Electricity prices are forecast to drop 20% between now and 2028 due to lower gas and carbon prices, according to new research.
Aurora Energy Research has cut its forecasts today, saying the main reason will be a retreat in gas prices back to levels seen before Russia's invasion of Ukraine.
It forecasts gas will cost 69.7p per therm on average until 2027, down from 81.5p today.
The new calculation is down 22% from a January prediction from Aurora as gas demand has been lower, with gas storage levels increasing across Europe.
Also today, there was a warning from Energy UK that wind and solar farms exporting power to continental Europe could face CO2 fees in future years even though they are clean fuels.
The charges could be imposed from 2026 unless the UK and European Union can agree changes around the EU's carbon border tax.
Adam Berman, deputy director of industry group Energy UK, said unless it is fixed the Carbon Border Adjustment Mechanism "disincentivises clean power in the UK at the moment in which we're trying to ramp up provision of clean power, and it's going to increase prices in northern Europe".
The CBAM will impose a CO2 emissions fee on imports to the EU of steel, cement, aluminium, fertilisers, electricity and hydrogen, unless the exporting nation has equal CO2 pricing policies.
Analysis from Aurora Energy Research reported by Reuters showed as much as 3 gigawatt hours (GWh) of renewable power generation, enough to power up to 2,000 homes a year, could be curtailed by 2030 if the fee proves a disincentive to exporters.