price of electricity on the road to a decarbonised society.
It is increasingly likely that hydrogen will be the main substitute to fossil fuels for those parts of the economy that are not suitable for direct electrification. Green hydrogen production has the potential to increase electricity consumption significantly. The extent of green hydrogen in the future hydrogen market depends on its cost competitiveness against blue hydrogen. We discuss the potential for green hydrogen production in the Nordic region and present our view on the development of the emerging hydrogen market.
The report describes in detail the various cost elements for the power system until 2050 with a focus on the development of Long Run Marginal Costs in renewable power production, energy storage, hydrogen production and hydrogen fired power plants.
A significant production of green hydrogen has the potential to even out the power price level between the Nordic countries and Europe in the long run. The Nordic region's relatively low power prices will, all other things being equal, attract investments in green hydrogen production and in the long run raise the price level closer to the level on the European mainland.
Nena Analysis builds fundamental models and methods with strong emphasis on a combination of economic theory, market models, weather impacts and marginal cost calculations.
Our analyses reveal coherence between numerous price drivers, enabling us to explain substitution pricing, and ultimately consequences for future pricing of various commodities.