Future
commodity price levels might certainly be different, on average,
in the future than they were
in the past, but we should not jump to the conclusion that the long - term boom - bust
dynamics of
commodities have vanished as a result.
Oil
commodity prices also weakened
in March, which hurt the performance of our energy holdings during the quarter, but we believe supply - and - demand
dynamics will lead to higher
commodity price trends over the long term.
In particular, depending mainly on (i) exactly how much abatement might be required over 2019 - 23, (ii) the amount and availability of combined - cycle gas - turbine (CCGT) generation capacity with the required efficiency levels, and (iii) the evolution of commodity prices between now and 2021, the carbon price required to plug the supply gap could be lower or higher than the levels we have imputed from our modelling of the supply - demand dynamics in the EU - ETS over 2019 - 23, and the fuel - switching price levels implied by current forward curve
In particular, depending mainly on (i) exactly how much abatement might be required over 2019 - 23, (ii) the amount and availability of combined - cycle gas - turbine (CCGT) generation capacity with the required efficiency levels, and (iii) the evolution of
commodity prices between now and 2021, the carbon
price required to plug the supply gap could be lower or higher than the levels we have imputed from our modelling of the supply - demand
dynamics in the EU - ETS over 2019 - 23, and the fuel - switching price levels implied by current forward curve
in the EU - ETS over 2019 - 23, and the fuel - switching
price levels implied by current forward curves.