Development of Energy and CO2-Prices 2022

Price developments on energy markets – especially electricity and gas – are currently the subject of intense political debate. The Russian invasion of Ukraine has once again raised the price level on the energy markets, which was already significantly higher than in previous years. In particular, short-term products for gas and electricity delivery in the coming month rose briefly by over hundred percent at the beginning of March. For the analysis of these price developments, a weekly updated diagram will be published on this page, which shows the development of the futures markets for electricity and gas, the CO2-prices, as well as the oil prices. The date of the Russian invasion of Ukraine is highlighted thereby.

Figure 1: Energy and CO2-Price Development [1,2,3,4]

Price Development

Electricity and gas prices are already at a sharply higher level in January compared to January of the previous year, for example, with an increase from about €50/MWh on January 04, 2021 to €250/MWh on January 04, 2022 for the following month of electricity [3]. This price level decreases slightly until a first price peak on the day of the Ukrainian invasion. This is followed by a sharp increase, especially in prices for the shorter-term following month, where prices more than double. The prices for the calendar year 2023 basically describe a similar course, but to a lesser extent. The forward market prices for the following month of electricity and gas reach their maximum on March 07. They then fall again initially in the summer months and move between April and June (i.e. for a delivery in May, June or July) roughly around the level at the start of the year, while prices for calendar year 2023 continue to rise. As a result, the electricity price for the following month is again below the price for the following year between May and June. Following the significant reductions in gas supplies from Russia in the second half of June, gas prices, and therefore electricity prices, rise again substantially and range around the price peaks seen in early March immediately after the Ukrainian invasion. The prices for the following month thereby again exceed the price for the following year 2023, despite the summer, both for gas and for electricity.

The oil price, which had already risen constantly before the invasion, also recorded a significant increase in the period between the end of February and the first week of March. Similar to the gas price for the following month, the oil price initially peaks shortly after the Ukrainian invasion on March 7. Subsequently, however, the oil price does not return to the level of the beginning of the year, but continues to move in the range of the price peak between about $100/bbl and $120/bbl.

CO2 prices show an opposite trend to electricity and gas prices. After a slight increase over January and February, they fall in the aftermath of the Ukrainian invasion and reach their minimum on March 07 with a price below €60/tCO2. The reason for the opposite fall in CO2 prices as energy prices rise is, among other things, an economic downturn anticipated by the market in the wake of the crisis, so that demand for CO2 allowances may decline. Subsequently, the price level overall moves roughly around the price at the beginning of the year.

Products displayed

The products shown in the diagram are briefly presented and described below.

Electricity and gas

The development of electricity and gas prices is shown for the products base 2023 and following month. Base 2023 refers to a continuous supply of electricity or gas over the entire period traded, in this case for the year 2023. The following month refers to the price traded on the power exchange for a continuous supply in the next month. In January, for example, the ” following month” is used to trade a continuous delivery for February. [2, 3]


Market developments in emissions trading are reflected in the EU emission allowances (EUA) for the year 2023. The price represents the price for the right to emit one ton of CO2 in the 4th trading period of the EU ETS. The 4th trading period covers the years 2021 to 2030. An emission allowance traded for the year 2023 that is not used is automatically transferred to the next due future (year 2024) after the expiry date in December 2023. [1, 6]

Oil Price

The oil price development is represented by the OPEC basket price. This is the average of the prices of a selection of OPEC oil products [4]. The prices refer to direct delivery and are stated in US dollars per barrel.

Influence of renewable energy feed-in on the electricity price 

The invasion of Ukraine has fueled the discussion about accelerating the expansion of renewable energy sources and moreover given it a new direction. The so far mainly ecological reasons for an expansion were complemented on the one hand by the political-strategic argument to avoid dependencies on often non-democratically led countries. In addition, the sharp price increases not only on the gas markets but also on the electricity markets led to a new assessment of the costs of electricity generation. Production by renewable energy sources with stable marginal costs close to zero has a decisive advantage over fossil energy sources, which are sometimes subject to strong price fluctuations that can also only be predicted to a limited extent.

This relationship between electricity prices and the feed-in of renewable energy sources is shown in Figure 2. Here, for January and February 2022, the day-ahead prices of the weekdays Monday to Friday are related to the respective feed-in of solar and wind generation (onshore and offshore). The hours from 10 am to 1 pm were mapped, which have a comparable load level. Overall, the standard deviation of the load level over all hours is 6.3 GW for a mean value of 67.4 GW.


Figure 2: Correlation day-ahead prices and feed-in of renewables for January to May 2022, working days 10 am to 1 pm

It becomes visible that with a low feed-in from renewables, considerably higher electricity prices occur than with a high RE feed-in. In these cases, renewables push power plants with high marginal costs out of the supply curve (merit order) due to their low marginal costs. This also tends to lower the price-setting bid and thus the electricity price (merit order effect).


[1] European Energy Exchange (EEX), „EU ETS Spot, Futures & Options,“ 07.04.2022. [Online]. Available: https://www.eex.com/de/maerkte/umweltprodukte/eu-ets-spot-futures-options.
[2] European Energy Exchange (EEX), „Gas: Futures market data,“ 07.04.2022. [Online]. Available: https://www.powernext.com/futures-market-data.
[3] European Energy Exchange (EEX), „Power Futures,“ 07.04.2022. [Online]. Available: https://www.eex.com/de/marktdaten/strom/futures.
[4] Organization of Petroleum Exporting Countries (OPEC), „OPEC Basket Price,“ 07.04.2022. [Online]. Available: https://www.opec.org/opec_web/en/data_graphs/40.htm.
[5] GEMB Gesellschaft für Emissionsmanagement und Beratung mbH, „Emissionshändler.com – Die Handelsperioden,“ 2022. [Online]. Available: https://www.emissionshaendler.com/de/eu-emissionswissen/eua-im-kreislauf/die-handelsperioden. [Zugriff am 07.04.2022].