Obtain the data you need to make the most informed decisions by accessing our extensive portfolio of information, analytics, and expertise. Sign in to the product or service center of your choice.
The dynamics of Europe's energy market have shifted considerably
over the past year, despite the ongoing COVID-19 pandemic. While
European countries discuss how to change the regulation framework
to meet their 2030 climate goals, skyrocketing global gas prices
have brought the focus back to the short term and to the cost and
challenges of the energy transition. IHS Markit forecasts that in
the coming years, Europe will find itself having to manage concerns
about energy costs with the need for climate action.
In the short term, affordability is the major
concern. Contrary to the initial expectation, commodity
prices will not fall back down as quickly as they rose: during
2022, wholesale power and gas prices will remain at a premium to
historical levels. Consequently, energy costs will stay at the top
of governments' agendas in 2022. Longer term, higher energy bills
could slow the development of electrification initiatives or the
implementation of carbon taxes on fossil fuels.
Climate ambitions remain high. European
countries continue to raise their climate ambitions. Recently,
Ireland, Denmark, and Spain have upped their renewable targets. By
mandating a climate-focused government, Germany confirms its role
as a European climate leader, but its much higher ambition raises
tough questions about market design.
Tensions build between climate and
practicality. The outcome of the discussion on the EU
taxonomy proposal to include natural gas is a direct result of the
understanding that Europe will not be ready to deliver enough
low-carbon gas to meet strict environmental credentials ahead of
2030. Similarly, the energy crisis and prospects of increasing
costs for consumers are weighing over the discussions on the "Fit
for 55" package. So far, the focus on energy prices and the
magnitude of the package have eclipsed the full implications of the
package. As discussions progress and the complexity of making
changes becomes clear, the timeline of approval may slip.
A wide range of technologies are needed.
Renewables will provide the bedrock of tomorrow's power and gas
markets, but a wide range of technologies will be required, in
particular to ensure continued security of supply. In 2022,
decisions will be made to kick off investments in floating offshore
wind, hydrogen, carbon capture and storage (CCS), and nuclear.
{"items" : [
{"name":"share","enabled":true,"desc":"<strong>Share</strong>","mobdesc":"Share","options":[ {"name":"facebook","url":"https://www.facebook.com/sharer.php?u=http%3a%2f%2fihsmarkit.com%2fresearch-analysis%2feuropes-energy-market-torn-between-cost-and-climate.html","enabled":true},{"name":"twitter","url":"https://twitter.com/intent/tweet?url=http%3a%2f%2fihsmarkit.com%2fresearch-analysis%2feuropes-energy-market-torn-between-cost-and-climate.html&text=Europe%e2%80%99s+energy+market%3a+Torn+between+cost+and+climate+%7c+IHS+Markit+","enabled":true},{"name":"linkedin","url":"https://www.linkedin.com/sharing/share-offsite/?url=http%3a%2f%2fihsmarkit.com%2fresearch-analysis%2feuropes-energy-market-torn-between-cost-and-climate.html","enabled":true},{"name":"email","url":"?subject=Europe’s energy market: Torn between cost and climate | IHS Markit &body=http%3a%2f%2fihsmarkit.com%2fresearch-analysis%2feuropes-energy-market-torn-between-cost-and-climate.html","enabled":true},{"name":"whatsapp","url":"https://api.whatsapp.com/send?text=Europe%e2%80%99s+energy+market%3a+Torn+between+cost+and+climate+%7c+IHS+Markit+ http%3a%2f%2fihsmarkit.com%2fresearch-analysis%2feuropes-energy-market-torn-between-cost-and-climate.html","enabled":true}]}, {"name":"rtt","enabled":true,"mobdesc":"Top"}
]}
