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What are the impacts of COVID-19 on the German power market and what is the way forward?

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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