The forecasts, in a report on Wednesday, were both unchanged from last year’s estimates and compared with current prices of 39.9 euros and 45.5 euros respectively for annual wholesale contracts in both countries
FRANKFURT: Moody’s Investor Services estimated German year-ahead power prices would fall within a range of 40 to 50 euros ($46.9 to$58.7) a megawatt hour (MWh) and French power prices at 45 to 55 euros through 2023.
The forecasts, in a report on Wednesday, were both unchanged from last year’s estimates and compared with current prices of 39.9 euros and 45.5 euros respectively for annual wholesale contracts in both countries.
For Germany, Moody’s analysts said the range was underpinned by high public investment in grids, which they said would help shift the generation mix as coal and nuclear are phased out, and high retail prices.
Price increases in France on the other hand will be driven by a limit on nuclear output, given the need for higher staff protection measures in the pandemic, more imports and more switching to gas burning, they said.
Germany’s policies will give plants a more prominent role in the energy mix, while transmission system operators will spend an estimated 19 billion euros on networks in 2021-2023.
Moody’s saw benefits for German utility companies’ bottom lines from financial and legislative stimulus efforts by the Berlin government.
Across the wider European region, some proceeds from a EU’s 750 billion euros recovery fund, announced in the summer, will go towards the energy transition in the bloc, helping to lead the economy out of the COVID-19 pandemic and into a mainly decarbonised future.
Aggregate demand for electricity across Germany, France, Italy, Nordic countries, Britain, Poland and Iberia will recover to 2019 levels by 2023 after an expected year-on-year fall by 4-5 per cent in 2020, it predicted.
Renewables such as wind turbines and solar plants would cover nearly two thirds of output across the region by 2025, Moody’s added, thanks to the accelerated build-out now under waqy.