Market fundamentals and their likely impact on price dynamics are continuously assessed by PIRA using advanced statistical models. 

In particular, the following aspects of the market are covered in the short to medium term: 

• Electricity demand across Europe, based on the assessment of future levels of economic activity, the impact of seasonal factors, and the effects of current trends in the market;
• Hydro generation output, calculated considering rainfall volumes, reservoirs levels and main rivers flows;
• Nuclear availability, based on PIRA's gathering and analysis of maintenance schedules and historical plant availabilities;
• Interfuel substitution effects in the generation market, based primarily on the assessment of elasticity of fuel usage to prices and other market factors such as electricity demand, hydro levels, and plant availabilities;
• Margins/spreads development in the short run and likely effects on pricing policies/dynamics.

This comprehensive group of quantitative assessments will provide PIRA clients with a sharply focused picture of the direction of electricity markets across Europe.

Pan-European and Regional Focus

Given the erosion of barriers and surge of power trade among countries, a pan-European approach is adopted in analyzing the emerging trends in the electricity markets. However, transmission constraints and bottlenecks suggest that a regional focus also needs to be considered. EES analyzes four different regions in addition to the individual countries:

1. Britannia (England and Wales, Scotland, Northern Ireland, Ireland), where a fluid market operates and spot trade is robust; 
2. Continental Europe (Germany, Benelux, France, Switzerland, Austria), where growing amounts of electricity travel across borders;
3. Italy, where oil- and gas-fired generation compete head on; and
4. Iberian Peninsula (Spain and Portugal), where gas-fired generation is emerging as a force.