High energy prices until 2025

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Of Thanks to Floudopoulos

The Commission makes pessimistic predictions about the time and intensity of the energy crisis in the leaked text on measures to tackle high energy prices.

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According to the Commission, citing the analysis of forward contracts concluded in the energy markets, energy prices are expected to remain high for the rest of 2022, while the same is expected to happen even more intensively by 2024 – 2025.

More specifically, gas prices are expected to remain at the level of 100 euros per megawatt hour until the end of next winter, while they are expected to escalate to 75 euros per megawatt hour by the summer of 2023 and will remain above 50 euros per megawatt hour until summer of 2025.

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Depending on the gas prices, the prices for electricity are also expected to move. In any case, the Commission states that this forecast is conditional on market uncertainty due to current geopolitical tensions and the war in Ukraine.

According to the Commission, in the short term the gradual abolition of dependence on Russian gas will lead to adjustments in supply and demand conditions as well as price volatility. Price levels will continue to be high with the need to diversify sources of supply exerting upward pressure.

At the same time, the rapid growth of renewable energy sources and significant energy saving / demand response measures, as presented in the REPowerEU project, are expected to help reduce these impacts and provide lower electricity prices in the medium term.

As for the current situation, according to a text of the Commission, electricity and gas prices reached record levels in 2021 and reached historically high levels after the invasion of Ukraine in the first weeks of March 2022.

Gas prices that historically range below 30 euros per megawatt hour were recently found at 100 euros per megawatt hour, while occasionally exceeding 200 euros per megawatt hour. As a result, electricity prices on the wholesale market have risen due to gas-fired power plants.

For example, prices in Germany, which have historically been below 75 euros per megawatt hour, are now around 235 euros per megawatt hour, while occasionally reaching 400 euros per megawatt hour.

Source: Capital

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