We are pleased to present our latest strategic insight report, first presented at our virtual group meeting in June 2020. The report provides an analysis of the impacts of COVID-19 on the German power market and the energy transition, as well as an outlook on the benefits of green economic stimuli.
Key messages:
- We expect the historically low power prices to close the 29% to 50% gap to a pre-COVID trajectory after 3 – 8 years. Economic recovery leads to recuperation of demand and gas prices, climate policy exerts upwards pressure on carbon prices
- Driven by the merit-order switch, NPV of CCGTs increases by 12 to 33%. Coal on the other hand suffers, NPV drops by 55 – 186 k EUR/MW
- Profitability of merchant risk RES projects is barely affected by COVID-19 as impact averages out. Solar projects w/o FID taken could be delayed by 1 – 2 years. Impact on offshore wind IRR 0 – 0.35 pp.
- About 9% of German fiscal support focuses on green measures with positive impact on both economy and climate, however more powerful measures in power and industry exist
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