- Missing energy transition targets could increase power prices by 50%
- High price volatility is expected to persist long-term
- Power consumption in Europe is expected to rise by more than 50% by 2040
Missing Decarbonisation Goals Could Drive EU Power Prices Up by 50%
A recent analysis from Montel Analytics indicates that European power prices could rise by 50% if countries do not meet their decarbonisation targets. This highlights the essential role of expanding renewable energy to maintain long-term affordability and stability in the power market.
According to the latest update in Montel Analytics’ EU Energy Outlook 2060, average power prices across Europe could hit around €100/MWh by 2060 if the shift to renewables is delayed and dependence on coal and gas continues. Conversely, meeting decarbonisation targets could keep prices closer to €65/MWh, showcasing the financial advantages of a timely green transition.
Moreover, the number of hours with negative power prices is expected to decrease starting in the 2030s. However, this will be offset by a notable rise in hours with low but positive prices. This change will mainly be driven by an increase in electricity demand, which is projected to grow by over 50% due to the wider adoption of flexible consumption technologies like electrolysers, heat pumps, and electric vehicles.
By 2050, flexible consumption devices that react to price signals are anticipated to make up nearly one-third of total electricity demand. Their overall power consumption is expected to increase from nearly zero today to about 2,000 TWh per year by 2060.
Matthis Brinkhaus, Senior Analyst at Montel Analytics, remarked:
“These findings emphasize the urgent need for ambitious renewable energy expansion. Not meeting energy transition targets could lead to serious economic and environmental repercussions, significantly affecting both consumers and businesses.”
For a detailed analysis, refer to the full white paper: EU Energy Outlook 2060.
