The electricity market was quite volatile this week. Due to large differences in the production of renewable energy, electricity prices varied considerably both on an hourly and daily basis. In addition, Germany has shut down the last nuclear power plants. According to experts, this move could push up electricity prices across Europe.
Volatility is not the only characteristic of the market. After the sharp dips of two weeks ago, the electricity price found its way back up again last week. At the beginning of the week, electricity prices remained relatively low. On Tuesday, April 11, electricity was still trading for €58,72. After that, the price fluctuated approximately between €75 and €125. The level on the EPEX was highest on Friday, April 14. On that day the electricity price was €126,26.
The major differences this week were mainly caused by major differences in the production of green energy. At times there were very low negative prices and at other times the price was high. At that time, a lot of fossil fuel was needed to meet the electricity demand. For example, the price dropped to around -€50 per hour for a few hours on Thursday, but the price remained positive all day on Friday. At times, the supply from renewable sources turned out to be so small that Tennet was forced to deploy emergency power. Nevertheless, the long-term perspective on the electricity market is relatively calm. A constant gas price of just above €40 ensures a stable basis for the electricity price. The stable LNG supply in particular ensures stability on the gas market.
Closure of German nuclear power plants
In addition, Germany closed its last three nuclear power plants this week. Traditionally, Germany had seventeen nuclear power plants, but in 2002 the German government decided to phase out the energy source. Berlin decided several times to postpone the closure, but after the Fukushima disaster in 2011, the German government decided to permanently close all nuclear power stations.
Yet not all German politics was enthusiastic. The liberal FDP suggested keeping the nuclear power plants open longer in connection with the gas crisis, but the social democratic SDP and Greens seemed unwilling to negotiate on this issue. Especially for the Greens, postponing the closure turned out to be non-negotiable and that should not be surprising. The party was mainly founded as a party against nuclear energy.
According to the experts, we will also pay a higher price in the Netherlands. Until recently, about 6% of Germany's energy was generated by nuclear power plants. If shortages arise in the Netherlands, it will become more expensive for the Netherlands to import electricity from Germany.