European wholesale prices are “too low” at the moment to attract new investments in power generation without subsidies, warns a review of the sector by Finnish energy firm Fortum out today.

The report suggests the “adequacy” of generation capacity is a “concern”.

This is set against a backdrop of electricity use continuing to rise over the next 35 years, finds the Fortum Energy Review.

It suggests Europe’s total energy demand is likely to stay “fairly unchanged” or even decrease slightly over the next 35 years.

However the share of electricity is expected to increase from just over one fifth of the final energy demand in 2014 to almost a third in 2050, finds the report.

That will be down to electricity replacing the use of oil and gas for transportation, heating and in household uses.

The report concludes the EU’s competitiveness requires “cost efficient” climate and energy policies.

Tapio Kuula, Fortum’s President and CEO said the rapid rise of renewable power generation is a “welcome trend” but that it is “changing the power market in ways we were not able to imagine a few years ago.”