ZEW Energy Market Barometer - Major Customers Can Expect Rather Stable Energy Prices Until Mid-2012

Major customers do not have to fear an increase of energy prices until mid-2012. But, within the horizon of five years, a rise in energy prices for industrial companies, larger industrial units, municipalities, and other final customers who demand electricity, oil, natural gas, and coal on a large scale is almost certain. These are the findings of a survey by the ZEW Energy Market Barometer among 200 experts from the energy sector, who have been asked to give an assessment on the short- and medium-term trends of energy prices for major customers at the end of 2011.

Regarding coal, the assessment of the surveyed energy market experts is explicit: 63 per cent forecast that within the next six months the price for coal will remain at the same level as at the end of 2011. Nearly a third of the surveyed experts expect an increase of coal prices. Within the horizon of five years, the picture changes significantly. Only 30 per cent of the experts expect a stable price level for coal during this period, but 66 per cent forecast increasing coal prices.

Regarding the assessment of the development of electricity prices during the next half year, there is almost a stalemate. While slightly more than half of the experts expect stagnating or even declining electricity prices, 47 per cent are convinced of increasing short-term prices. With 95 per cent an overwhelming majority expects that electricity will become more expensive within the upcoming five years.

“The current price trends depend substantially on the economic development”, says Nikolas Wölfing, researcher at the ZEW research department Environmental and Resource Economics. “While the short-term outlook remains uncertain, for the following five years it can be expected that the increasing prices for energy resources of the last decade will go on.” With regard to the electricity market Wölfing says: “In Germany, the necessary investments in the transformation of the energy supply are a cost factor that, in the end, will have to be bared by the consumers. But on the long term, this could reduce the dependency on fossil energy sources.”

59 per cent of the participants in the survey are optimistic and expect stagnating or decreasing prices for oil within the following six months. 41 per cent expect rises in prices. For the next five years the forecast of the energy market experts is unmistakable: 82 per cent expect that prices for oil will rise.

Concerning natural gas, 62 per cent of the experts surveyed expect a stable or lower price until the middle of the year. However, 38 per cent expect rises in prices during that period. Within the horizon of the next five years, nearly a quarter of the surveyed energy market experts agree that the price for natural gas will increase. 27 per cent of the surveyed experts expect stable or decreasing prices.

For further information please contact

Nikolas Wölfing, Phone +49 621/1235-217, E-mail woelfing@zew.de

The ZEW Energiemarktbarometer (Energy Market Barometer)

The ZEW Energiemarktbarometer (Energy Market Barometer) is an industry-specific indicator of economic sentiment based on a semi-annual survey of the energy supply, trade, and services industries, as well as regional suppliers in Germany. It comprises the expectations of more than 200 experts concerning short and long-term developments in the national and international energy markets. The results of the current ZEW Energiemarktbarometer (survey period November 2011) will be published in the ZEWnews 01/02-20122 (German language only)