Prices in the main European electricity markets are collapsing, even going negative in some countries. The downward trend of recent weeks is confirmed, also due to lower consumption with the arrival of spring. The fundamental role of renewables.
Numbers that have not been seen for years, in some cases never recorded before. Europe has been going through a real crisis in recent weeks wave of negative electricity priceswith the main energy markets recording significant declines, close to zero.
According to some data collected by AleaSoftIn fact, in the first days of April there were significant drops, especially in Germany, France, Holland and the Scandinavian countries; even in Spain and Portugalthey registered daily negative prices for the first time in their history.
In Italy Energy market prices have never fallen below zero, but on April 7th the threshold of 10 cents per megawatt hour was still reached in some hours of the day, the lowest in the last four years.
Determining this fall in prices on the European electricity markets – with weekly averages even lower than 50 €/MWh in most of the markets analyzed – various factors intervened, from decline in the average price of natural gas and CO emission rights2 , to that of the consumptiondue to one reduction of energy needs with the arrival of the first spring temperatures.
Less demand, more renewables
A central role for this downward trend in costs is also played by the renewable energies: the contribution of solar photovoltaic, wind and thermoelectric power, in fact, has increased in many European countries in recent weeks, with new numbers that are not negligible.
To clarify, again according to some analyses, in Italy the production of solar power recorded during the first week of April a 76% increase compared to the previous week. Even last April 6th the production goal of was reached 119 GWhsecond highest value in history.
The role of solar energy has also brought benefits in Spain (+60%), Portugal (+35%) and France (+25%), while as regards wind productionthe bull markets are mainly found in France and Germany.
This recent wave in Europe of wholesale electricity at negative prices is not a real bolt from the blue because – data in hand – the downward trend began already last year, when there were negative prices more than 12 times greater compared to 2022. The acceleration in penetration of renewables – which has small variable costs – and greater integration of the various national markets have so far made it possible to maintain this trend, constant but obviously not without periodic fluctuations.
Electricity bills: Arera estimates a drop of 19.8% in the second quarter
Which benefits will bring this wave of downward prices marked on the energy exchanges into the pockets of Italians remains to be seen. Even in light of the fact that some governments will use this opportunity to eliminate the subsidies introduced in the last two years in response to the energy crisis following the Russian invasion of Ukraine. It is not certain, therefore, that there will be any repercussions.
According to forecasts, i benefits on your bill for families they will therefore be modest and will mainly concern the electricity sector. Arera has in fact estimated a 19.8% drop in the bill electricity in the second quarter of 2024 for families in the greater protection regime. The change is substantially linked to the overall decrease in spending on energy, however counterbalanced by increase in general system costs.
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