01.02.2022

European day-ahead electricity prices in 2021

  • Day-ahead electricity prices more than tripled on average in 2021 compared with 2020
  • Daily standard deviation of day-ahead electricity prices more than doubled on average in 2021 compared with 2020
  • Country characteristics of electricity prices differ strongly depending on the structure of the energy system

On average, electricity prices in European day-ahead markets more than tripled in 2021 compared with the previous year. This sharp increase in electricity prices was evident in all 25 European countries surveyed. As in previous years, the lowest electricity prices are still found in the Scandinavian countries of Norway (NO), Sweden (SE), and Finland (FI), but here too prices rose sharply. The sharp increases in electricity prices were due to significant increases in fuel and Carbon Emissions Allowances Prices (CO2 prices), particularly in the second half of the year. The higher European gas price, which at its peak had risen tenfold compared to minimum prices in 2021, increased the marginal cost of European gas-fired power plants and consequently the price of electricity. The increase in the gas price is due to high global gas demand as a result of high industrial production, low reserve levels in European gas storage facilities, and supply shortages of Russian natural gas [1].

Figure 1: Average day-ahead electricity prices in 25 European countries (1), (2) for the years 2019 to 2021 based on data of entso-e [2]

For further analysis, Figure 2 visualizes the characteristics of electricity prices for the countries Germany (DE), France (FR), Italy (IT), Norway (NO), and Poland (PL) in 2021. The electricity prices in DE, FR, and IT show a high correlation with sharply rising prices from September 2021. Prices in NO and PL also increase from September 2021, but much less rapidly. This is due to different reasons. NO is decoupled from the continental European electricity market at many points in time due to limited transmission capacities and often has low levelized costs of electricity with very large hydro capacities. Poland’s power generation is dominated by coal. Despite high Carbon Emissions Allowances Prices (CO2 prices), the marginal cost of generating electricity from coal-fired power plants was significantly lower than that of gas-fired power plants at the end of 2021. Therefore, the electricity price in PL increased less than in DE, FR, and IT.

Figure 2: Characteristic of day-ahead electricity prices in 2021 for the countries Germany (DE), France (FR), Italy (IT), Norway (NO), and Poland (PL) based on data of entso e [2]

The Appendix shows the average electricity price and the number of negative prices per country for the years 2019 to 2021. The price volatility is crucial for the evaluation of revenue potentials. For this reason, the minimum and maximum prices, as well as the yearly and average daily standard deviation of electricity prices in each country from 2019 to 2021 are also included in the table. Price characteristics differ depending on the underlying electricity system. A high standard deviation means high price volatility and represents a potential for higher revenues for flexible assets, such as electricity storage systems.

The mean daily standard deviation per country in 2021 is also visualized in Figure 3. The daily standard deviation of the day-ahead electricity price more than doubled in European countries in 2021 compared to 2020. This has significantly increased the revenue opportunities for flexible assets in the electricity market in 2021. In a previous publication [3], we highlighted the revenue potential of bidirectionally chargeable electric vehicles as exemplary daily storage systems. Simulations with future modeled electricity prices revealed a strong correlation of the revenue potentials from the average daily standard deviation of electricity prices. Therefore, revenue potentials are expected to more than double in 2021 compared to those reported for 2019. A bidirectionally chargeable electric vehicle (100 kWh battery capacity, 11 kW charge/discharge power) could thus increase revenues from €650/year in 2019 to over €1,300/year in 2021 with combined marketing on the day-ahead and intraday markets and exemption from levies and charges on purchased energy.

Figure 3: Mean daily standard deviation of day-ahead electricity price in 25 European countries for the years 2019 to 2021 based on data of entso-e [2]

A detailed analysis of the German day-ahead and intraday electricity prices can be found here.

References:

[1] Reuters. 2021. “ Gas prices surge in Europe over tight Russian supplies“, https://www.reuters.com/markets/commodities/gas-flows-eastward-via-russian-yamal-pipeline-jump-2022-01-04/

[2] ENTSO-E Transparency Platform. 2021. “Day-ahead Prices”, https://transparency.entsoe.eu/transmission-domain/r2/dayAheadPrices/show

[3] Kern, Timo; Dossow, Patrick; von Roon, Serafin. 2020. „Integrating Bidirectionally Chargeable Electric Vehicles into the Electricity Markets“ Energies 13, no. 21: 5812, https://www.mdpi.com/1996-1073/13/21/5812/htm

 

(1) Some countries consist of several separate electricity market areas. For Denmark (DK), Italy (IT), Norway (NO) and Sweden (SE) the electricity market area with the highest, annual electricity demand is analyzed.

