December update of LONG-TERM POWER OUTLOOK is now available to the customers.
The main changes compared to our main report published in June 2018 are:
- Updated Danish and Swedish plans to increase wind power production above previous target levels
- Updated Polish energy strategy in which Poland aims to considerably increase production of wind and solar power although coal would remain as the backbone of the national power system
- Recently published plans to decrease nuclear and phase-out coal power production in many European countries
- Stochastic wind power modeling to investigate impact of increasing volatility due to increasing intermittent production
The transition of the European power system is going on with accelerating rate. A significant amount of onshore wind power is entering the Nordic markets during the next several years. The target of the common Swedish and Norwegian certificate scheme for the year 2021 will be surpassed by several TWh and it seems that the target for the next decade will be reached well before the end of the decade. Due to a rapid reduction of the costs, offshore wind is also expected to have an important role in Europe’s power mix during the next decades. However, a decreasing capture rate for wind and solar power will increase the break-even level for the intermittent wind and solar power production above their levelized costs, and thus, decelerate deployment of intermittent power production in the coming decades.
Along with the higher share of intermittent production, volatility in the European power system will increase in the coming decades. At the same time, many European countries are planning to phase out coal and nuclear from the power mix reducing the baseload capacity in the power system, and volatility will increase further.
Closer integration of the European power system is a priority policy area by the EU’s Energy Union and it is needed to balance the variation of the increasing intermittent production in different countries. On the other hand, due to a closer integration, changes in the continental European power systems will also more easily pass on to the Nordic countries.
This year our Long-Term Power Outlook report will discuss these topics in more details. We have put more focus on the development of longer-term volatility by using a new model version with increased accuracy within week modeling. As well, we use a stochastic approach to wind power modeling. For this year’s report, we have also updated our assessment of the levelized costs and the development of the Nordic capture rates.
- Base scenario, describing our view of development of the Nordic power markets.
- Two fundamental sensitivity scenarios, the high and the low scenarios to describe a possible variability of the power prices.
- Updated assessment of the renewable capacity under the Swedish electricity certificate system.
- Significant growth of the Finnish electricity production coming from nuclear power.
- Denmark continues to build renewable wind and solar capacity, and swap from coal to bio for both central and local power plants.
- From 2030 onwards, decommissioning of the rest of the existing nuclear capacity due to reaching the end of technical lifetime.
- Consumption growth comes mainly from data centres and transport sector.
- Longer-term cannibalization of wind and solar power increases break-even level for intermittent renewable production.
Most likely development of the Nordic and Baltic power markets from our point of view.
High Sensitivity Scenario:
Higher thermal fuel and carbon prices. The High Sensitivity scenario has a higher growth in renewable capacity towards the end of the period due to improved competitiveness.
Low Sensitivity Scenario:
Lower thermal fuel and carbon prices. Lower growth of renewable capacity and close down of additional thermal capacity are expected in this scenario in comparison to other scenarios.
- Overview of recent changes and uncertainty in commodity prices and hydrology
- Estimation of renewable capacity development for each price area
- Assessment of nuclear power plant closures and additions in line with recent statements
- Estimation of the development of volatility in the Nordic markets
- Assessment of the longer-term capture rate for Nordic wind power
- Updated plans for new interconnector capacity based on the current information
- Assessment of scenarios for future electricity demand development
- Assessment of scenarios for future EUA development
- Complete modelling of the Nordic, European, Baltic and Russian power markets
- Coverage period 2018-2058
- 40 years fundamental forecast of the Nordic, Baltic and Central European power markets for each price area
- Three different scenarios for the market development analysing the impact of fuel and EUA prices, growth in demand, development of renewable and thermal production
- Report with background information, summary of assumptions and analysis of the results
- Detailed results with weekly prices for each price area, distribution of different hydrological years and scenario specific energy balances delivered electronically in Excel-sheets
- Presentation with the summary of the analysis and main conclusions
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