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23 March 2020 6 min read

Covid-19: Update on Baringa’s wholesale energy market modelling and projections

Phil Grant

Phil Grant
Partner | Energy, utilities and resources | London

It has never been a more challenging time for market analysts in appraising the future market outlook, and the series of announcements last week showed us that all previously held assumptions must now be challenged. Consequently, there is now a lot of uncertainty over the next few years of the impact of the Covid-19 crisis on the energy sector – wholesale pricing, asset values and indeed policy implementation. 

We had been due to release the next editions of our European power market reports by the end of March, but have heard from many of our clients that gaining a better understanding of the impact of Covid-19 on the near term energy markets is a pressing need, and hence we are responding by re-structuring our work to prioritise early insight.  

This week (23rd March) we will be exploring two different evolutions of the market over the next five to eight years. Initially we will focus on commodity price movements and alternative cases of the depth and duration of economic contraction. In subsequent weeks we will analyse the potential impact of policy change in the energy sector, in particular examining whether strict adherence to our environmental objectives in the near term is now too costly for society, or whether this can become key in rebuilding the economy.  

In all these cases we will examine wholesale pricing, generation levels and the indicative gross margins for generation assets.  

Alongside these near-term sensitivities we will be continuing to finalise the standard Reference scenario through to 2050, which I know is critical for many of you. This will be completed w/c 30th March and will reflect some of the near-term sensitivity analysis. 

We appreciate that many of your stakeholders will be pressing for insight and analysis.  Contact us if you are not already a subscriber to Baringa’s Energy Market Reports and let us know if you require any bespoke analysis or power market modelling.  

About Baringa’s Energy Market Reports: quarterly updates give a perspective on global power markets, with projections of wholesale pricing, flexibility markets, capacity markets and the resulting gross margins for thermal and renewable generation assets. Read more about our power market projections and reports here

Contact Phil Grant for any questions about Baringa's Energy Market Reports and to commission bespoke anaysis.