The ZEW Energiemarktbarometer – Experts do not Expect Ease of Energy Price Situation

The vast majority of the experts interviewed in the course of the ZEW Energiemarktbarometer (Energy Market Barometer) estimate that in the long term (over the coming five years) industry customers will have to pay more for electricity and that the prices for natural gas, crude oil and coal will rise as well. In the short term (over the next six months) most of the experts expect stagnating coal and gas prices whereas the share of those who forecast stagnating electricity and oil prices and the share of experts who forecast a price increase for those two energy sources, balance out one another. This is the result of the recent ZEW Energiemarktbarometer, a survey among more than 200 energy experts conducted by the Centre for European Economic Research (ZEW) in Mannheim.

In the long term, the great majority of the interviewed experts still assume rising energy prices. About 84 per cent estimate growing electricity prices, for instance. Approximately 13 per cent expect the prices to remain on the same level and only 3 per cent estimate lower prices. Apart from the summer of 2004 (about 86 per cent), the number of experts forecasting rising electricity prices in the long term has never been higher.

According to the experts, oil and gas prices will equally continue increasing over the next years. About 84 per cent of the participants assume rising natural gas prices and 82 per cent continuously growing prices for oil. The reversal of the price trend towards unchanged prices is forecasted by a minority of only 11 per cent for the oil price and 9 per cent for the gas price. The share of experts expecting falling prices in the long term (approximately 7 per cent for gas and oil prices) is even smaller.

The assessment of the coal price trend is not as pessimistic. Although about 65 per cent of the experts still estimate increasing prices, about 30 per cent expect the prices for 2012 to be at a similar level as in 2007; 5 per cent expect them to be even lower.

Six months ago, the interviewed experts forecast that the energy price situation would significantly ease. This assessment, however, did not last for long. In the course of the current survey, just about 49 per cent of the experts estimate stagnating electricity prices (about 57 per cent in the first half of 2007). Only approximately 2 per cent expect decreasing electricity prices (in contrast to about 6 per cent in the first half of 2007).

However, 49 per cent of the participants assume increased electricity prices over the coming six months. This trend has thus been interrupted for the first time since the second half of 2004. During the six surveys conducted in the period from the second half of 2004 until the first half of 2007 the share of experts expecting a short-term rise of electricity prices shrunk.

Even the short-term development of oil and gas prices is viewed more sceptically than six months ago. A bare majority expects stagnating prices (about 47 per cent for oil and 50 per cent for gas). Approximately 45 per cent of the experts, though, estimate rising oil prices and 40 per cent increasing gas prices. Six months ago, just 25 per cent and 26 per cent of the participants, respectively, were of the same opinion. About two thirds of the experts assume constant coal prices over the next six months, about 30 per cent increasing prices and 3 per cent a decline in coal prices.

The ZEW Energiemarktbarometer (Energy Market Barometer)

The ZEW Energiemarktbarometer is a biannual survey among more than 200 experts from science and practice (energy supply companies, energy-trading companies, and energy service providers). The participants are asked to give their expectations concerning short  and long-term developments (six months and five years, respectively) in the national and international energy markets.

Contact

Dr. Ulf Moslener, E-mail: moslener@zew.de