POWER
European gas output for power generation is expected to rise to 588TWh by 2027, compared with 530TWh expected for 2024, due to the ongoing coal and lignite phase out, higher demand and better gas margins from 2026, shrugging off downside from renewable growth according to ICIS.
- The share of gas in the European power mix is forecast to remain stable at 17-18% through 2027.
- Gas-fired generation between 2024-2027 is expected to increasingly be pushed out of the generation mix during spring and summer amid higher solar PV output.
- EU power demand is forecast to rise by 7.1% between 2024 and 2027 due to an anticipated demand recovery and electrification.
- Clean spark spreads are expected to be ahead in the merit order over clean dark spreads from 2026 onwards. This is due to expectations of lower gas prices and higher carbon prices.
- For 2025, coal margins are currently ahead of gas margins due to the risk premium in EU gas prices.
- The share of coal and lignite-fired generation in the EU’s power mix is forecast to fall to 5% by 2027, compared with 9% in 2024.
- The share of renewable energy in the region’s power mix is forecast to rise to 43% by 2027, compared with 34% in 2024.
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