For more than a week, the price of electricity on the spot markets of Spain and Portugal fell so much that it fell well below the level of 10 euros/MWh. There were days when a MWh of electricity sold for €4, reaching only €2/MWh on Friday. For comparison, electricity was traded for 71 euros/MWh on the Romanian market a day ahead on Friday.

Prices in Romania are about the same as in Germany or Poland.

Prices in Spain and Portugal are affected by high renewable energy production

Spain’s electricity prices have fallen to near zero as wind and solar farms produce more electricity than ever, Bloomberg reports.

Production in the Mediterranean region will hit a record this month. Daytime solar output rose to its highest level since early October on Wednesday, and the trend is likely to continue into March.

While the sharp drop in prices is good for consumers as it will be reflected in household bills, lower long-term levels risk hurting investment in renewables as Europe fully transitions to a green economy.

It is more difficult to “normalize” prices in Romania.

The fall in the Spanish market this week was extreme, but there is a clear downward trend in electricity and gas prices in Europe since the energy crisis. This aspect can affect the profits of energy companies. Spain’s Endesa SA said on Wednesday that its profit in 2023 fell by almost a third amid a “normalization” of prices.

But energy companies are not suffering everywhere in Europe. In Romania, prices are falling more strongly, as evidenced by the fact that producers and suppliers of electricity and gas report higher profits in 2023 than in 2022, at the height of the energy crisis.

Electrica announced that its profit in 2023 increased by 11%. And Romgaz announced a profit of 2.81 billion lei, 10% more than in the previous year. In addition, Hidroelectrica recorded a historical profit that increased by 42%, from 4.4 billion lei to 6.3 billion lei.