Power prices are anticipated to decrease only slightly in 2023.

New research by S&P Global Ratings expects energy prices to reach ‘unprecedented’ levels this year, possibly well above €200 (£167)/MWh in some major European markets.

That compares to average prices of about €120 (£100)/MWh in 2021.

The authors of the report note a structural change of Europe’s gas market will depend on the evolution of EU regulation on gas purchases from Russia.

The credit rating agency does not expect any large additional global LNG production before 2025.

It said: “Gas spot prices (TTF) in 2022 will depend largely on whether there is only a modest reduction in Russian gas flows versus last year’s level, or a more pronounced longer-term decrease, which is no longer implausible based on the EU’s recently published REPowerEU proposal.

“Gas prices will have to be sufficiently high to reduce Europe’s gas demand and to redirect LNG cargoes from Asia to Europe.

“The extent of the supply shock will influence how quickly the market can rebalance in 2023 and beyond.”