NORDIC POWER OUTLOOK

Nordic Power Market

Outlook 2022 - 2050

Fall 2021, 37th edition

Available from October 20th

Glacier and river

Key discussions for the Fall 2021 edition

  • 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.

Report content

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.

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.

The analysis is available as pdf including a spreadsheet with all relevant calculations from the analysis.

Chief analyst Sigbjørn Seland holds presentation

Nordic power workshop

StormGeo offers a workshop where pre-agreed topics related to the Nordic power market are presented and discussed. For best use of a workshop we recommend to add the most recent “Nordic Renewables Outlook 2022-2050”. Use this opportunity to enhance your understanding of the market and to challenge us.


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NORDIC RENEWABLES OUTLOOK

Why not add a long term analysis on Nordic Renewables

StormGeo launches updated long term report on Nordic Renewables until 2050 on October 27th. We highly recommend to include this report as the elcert and power markets are strongly interlinked.