(2) For those countries whose electricity prices were not published in euros, the currency was converted to euros using a fixed, yearly conversion rate:

Polish Zloty (PLN):
– 2019: 1.00 PLN= 0.23 Euros
– 2020 and 2021: 1.00 PLN= 0.22 Euros

Romanian Leu (Ron):
– 2019 and 2020: 1.00 RON = 0.21 Euros
– 2021: 1.00 RON = 0.20 Euros

 

Appendix:

Table 1: Statistic analysis of European day-ahead electricity markets

  year average price in €/MWh minimum price in €/MWh maximum price in €/MWh number of negative prices yearly standard deviation of prices in €/MWh average daily standard deviation of prices in €/MWh
AT 2019 40.1 -59.8 121.5 68 13.1 8.1
2020 33.1 -77.7 200 111 15.9 8.2
2021 107 -66.2 620 64 77.6 22.1
BE 2019 39.3 -500 121.5 71 18 8.7
2020 31.9 -115.3 200 136 16.5 8.8
2021 104 -70 620 159 79.5 24.4
CH 2019 40.9 -39.5 108.1 17 12.3 6.1
2020 34 -59.6 126.7 75 14.8 6.4
2021 115 -79.4 532.2 41 83.9 17.4
CZ 2019 40.2 -48.1 109.3 58 13.5 8.7
2020 33.6 -65 125.1 119 16 8.5
2021 101 -36.3 620 33 71.7 23.8
DE 2019 37.7 -90 121.5 211 15.5 9
2020 30.5 -83.9 200 298 17.5 9.4
2021 96.9 -69 620 139 73.7 24.5
DK 2019 38.5 -48.3 109.5 132 13.2 7.7
2020 25 -58.8 200 192 17.4 9.1
2021 88.1 -43.9 620 87 64.8 22.7
EE 2019 45.9 0.1 200 0 15.8 10.6
2020 33.7 -1.7 255 5 21.4 15
2021 86.7 -1.4 1000 5 68.1 28.3
ES 2019 47.7 0 74.7 0 10.9 5.2
2020 34 1 68.9 0 11.4 5.1
2021 112 0 409 0 74.7 15
FI 2019 44 0.1 200 0 15.3 9.3
2020 28 -1.7 254.4 9 21.1 12.6
2021 72.3 -1.4 1000 5 66 25.9
FR 2019 39.4 -24.9 121.5 27 14 7.9
2020 32.2 -75.8 200 102 16.1 7.7
2021 109 -66.2 620 64 84.3 21.9
GR 2019 63.8 0 145 0 11.8 7.9
2020 45.1 0 150.1 2 17 10.6
2021 117 0 542.5 5 75.8 22.5
HU 2019 50.4 0 138.8 0 18.8 12.5
2020 39 -8.1 150 4 17.6 10.1
2021 114 -35 620 8 79.9 26.3
IE 2019 50.2 -11.9 365 121 23.8 15.7
2020 37.7 -41.1 378.1 374 23 14.5
2021 118 -20.4 500 89 68.3 31.2
IT 2019 51.2 1 113.1 0 12.9 8.4
2020 37.8 0 163.1 0 14.5 7.6
2021 125 3 555 0 82.8 17.6
LT 2019 46.1 0.1 200 0 15.8 10.7
2020 34 -1.7 255 5 20.9 14.6
2021 90.5 -1.4 1000 5 70.3 28.2
LV 2019 46.3 0.1 200 0 15.8 10.7
2020 34 -1.7 255 5 20.9 14.6
2021 88.8 -1.4 1000 5 68.9 27.8
NL 2019 41.2 -9 121.5 3 11.3 7.7
2020 32.2 -79.2 200 97 15.3 9
2021 103 -66.2 620 70 74.7 24.7
NO 2019 39.3 5.9 109.5 0 8.3 2.3
2020 9.3 -1.7 99.9 5 8.3 1.1
2021 74.7 -2 600.2 5 47.8 10.5
PL 2019 52.9 1.2 112.7 0 11.3 7
2020 46.7 11.4 147.9 0 12.4 6.9
2021 87 12.2 529.2 0 47 15.7
PT 2019 47.9 0 74.7 0 10.8 5
2020 34 1 68.9 0 11.3 5
2021 112 0 409 0 74.7 14.8
RO 2019 50.2 0 157.5 0 21.2 14
2020 40.1 0 153.4 0 18 10.6
2021 111 0 542.5 0 79.5 28.9
RS 2019 50.5 0.5 153.5 0 18 11.1
2020 39 0.9 165.6 0 16.5 9
2021 114 1 539.9 0 79.3 23
SE 2019 38.4 0.1 109.5 0 10.4 4.6
2020 21.2 -1.7 254.4 9 19.3 8.9
2021 66 -2 626.1 12 59.4 22.7
SI 2019 48.7 -20.2 200 35 18.2 11.3
2020 37.5 -23.5 172.1 23 16.3 8.8
2021 115 -66.2 533.2 23 79.6 23.3
SK 2019 41.5 -25 120.1 51 14.8 9.5
2020 34 -65 125.1 115 16.4 8.8
2021 103 -36.3 620 24 73.7 24.7