This forecast presents a deep and comprehensive overview of the GB power market, including fully detailed descriptions of energy and climate policies, generation technologies, demand, and fuel prices. Update summaries of policy and technology developments are also provided, and explain how our assumptions evolve alongside significant shifts in the GB market environment. Overall, our GB Power Market Forecast serves as an indispensable stock-taking document, which outlines and analyses market prospects as they currently stand.
Using our in-house dynamic dispatch model AER-ES EU, we forecast electricity prices, spark spreads, dark spreads, future generation mix, and price dispersion. Key market analyses presented in addition to these projections include:
- An “Aurora Low” price scenario, based on in-house forecasts of P10 coal and gas prices, low demand, and low carbon prices
- A forecast of Capacity Market outcomes and their impact on wholesale electricity prices; our CM projections are constructed using the iterative capacity market module of our model, assuring internal consistency between the capacity and electricity markets
- A forecast of financial and operational performance of conventional generating assets as the grid evolves towards greater flexibility, with higher penetration of low-marginal-cost and intermittent capacity
- Wind and solar capture price projections and prospects for cannibalisation
- An analysis of alternate scenarios, with key implications for wholesale electricity prices, the composition of new capacity, and climate targets
All modelling assumptions result from in-depth market research drawing on the unparalleled expertise of our Directors across the energy, policy, environmental and financial sectors, and are further refined through a detailed consultation process across private and public sector players.
Our entire GB forecast report is updated on an annual basis in Q1 – comprehensive descriptions, backgrounds, and future outlooks for specific policies and technologies can be found in that quarter’s report. Quarterly updates between Q2-Q4 focus primarily on developments with material impact on our assumptions and results, incorporating the most recent policy changes in the GB market, as well as our latest in-house fuel price projections derived using Aurora’s global general equilibrium and gas market models AER-GLO and AER-GAS.