The outbreak of the COVID-19 virus has sent shockwaves across the globe. The European energy industry is no exception, having been significantly impacted by social distancing and home-working measures, leading to depressed demand and prices for gas, carbon and power.
In this week’s report we cover:
- Crude oil futures increased due to production cuts and the anticipated recovery in consumption
- NBP Gas futures decreased further across the curve over the past week. NW European gas consumption in April 2020 was 17% down year-on-year, whilst storage inventories remain high
- EUA Carbon prices declined by around 10% over the past fortnight, to just below 20€/tonne
- Power demand remains weak relative to the same period last year, with a bigger decline in Germany and power prices rebounded in UK, Germany and Ireland, but fell further in Poland, Italy and Spain, while Dutch power prices went negative for 13 hours on Easter Sunday – the longest such period in history
- Dutch power sector carbon emissions are forecast to be 25% lower in 2020 as a result of COVID, bringing the Netherlands closer to the Urgenda target (25% reduction vs 1990 levels)
How will COVID-19 impact economies, financial markets and energy markets over the short-term? What are the long-term implications for power markets across Europe in different scenarios? What will this mean for power prices, generation, investment decisions and returns for different assets?
This report offers an in-depth look at the impact of COVID-19 on European power markets, covering France, GB, Germany, Ireland, Netherlands, Poland and Spain. Choose from either one country, or all.
Some of the key questions the report seeks to address include:
- What impact will the length and severity of economic disruption have on power prices?
- How will this affect returns and valuations for renewables, thermals and storage assets? Who wins and who loses?
- What is the interplay between global economic activity and European power market outcomes?
- What are the risks facing stranded assets?
- How do different European countries compare?
In addition to a comprehensive report exploring the impact of COVID-19 on power prices and asset economics under different economic scenarios, you will also receive a full dataset in Excel.
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In our 1-1 interviews, we hear different senior perspectives on the impact of COVID-19 on power markets. This week, Aurora’s CEO John Feddersen investigates the situation from the utility perspective in an interview with Tom Glover, CFO of RWE Renewables GmbH, and RWE UK Country Chair. Some of the key topics discussed in this session include:
- COVID-19 impact on business, in terms of operations, market, constructions and development
- Impact on the decarbonisation imperative and role of Government in the power sector
- The requirement for CfDs for large deployment of renewables and CfD auctions