The chief executive of Statkraft, Europe's largest renewable energy generator, has cautioned that electricity prices across the continent will remain stubbornly high for years to come, as structural supply constraints and sluggish clean-energy build-out continue to strain markets.
Speaking at an industry conference in Oslo on Wednesday, Statkraft CEO Birgitte Ringstad Vartdal said the era of cheap European power was unlikely to return soon. 'We are looking at a prolonged period of elevated prices,' she told delegates, citing persistent tightness in natural gas markets and delays in permitting and construction of new wind and solar farms. The warning comes as European benchmark power contracts remain well above pre-2021 averages.
For UK consumers, the implications are significant. Household energy bills, though down from the peaks of the 2022 crisis, are still substantially higher than historic norms. The Ofgem price cap for a typical dual-fuel household currently stands at roughly £1,750 per year, and analysts suggest it may not fall much further if wholesale power costs stay high. Businesses, particularly in energy-intensive sectors such as steel, chemicals and ceramics, face continued margin pressure.
The FTSE 100 edged lower on Wednesday, closing down 0.3% at 8,210.45, as the energy warning weighed on sentiment. Utility stocks were mixed: SSE rose 0.6% on its renewable exposure, while Drax slipped 1.1%. Oil majors BP and Shell both fell around 0.8% as crude prices dipped on demand concerns. The broader FTSE 250 lost 0.4% to 20,540.12, with industrials among the worst performers.
Industry analysts broadly agree with Statkraft's assessment. 'The structural deficit in European power generation capacity, combined with the slow pace of grid upgrades, means high prices are here for the foreseeable future,' said Dr. Helena Cross, energy market analyst at London-based consultancy Aurora Energy Research. 'The UK is particularly exposed because of its reliance on gas-fired generation and interconnectors to continental Europe.'
Statkraft itself is accelerating investment in UK offshore wind and battery storage, but Vartdal warned that regulatory hurdles and supply chain bottlenecks could delay projects. 'Policy certainty is critical,' she added. 'Without faster planning approvals and grid connections, the transition will take longer and cost more.'