European Electricity Markets Plagued by Negative Prices

Analysis by AleaSoft Energy Forecasting reveals that during the fourth week of March, most major European electricity markets witnessed negative electricity prices.

On March 30, the Belgian, British, and French markets reported negative electricity prices. The Dutch and German markets recorded negative prices on March 28. The Portuguese market had negative prices on three different days last week. Meanwhile, the Spanish market experienced negative prices for five consecutive days.

According to AleaSoft, both the Portuguese and Spanish markets hit their lowest hourly prices on record on March 30. Between 14:00 and 15:00, Spain registered -€5.21 (-$5.74)/MWh, and Portugal reached -€4.00/MWh between 11:00 and 12:00.

The prevalence of negative prices pushed weekly average electricity prices below €95/MWh in most major European markets last week. The Italian market was an outlier, with a weekly average of €119.27/MWh. The Nordic market continued to have the lowest weekly average, at €24.96/MWh.

AleaSoft observed that compared to the previous week, the weekly average electricity prices rose in the Belgian, Dutch, French, and German markets. Conversely, they declined in the British, Italian, Nordic, Portuguese, and Spanish markets.

AleaSoft attributes the price drops in some markets to a fall in weekly gas and CO₂ emission allowance prices, as well as a decline in electricity demand. In other markets, a decrease in wind energy production led to price hikes.

The consultancy forecasts a mixed scenario for the first week of April. Prices are expected to decline in France and Germany but increase in Portugal and Spain.

During the fourth week of March, solar energy production surged in Portugal and Spain, contributing to the decline in electricity prices in these markets. Conversely, solar energy production dropped in France, Germany, and Italy last week.

AleaSoft predicts that solar energy production in Germany will increase during the first week of April. However, it will decrease in Italy and Spain.