The power sector outlook for Western Europe is opaque as Europe struggles to balance concerns about affordability, sustainability and energy security - the so-called energy trilemma . To this end, environmental policies dictate that Western European countries will attempt to reduce their reliance on coal over the next decade, but we expect the pace of the reduction in coal to be constrained by political factors and the fact that gas is not currently economical in many markets. ...The power sector outlook for Western Europe is opaque as Europe struggles to balance concerns about affordability, sustainability and energy security - the so-called energy trilemma . To this end, environmental policies dictate that Western European countries will attempt to reduce their reliance on coal over the next decade, but we expect the pace of the reduction in coal to be constrained by political factors and the fact that gas is not currently economical in many markets. We are entering a new phase of renewable energy development in Europe and the major players in the renewables sector will no longer be able to rely on a host of accessible and attractive renewables subsidies. ...The UK s decision to leave the EU has had little impact on our already-muted forecasts for the UK power sector. Our forecasts for conventional power generation were already downbeat due to a failure to mobilise investment into new capacity - with economic and political uncertainty following the Brexit vote only serving to cement this prevailing view.
...BMI View: Despite political risks to our forecasts for the US power sector, the outlook is much easier to discern than in Europe due to a glut of cheap gas and growing momentum in the renewables industry. In Europe, a host of structural issues and the bleak outlook for conventional utilities will continue to have a negative impact on our forecasts. ...These trends - primarily the favourable economics of cheap gas-fired power generation - make the direction of US energy policy much easier to decipher than in other countries included in the NAWE region. In Canada, we maintain that plans to phase out coal power plants will stimulate growth in gas-fired power generation; however, we believe that slow growth in power consumption will mean only limited amounts of new gas-fired capacity will come online over the next decade. By ----, we forecast that coal will account for -- of electricity generation in North America (down from in -- in ----), while gas will account for -- and renewables will account for -- . ...In Canada, we maintain that plans to phase out coal power plants will stimulate growth in gas-fired power generation; however, we believe that slow growth in power consumption will mean only limited amounts of new gas-fired capacity will come online over the next decade. By ----, we forecast that coal will account for -- of electricity generation in North America (down from in -- in ----), while gas will account for -- and renewables will account for -- .
...The first is there will be slower growth in renewables capacity. ...This will be in contrast to double-digit growth over the last decade and will occur despite many countries reaffirming their commitment to fighting climate change at the COP-- summit in Paris in December ----. The second is that we expect further consolidation in the European renewables space - as renewables developers combine to reduce costs, achieve improved economies of scale and expand their capital bases to gain access to cheaper financing - in order to offset the impact of the renewables slowdown. Achieving cost efficiencies will help lower the levelised cost of electricity (LCOE) as project developers adjust to cuts to government subsidy support. ...
