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Electricity price
forecast 2023

Client

Bavarian Industry Association (vbw—Vereinigung der Bayerischen Wirtschaft e. V.)

Year

2023


We expect average wholesale electricity prices to remain significantly higher in the coming years than in 2019/2020, due to higher gas prices and rising prices for emissions trading certificates. On behalf of the vbw - Association of Bavarian Business, we have updated our electricity price forecast from last year and extended the forecast horizon to 2050. For the new electricity price forecast, the Prognos electricity team calculated three scenarios. 

Volatility on the electricity markets is growing

  • The electricity price is heavily dependent on the development of gas prices.
  • Renewables represent the dominant generation technology and already account for around 83 percent of net electricity generation in 2030.
  • The fluctuation of monthly electricity prices will increase in the coming years. This is due to the strong expansion of photovoltaics, which increases seasonality: due to higher electricity production in summer, prices are lower in the summer months than in winter.
  • Fluctuating gas prices can add to the volatility in electricity markets.
  • Compared with the 2022 forecast, prices are significantly lower in the short term. This can be attributed in particular to the sharp drop in gas prices.
  • Up to 2030 and beyond, however, electricity prices are only slightly below last year's forecast, as the medium-term decline in gas prices was already anticipated in the last forecast.

Electricity price forecast at current level

The dynamics on the global energy markets are high. Therefore, the vbw has commissioned us to adjust our scenarios for the development of wholesale electricity prices to the framework conditions in 2023.

Our approach

The Prognos electricity market model was used to model future electricity market prices. This model represents all power plants in Europe and models the dispatch of the wholesale market on an hourly basis. Both an exchange with foreign countries and a coverage of the respective domestic load are assumed.

We have calculated an upper, a middle and a lower price path for wholesale electricity prices. These are based on the corresponding price paths for natural gas, hard coal and EU emissions trading certificates. The scenarios are based on assumptions about future electricity consumption and future installed capacity for electricity generation

With regard to other parameters such as the expansion of renewable energies and the development of electricity demand, we have oriented ourselves to the current energy and climate policy goals of the German government and the EU.

Links und downloads

To the study (vbw website)

To the 2022 forecast

Project team: Sven Kreidelmeyer und Aurel Wünsch

Last update: 19.07.2023

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Sven Kreidelmeyer

Project Manager

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