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(Montel) German net electricity imports are set to rise more than threefold in 2024 as the nation continues its coal exit on the heels of a nuclear phase-out, consultancy Icis said on Monday.
German net electricity imports were likely to reach 38 TWh, compared to just short of 12 TWh in 2023, Icis said in a 2024 outlook for Europe’s power, gas and carbon markets.
Europe’s biggest electricity consumer would transform from “the second largest net exporter of power in Europe to the second largest net importer within the space of just two years,” the report said.
Icis attributed this to the completion of the country’s nuclear phaseout last year together with its ongoing coal exit. Icis expected another 10 GW of German hard coal and lignite plants to exit the market in 2024.
On balance, additional solar and wind capacity across Europe this year would add roughly 106 TWh to power supply compared to a 75 TWh increase in demand, Icis said.
Together with a net 10 TWh increase in nuclear power – thanks mainly to an ongoing recovery in French availability – this would further pressure thermal generation.
Persistently negative spreads
Icis expected European coal and lignite generation to fall by a combined 34 TWh this year, though it saw only limited potential for its further substitution with gas-fired generation.
At present, “the lion’s share” of German coal and gas-fired capacity was eyeing negative margins for baseload generation over the bulk of 2024.
“This means that it’s currently unprofitable for utilities to hedge baseload power and thus thermal generation is set to be pushed into peak hours in 2024,” the report said.
Germany’s benchmark front-year contract for electricity was last trading just above EUR 80/MWh. It has fallen by more than half in the past year.
“The power price would need to increase significantly relative to gas and coal prices in order to bring one of the two technologies back into the money for baseload production,” Icis said.
This was additionally likely to keep utilities in Germany from locking in forward purchases of carbon allowances, Icis added.
The consultancy expected carbon prices to finish the year around EUR 60-65/t. The main carbon contract was last trading around EUR 63/t. It has tumbled more than 20% since the start of the year.
Icis forecast European gas demand to recover 8% this year to reach 3,746 TWh. This remained around 12% below its 2017-2021 average.
Icis also forecast European power demand to recover 3% to 3,126 TWh. Unlike gas, Icis expected power demand to keep increasing 2.5-3% per annum through to 2028 thanks to greater electrification.
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The post German net power imports to triple this year – Icis appeared first on Energy News Beat.
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