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Market research & Insight

Q318 Forecast

Tim Dixon Tim Dixon Team Lead

The Market Benchmark Price, and therefore PPA values for Roc, FiT and subsidy free projects has risen since our last report. Wholesale power prices have risen significantly, with strong gains across the power curve. Seasonal contracts from winter 18 to winter 22 rose by 13.5% on average in Q318, although these have retreated into Q418. Prices were supported by strong growth in equivalent gas contracts, which have been at unseasonably high levels. Commodity markets have also supported the power curve, with oil, coal and EU ETS carbon prices hitting four, five and 10-year highs respectively in the last quarter. In our wholesale market trends section, we explore the potential long-term impacts of price cannibalisation on captured prices for wind and solar technologies. There has been a rise in forecast Roc values for CP17 (2018-19) and CP18 (2019-20) compared to our previous report; £54.96/Roc (with recycle) for CP17, with the recycle value forecast at £7.74/Roc. This is £0.35/Roc higher than in our previous Green Power Forecast. Following confirmation of the RO target, CP18 values (with recycle) are forecast at £55.00/Roc (2018-19 money), with the recycle value forecast at £7.78/Roc. On average, forecast embedded benefit values increased slightly owing to higher wholesale power prices lifting the transmission and distribution loss benefits. In our embedded benefits section, we explore recent updates to embedded benefits, including proposed BSUoS modifications, Ofgem’s Target Charging Review, the Forward Looking Charges and Network Access arrangements, and updated TNUoS forecasts. There are now more than 40 ...

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