German Power Market Forecast – October 2020
We are pleased to present our latest German Power Market Forecast, October 2020. This quarterly update presents Aurora’s comprehensive view on the state of the German power market, and includes our latest outlook on prices, generation, capacity, and asset performance to 2050.
Key highlights in this quarter’s update include:
- We have extended our forecast until 2050. Baseload prices continue to increase past 2040, peaking at 67 EUR/MWh in 2042 before dropping to 62 EUR/MWh by 2050.
- In light of the government’s commitment to support green hydrogen, we have introduced hydrogen into our forecast. Hydrogen exerts strong upwards pressure on baseload prices, and provides a significant upside for renewables capture prices (in particular for solar).
- Reflecting the EEG 2021 draft adopted by the cabinet in September, we expect 10 GW more solar capacity and 2 GW higher offshore wind capacity for 2030.
Relative to our July 2020 forecast, baseload prices increase by 1.9 EUR/MWh on average between 2020 and 2025, driven by higher carbon prices and power demand. From 2026 to 2036, power prices decrease by 1.5 EUR/MWh on average, as higher renewables buildout and lower gas prices overcompensate the impacts of hydrogen. Prices barely change between 2037 and 2040.
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