1. European Power Markets: Performance and Prospects
Trevor Sikorski Senior Principal, Global Power Services
7 October 2004

2. European Power Markets
Headlines 2004
Spot Power Markets Converge?
Volatility in Italy and Spain
The CO2 Penalty Hurts Great Britain
How Much are Your CO2 Credits Worth?
The CO2 Factor in the Cost of New Entry
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3. The European Power Price Service
The European Power Price Service (EPPS) brings all of this market intelligence together, providing detailed forecasts and analysis of the key factors and events shaping the industry.
Understand and predict emerging price trends
Test assumptions about the market
Plan future investments strategies
Make more informed decisions regarding long-term financing and the restructuring of power assets
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4. The Power Price Forecasting Model
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5. Prices Come Together 2004 European Spot Power Prices
Some European power markets
continue to move together,
with the exception of Italy.
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6. Some Markets Track Closely…
2004 Spot Market Correlations GB
Germany
Netherlands
Spain 1
56%
32%
70%
30%
35%
15%
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7. …While Others Remain Quite Volatile
2004 Day-ahead / Daily Volatility GB
Germany
Netherlands
Spain
Italy
15 Day
4.0%
4.3%
4.1%
14.2%
16.6%
45 Day
3.6%
4.2%
17.1%
14.4%
90 Day
6.6%
7.0%
10.5%
18.0%
17.6%
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8. The Cost of Power in Great Britain is on the Rise
June 2004 — Great Britain Forward Power Curves
Power prices are up 10 euros/MWh due to higher fuel costs and the inclusion of C02.
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9. …And is Likely to Remain High
September 2004 — Gas Spark Spread
Great Britain is the only country where prices are high enough to encourage new power plant construction.
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10. But If You Take Out the Cost of CO2
September 2004 — Green Spark Spreads
Great Britain power prices fall below the point that would encourage new entry.
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11. What About the Rest of Europe?
Great Britain is the only market that is taking into account the opportunity costs of carbon.
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12. How Much Are Your Carbon Credits Worth?
Global Insight’s CO2 Price Forecasts
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13. And How Will They Impact Prices Across Europe?
Forecast Prices Across Europe
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14. New Entry Costs Special Topic
Nuclear and wind are by far the most expensive to build
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15. CO2 Is Influencing New Build Decisions
Special Topic
CO2 Is Influencing New Build Decisions
New Entry Costs With CO2 = 8 €/MWh
Gas is still the most competitive when you consider the cost of CO2.
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16. CO2 Price Would Have to Jump Dramatically to Shift to Nuclear…
Special Topic
CO2 Price Would Have to Jump Dramatically to Shift to Nuclear…
New Build Costs With CO2 = 64 €/MWh
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17. The European Power Price Service
Tracking the Events Shaping the Industry
The influence of the EU Emissions Trading Scheme on prices and plant operations
Emerging trends in the traded markets
The evolution of spark spreads
Country analysis for United Kingdom, Spain, Netherlands, Germany, and Italy
Converging prices across power markets
Market analysis
Price movements
Volatilities
Correlations
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18. The European Power Price Service
Service Deliverables
An annual forecast report including:
A detailed review of market prices in the preceding year
Forecasts of plant mix, plant margins, and electricity prices out to 2020
Comprehensive country reports focusing on market developments
Quarterly updates including:
Revised, near-term forecasts going out three years
Insight into recent developments affecting the sector
Analysis of recent price behaviour in traded markets
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19. Global Insight Energy
Premier economic analysis and consulting organization
Most comprehensive coverage of countries, regions, and industries available from any single source
Multi-fuel, quantitative consultancy
Emphasis on European and North American energy markets
Broad range of subscription, data, and consulting capabilities
Power, Gas, Oil, Coal, and Emissions
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20. Contact Us
More information regarding Global Insight’s European Power Price Service is available at:
For additional questions regarding our European energy services, please contact:
Trevor Sikorski +44 (0)
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