Prices on the day-ahead market declined in Europe


Prices on the day-ahead market declined across Europe in 2020. In France, the average price for the year was €32.2/MWh, down from €39.45/MWh in 2019, marking a record low since 2004.
The downtrend in European prices was attributable to a sharp drop in power demand, due to the Covid-19 pandemic, and to unseasonably warm temperatures early in the year. A steep decline in fuel prices, especially natural gas, also contributed.

 

  • France

    36,75 euros/MWh

    Allemagne

    28,98 euros/MWh

    Belgique

    36,62 euros/MWh

    Pays-Bas

    32,25 euros/MWh

    Grande-Bretagne

    49,12 euros/MWh

    Espagne

    39,67 euros/MWh

    Italie (PUN)

    42,77 euros/MWh

    Suisse

    37,88 euros/MWh

    Nord Pool (système)

    26,91 euros/MWh

  • France

    44,97 euros/MWh

    Allemagne

    34,19 euros/MWh

    Belgique

    44,58 euros/MWh

    Pays-Bas

    39,31 euros/MWh

    Grande-Bretagne

    51,73 euros/MWh

    Espagne

    52,24 euros/MWh

    Italie (PUN)

    53,96 euros/MWh

    Suisse

    46,00 euros/MWh

    Nord Pool (système)

    29,41 euros/MWh

  • France

    50,20 euros/MWh

    Allemagne

    44,47 euros/MWh

    Belgique

    55,27 euros/MWh

    Pays-Bas

    52,53 euros/MWh

    Grande-Bretagne

    64,90 euros/MWh

    Espagne

    57,29 euros/MWh

    Italie (PUN)

    61,30 euros/MWh

    Suisse

    52,21 euros/MWh

    Nord Pool (système)

    43,99 euros/MWh

  • France

    39.45 euros/MWh

    Germany

    37.67 euros/MWh

    Belgium

    39.35 euros/MWh

    Netherlands

    41.20 euros/MWh

    Great Britain

    48.98 euros/MWh

    Spain

    47.68 euros/MWh

    Italy (PUN)

    52.24 euros/MWh

    Switzerland

    40.92 euros/MWh

    North Pool (systyme)

    39.04 euros/MWh

  • France

    32,2 euros/MWh

    Germany

    30,47 euros/MWh

    Belgium

    31,88 euros/MWh

    Netherlands

    32,24 euros/MWh

    Great Britain

    39,59 euros/MWh

    Spain

    33,95 euros/MWh

    Italy (PUN)

    37,38 euros/MWh

    Switzerland

    34 euros/MWh

    Nord Pool (system)

    10,9 euros/MWh


Sources: European power exchanges (for Italy: Prezzo Unico Nazionale, or PUN)
 

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Prices on the day-ahead market

The French price shown on this page corresponds to the price on the day-ahead power market. It is only one component of the final consumer’s bill, which also includes taxes, a capacity cost, and contributions and fees paid for the use of networks.

The day-ahead market prices reflects the marginal cost of the generating units used to cover demand every hour of the year. These generating units may be in France or neighbouring countries. The marginal cost depends directly on variable costs at the units operated, particularly fuel prices for thermal power plants.

The day-ahead price in France started 2020 slightly lower than a year earlier on average but fell sharply between March and May. This is because power demand contracted during the first lockdown, so it was possible most of the time to meet demand with nuclear power plants and renewable sources, which boast low marginal costs. Thermal power plants were fired up very infrequently. There were numerous episodes of negative prices during this period (see “For a better understanding” below).

Very high day-ahead prices were seen in September then again in December. In September, these high prices reflected numerous periods of supply-demand imbalance. Maintenance work was extended on several nuclear reactors, due to the pandemic and to environmental constraints (insufficient river flow rates), reducing the availability of the fleet. In December, temperatures fell below the average for the season, driving up demand. Additionally, during both months, high-pressure systems moving through Europe considerably reduced wind power generation on some days and resulted in price spikes. Prices in France climbed above €100/MWh during 25 one-hour periods and even reached €200.04/MWh on Monday, 21 September at 7:00 pm. This was the highest level on record since November 2018, but nonetheless not as extreme as at certain times in the past, when French prices have surged above €1,000/MWh.
 

Lockdown I: from Tuesday, 17 March to Monday, 11 May 2020
Lockdown II: from Friday, 30 October to Tuesday, 15 December 2020

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Negative prices are increasingly common

Negative price periods are rare but do occur, notably when demand is low (overnight, bank holidays, weekends, etc.) and generation capacity is difficult to modulate. The fact is that it may be more expensive for a producer to stop and then restart facilities with little flexibility than to have prices be negative for a time. Most instances are when wind and solar power cover a large share of demand, which is most often seen in Germany. As reliance on renewable energies grows, negative price periods will increase.

In 2020, the decrease in power demand during the lockdown drove the number of hours with negative price in France up to 102, well above the level observed in previous years. French prices fell as low as -€75.8/MWh on Monday, 13 April, when demand was low (Easter Monday holiday) and wind and solar power output was high in Europe.
Germany also saw more hours with negative prices during the year.
 

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Market coupling guarantees optimal use of cross-border capacities

Day-ahead price coupling makes the European power system more economically efficient by allowing market actors to buy and sell electricity through exchanges on a day-ahead basis in participating countries, taking into account the physical dimensions of the networks. Trading between France and neighbouring countries thus depends directly on day-ahead prices, which are identical when interconnection capacities do not limit cross-border exchanges. The French market has gradually been coupled with most European markets starting in 2006.

Note: Germany and Luxemburg form a single bidding zone. Coupling with Poland is exclusively via Sweden (SwePol subsea cable). Great Britain’s participation in market coupling will end on 1st January 2021.

The best example of convergence in 2020 was on Wednesday, 1st January, between 6:00 am and 7:00 am, when prices were identical in two regions: €25.83/MWh across the Nordic/Baltic region and Poland, and €30.17/MWh across the rest of Continental Europe. This example of convergence was less remarkable than the one seen in 2019.

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