Europe’s Power Demand to Surge by 58% by 2050
Europe is projected to experience a 58% increase in power demand by 2050 due to the expanded use of hydrogen and the electrification of households and transportation, according to Energy Brainpool’s latest “Brainreport” from the Montel Group.
The report attributes this surge to several key factors: the rising use of hydrogen in transportation, steel production, and the chemical industry; the electrification of household energy services through heat pumps and other electric heating solutions; and the continued electrification of transport across Europe.
The analysis outlines four potential scenarios for Europe’s future energy landscape: Tensions, Central, Central-EEG delayed, and GoHydrogen. These scenarios examine significant trends in power demand, the transition to renewable energy, and the potential of hydrogen energy.
In the Central scenario, power prices are expected to stay near current levels, with average European baseload prices exceeding €70 (£59.6)/MWh. This scenario assumes that Russian gas flows to Europe will cease by 2027 due to geopolitical issues.
The Tensions scenario anticipates an earlier halt to gas flows, resulting in average European baseload power prices exceeding €100 (£85.2)/MWh. In this scenario, LNG becomes a crucial factor in setting natural gas prices, with competition between Europe and Asia for LNG cargoes driving high gas prices in the medium term, significantly impacting energy-intensive industries.
Huangluolun Zhou, Senior Analyst at Energy Brainpool, commented: “Whether the driving forces are geopolitical, technological, or driven by decarbonisation, we can ultimately expect more volatile power prices as we move towards a more electrified future. The question people are asking now is at which level we can expect average prices in the future, how those costs can be mitigated, and indeed, how expensive is too expensive when it comes to the green transition?”
The report underscores the importance of understanding these dynamics to navigate the complexities of the green transition and manage future power costs effectively.
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