Power prices in Britain are set to maintain their high levels, defying a recent dip in short term forecasts.
Cornwall Insight’s latest data reveals a 12% reduction in the short term power market price forecast.
This drop is attributed to unexpectedly ample gas reserves in Europe, alleviating concerns of winter shortages.
The fourth quarter data, part of Cornwall Insight‘s 2023 GB Benchmark Power Curve, indicates a £16 per MWh decrease from the preceding quarterly forecast, extending into the 2025 and 2026 projections.
Despite this adjustment, the average costs for 2024 are still predicted to be £113 per MWh.
Europe’s reliance on international liquified natural gas, a consequence of sanctions on Russian imports, remains a pivotal factor.
In the medium term, the ongoing transition from higher-cost fossil fuel technologies to affordable renewables is contributing to a decrease in prices.
However, the surge in electricity demand and increased exports to Europe are expected to keep prices above pre-2021 levels until the end of the decade.
The report suggests a stabilisation of power prices at around £83 per MWh by 2029.
