The electricity market showed a remarkably flat course last week. That takes some getting used to after a period with significant price movements and even days with negative hourly prices. The supply of sustainable electricity carries more weight in determining the price on the electricity market.
The electricity quote on the EPEX Spot recorded the highest price in the past seven days last Thursday (April 28) at €230,12 per MWh. As is often the case, the price hit its lowest point of the week on Sunday. On Sunday May 1, the price dropped to €194,74 per MWh. These are relatively high prices, but with a small difference between the highest and lowest prices in a week.
One of the reasons cited for the high price level is the relatively small share of green electricity in the electricity mix. Gray electricity is relatively expensive due to the high coal and gas prices, while sustainable energy is a lot cheaper at the current gray electricity prices. The problem with green electricity is that production is difficult to control. In a period with a lot of solar and wind energy and lower demand, the price drops. When there is a lot of demand and less supply of green electricity, we have to rely on expensive energy from conventional power stations.
No need to review the electricity market
The European Agency for the Cooperation of Energy Regulators (ACER) sees no reason to intervene in the current wholesale electricity market. This is what the agency writes in the report presented on Friday 29 April on the functioning of the European electricity market. ACER finds that the current wholesale electricity market design provides an efficient and secure electricity supply under relatively 'normal' market conditions. As such, ACER's assessment is that it is worth maintaining the current market design. . According to ACER, the current market is not normal, but the current crisis has been caused by the problems with the supply of natural gas. The consequences of this permeate the electricity market and are certainly not caused by fundamental problems in the electricity supply. In fact, according to ACER, the current framework of rules helps to properly regulate the import and export of electricity between countries. The import of electricity through Belgium and France is cited as an example because of maintenance work on nuclear power plants.
That doesn't mean there aren't areas for improvement. The EU faces a huge challenge to achieve net zero emissions by 2050. Therefore, more trade in electricity between Member States should be facilitated, more subsidies for the purchase of sustainably generated energy, better cooperation between Member States on investments in renewable energy and better coordination to support investments in new electricity infrastructure.