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REF-E scenario: November 2018 update

The November update of REF-E scenarios - built around three internally consistent evolution patterns of the electricity market, characterized by different degrees of decarbonization - focuses on the impact of politically driven short-term volatility on mid-term market evolution:

  • CO2 and natural gas prices remain the main drivers of power prices:
    • the European gas market remains tight due to the combined effect of declining internal production and the increase in demand of thermal power plants. As a consequence, the price of LNG in Asia remains the main driver of the European gas market;
    • the reforms of the ETS system (and in particular the Market Stability Reserve mechanism) have been successful in creating a new competitive equilibrium in the market, which now expresses a price that will support the coal/gas switch in the medium term and the development of storage technologies in the long run.
  • The decrease in import, electrification and security needs are bringing the clean spark spread back to positive values;
  • investments in new technologies (in particular RES coupled with storage) are profitable in all scenarios, even though their revenues will depend on how market design will allow them to capture revenues from ancillary services.
In this context, we consider (always taking into consideration that random weather variables are one of the major determinants of prices) that upward movements of prices are more likely than downward movements.

The Elfo++ scenario is also accessible through the new Web App interface!


The REF-E scenarios are complete market studies, processed every four months, setting out the evolution of the Italian electricity market up to 2040. The accompanying documents put the reader in a position to investigate the methodological assumptions and knowledge of the main results presented.

In particular, the scenarios show:

  • fuel prices
  • electricity demand
  • the development of the transmission grid
  • production capacity from renewable sources
  • thermal generation
  • marketing strategy
  • the safety and effectiveness of the system

The REF-E scenarios arise from in-depth and accurate understanding of the needs of the people who work in the energy markets in terms of strategic vision. These rich, detailed and reliable information products are able to respond fully and efficiently to the needs of their users.

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