Europe could see a 58% increase in power demand by 2050, according to the latest findings in Energy Brainpool’s Power Price Scenarios “Brainreport”, part of the Montel Group.
This projected increase is attributed to several factors: the growing use of hydrogen in transportation, steel production and the chemical industry; increased electrification of household energy services through heat pumps and other electric heating applications; and the continued electrification of transport across Europe.
The report presents an analysis of Europe’s future energy landscape, highlighting significant trends in power demand, the transition to renewable energy and the potential of hydrogen energy.
Four possible scenarios are outlined: Tensions, Central, Central-EEG delayed and GoHydrogen.
In the Central scenario, power prices are predicted to remain close to current levels, with average European baseload prices exceeding €70 (£59.6)/MWh.
This scenario assumes that Russian gas flows to Europe will cease by 2027 due to geopolitical issues.
The Tensions scenario foresees an earlier halt to gas flows, leading to average European baseload power prices exceeding €100 (£85.2)/MWh.
This would result in LNG becoming a key factor in setting natural gas prices, with competition between Europe and Asia for LNG cargoes ensuring high gas prices in the medium term, impacting energy-intensive industries significantly.
Huangluolun Zhou, Senior analyst at Energy Brainpool said: “Whether the driving forces are geopolitical, technological or driven by decarbonisation, we can ultimately expect more volatile power prices as we move towards a more electrified future.
“The question people are asking now, is just at which level we can expect average prices in the future, how can those costs be mitigated, and indeed, how expensive is too expensive when it comes to the green transition?”
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