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In 2021 EU’s wholesale electricity prices were at an all-time high

Wholesale electricity prices reached all-time highs in European markets during the third quarter of 2021 reports the European Commission.

In parallel, the carbon footprint of the EU power sector also rose by 1 per cent compared with the previous year and 13 per cent compared with the second quarter of 2021. Nevertheless, emissions remained 6 per cent lower than in the third quarter of 2019.

Carbon emissions are expected to rise further in 2022 “due to high commodity prices, especially gas, which has triggered a wider use of coal-fired generation […]”, reads the report.

According to the study, the average monthly prices for baseload power exceeded historical levels in Central Eastern Europe, reaching 125 euros/Megawatt hours (MWh) in September. The tendency was mainly driven by rising prices in fuels and also tighter supply-demand balance, combined with a recovery in demand.

The breakdown at the country level showed that Polish electricity demand, for instance, rose considerably during the third quarter of 2021. The gap was filled by increased coal generation and net imports. The share of coal and lignite increased to 74 per cent in the third quarter of 2021 compared to 72 per cent in 2020. However, renewables maintained their share at 16 per cent in the total energy mix.

The daily average baseload prices in the coupled markets of the Czech Republic, Slovakia, Hungary, Romania and Poland saw an increase on the back of rising commodity prices, tightening supply-demand balance, as well as ebbs and flows of wind availability. As a result, prices went up from 55 and 70 euros/MWh in April to 110 and 140 euros/MWh in September 2021.

Similar to the CEE, monthly average baseload prices have been rising in South-Eastern Europe’s Bulgaria, Croatia, Greece and Serbia too reaching 132 euros/MWh in September and exceeding previous monthly record prices from the past years.

Even though coal and lignite generation increased by 15 per cent (+17 TWh) in Q 3 2021 in Europe, the share of renewables still managed to reach 37 per cent, beating fossil fuels that went up by 35 per cent. The growth in renewables was driven by the increase of solar generation by 11 per cent (+5 TWh), 4 per cent in biomass (+1 TWh) and 2 per cent hydro (+1 TWh).

Conversely, onshore wind generation decreased by 1 per cent (-0.5 TWh) but was compensated by 8 per cent of improved offshore wind generation (+0.7 TWh). At the same time, nuclear generation rose by 20 per cent (+27 TWh), compensating for the reduced levels of gas generation in Europe.

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