Isabelle Kocher says the price of electricity has no reason to rise. Low European electricity prices are here to stay, according to the new chief executive of Engie, the world’s largest non state-owned producer of electricity. “I do not think that this is cyclical. I think that the price of electricity has no reason to rise. It will never be like it was before,” Isabelle Kocher told the Financial Times. The bleak outlook from Ms Kocher, who was last week formally appointed at Engie’s annual general meeting, goes against predictions by some companies that a painful five-year trend of falling prices will soon reverse. Jean Bernard Levy, chief executive of French utility EDF, last week said: “We are faced with a historical, record low in wholesale electricity prices. The price of a megawatt hour in western Europe has virtually divided by two.” In Germany it has fallen from â‚¬60 per megawatt-hour in 2011 to around 25 this year. The French price has moved from around 56 per MWh to around 30. Some companies, including EDF, have predicted electricity prices in Europe will start to go up again after two or three years. Ms Kocher told the FT that while fluctuations are possible, sluggish economic growth and the energy transition in Europe and around the world, which is putting a much greater focus on subsidised renewable energy, is set to keep prices “structurally” low for the foreseeable future. The drop has had a deep effect on power providers. Paris-based Engie has written off nearly 24bn worth of assets over the past two years, as many of its gas power plants become uneconomical.
FT 16th May 2016 read more »