Nordic Power Market Outlook

StormGeo Nena
Nena Analysis

Fall 2021, 37th edition (2022 – 2050). Scenario-based analysis with updated price prognosis for all Nordic price areas and neighboring countries.

"Since March 2021, SvK, the Swedish TSO, has introduced extensive restrictions in the power grid from Finland to Norway and internally in Sweden. The restrictions have a major impact on area prices and will potentially significantly affect the further development of wind and solar power in the Nordic region." – Sigbjørn Seland, Cheif Analyst

Available 20th October 2021

Key insights

What does the outlook offer?

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.

What price forecasts are included?

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.

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 until 2050.

Details and Specifications

Key discussions for the Fall 2021 Nordic power market outlook

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Grid restrictions in the Nordics:

Since March 2021, SvK, the Swedish TSO, has introduced extensive restrictions in the power grid. The restrictions apply from Finland to Norway and internally in Sweden. It is highly uncertain how long the restrictions will last, as it is due to several different factors. The restrictions have a major impact on area prices and will potentially significantly affect the further development of wind and solar power in the Nordic region. We discuss the probable consequences of SvK's limitations.

Soaring global fuel prices:

As the global economies emerge from the pandemic, the demand for energy and commodities has seen a significant increase. Throwing a cold recent winter and a very warm summer on top, there has been a rally in the fuel markets. Natural gas and coal prices are now at record or near to record levels. We explain the current situation and its influence on the Nordic power prices and presents our views on the development of these markets in the longer term.

Decarbonization:

Major emission reductions will take place through massive development of wind and solar power that allows extensive electrification. 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.

CO2 price:

If all emission reductions should come as a function of the EU emission cap and trade system alone, a very high EUA price is required to meet the reduction targets. For many reasons, we find this scenario to be unlikely and expect facilitations from authorities alongside the EU ETS. We present our view on the EUA market and the necessary CO2 price to achieve a climate neutral Europe by 2050.

The road towards a climate neutral EU economy:

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.

Cost elements for the power system until 2050:

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 onshore and offshore wind power, solar power, battery storage, hydrogen production and hydrogen fired power plants.

Changes in the power system:

The power system that is under development induces a need for increased flexibility and we show how the power price formation is expected to develop. This includes the development in the cannibalisation factor for wind and solar power plants.

Available 20th October 2021.

Speak to one of the StormGeo Nena team today and discover how our power market analyses can help you. The report is available 20th October 2021.

Nena Analysis

Nena Analysis

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.

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