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ECN publication
Future electricity prices. Wholesale market prices in and exchanges between Northwest European electricity markets
Published by: Publication date:
ECN Policy Studies 12-6-2008
ECN report number: Document type:
ECN-E--08-044 ECN publication
Number of pages: Full text:
63 Download PDF  

The electricity markets in Northwest Europe will undergo structural changes in the near future. Besides expected demand growth and increasing fuel and CO2 prices, new investments in power generation capacity (including wind energy) are foreseen as well as decommissioning of old power plants. Furthermore, new interconnectors will become available between the Netherlands and neighbouring countries and the capacity of existing interconnectors may increase or more efficiently used. These changes will have a major impact on the price differences between Northwest European wholesale electricity markets and the exchanges between these markets. To analyse these impacts ECN conducted a study with the electricity market simulation model COMPETES. The COMPETES model has been developed by ECN to simulate the competition in European electricity markets under different market structure scenarios varying from perfect competition to oligopolistic market conditions. The analyses of developments in the Northwest European markets (The Netherlands, Belgium, Germany, France and UK) show that it is very likely that electricity wholesale prices in 2020 of Dutch and neighbouring power markets will converge and the Netherlands will become in most cases a net exporting country. This result proofed to be robust under different scenarios (high and low investment levels, high and low demand growth, moderate and high fuel and CO2 prices) and also if developments in countries differ, e.g. less demand growth in the Netherlands due to energy saving policy, more restrict en-vironmental policy in the Netherlands regarding new power plants, cancellation of the nuclear phase out policy in Germany and a merger between Dutch and German power producers.

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