Cornwall Insight’s latest – GB Power Market Outlook to 2030 – has shown greater investment in renewables by nations across the continent, which has resulted in lower price projections in GB from 2024 up until 2030. This is compared with our first report, published three months ago. Renewable investment has increased largely as a response to the war in Ukraine. Despite the fall, predicted prices are still set to remain above the pre-2021 historic average.
In the first GB Power Market Outlook of 2022, power prices were predicted to stay above £100/MWh annually, however the new report shows prices dipping below the previous forecast in 2024, and going below £100/MWh from 2026 onwards, with a low of below £80/MWh in Summer 2029.
The conflict in the Ukraine has sped up renewable’s investment across Europe, with millions more allocated to the transition. The higher levels of renewables deployment coincides with interconnectors, used to export energy between countries, coming online, smoothing out the transfer of energy. The increased competition for GB renewables is forecast to decrease prices in the second half of the 2020s.
Figure 1: Power price forecasts – average price per fiscal year
Tom Edwards, Senior Modeller at Cornwall Insight said:
“With many of the headlines rightly focused on the short-term prospects for energy prices, it is often difficult to see the long-term picture. Our new data, forecasting a dip in power prices from 2024 up to 2030, shows that markets and governments are responding to the current higher prices with new investment in renewables to shore up energy supplies.
“The reduction in gas flow from Russia into Europe has led to a revaluation of energy supply and security throughout the continent. With much, of what was their main source of energy now unavailable, countries are looking to the alternatives that will help keep the lights on over the next few years, and renewables fit this bill. Our data shows the benefits to the market of a growth in renewable investment, with the increasing competition for GB renewables reducing prices and helping stabilise the energy market over the next few years.
“It is hoped the savings will be passed on to consumers, assuming Ofgem’s price cap methodology remains in place, the reduction in wholesale power prices should be reflected in the maximum tariffs’ suppliers can set.
“While this is positive news, we need to recognise that prices are forecast to remain above pre-2021 average until 2030. It is important that the UK and others maintain the course on low carbon generation, which alongside other measures to increase energy security such as additional nuclear or diverse gas imports, will be one of the key players in this journey.”
-Ends
Notes to Editors
For more information, please contact: Verity Sinclair at v.sinclair@cornwall-insight.com
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About the Cornwall Insight Group
Cornwall Insight is the pre-eminent provider of research, analysis, consulting and training to businesses and stakeholders engaged in the Australian, Great British, and Irish energy markets. To support our customers, we leverage a powerful combination of analytical capability, a detailed appreciation of regulation codes and policy frameworks, and a practical understanding of how markets function.
