The cheapest electricity in Europe is sold on the spot markets of Spain and Portugal. For more than a month and a half, prices have fallen so much that energy is trading at extremely low prices for several days in a row, reaching an average level of just 1 euro on Wednesday. This tendency to keep prices at extreme levels is influenced by the large production of renewable energy, especially photovoltaics.

Analyzing the evolution of prices in European markets over the last month, we see that electricity in France is also starting to be sold at lower and lower levels, up to 20 euros/MWh lower than in other markets.

Lower prices in Western Europe / Romania is one of the most expensive

If in Spain and Portugal electricity was sold for 1 euro, then in other spot markets the average price was about 70 euro/MWh. Only in France and the Nordic countries were they slightly lower on Wednesday, around €50/MWh.

On the day-ahead market in Romania on Wednesday, electricity was traded for EUR 69/MWh.

This has been the trend for several days now, with extremely low prices in Spain and Portugal. For example, over the weekend a MWh was sold for an average of €2 in Spain, €10 in France, €38 in Germany and €46 in Romania. The most expensive is the Italian market, where 1 MWh is sold 20 euros/MWh more expensive than the average in other countries.

Electricity in Spain and Portugal was also sold at extremely low prices in late February and early March for almost two weeks. Otherwise, operations on the Spanish market are carried out at an average level of 40 euros / MWh.

The more green energy grows, the lower the prices

Electricity prices in Spain have fallen to near zero as wind and solar farms produce more power than ever in the Mediterranean region, Bloomberg reported nearly a month ago.

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.

At the height of the energy crisis on the spot markets, MWh of electricity reached a record level of more than 550-600 EUR/MWh.

​The energy crisis, caused by Russia’s manipulation of gas supplies and invasion of Ukraine, in a short time led to serious changes in the energy markets of Europe. Above all, the desire to get rid of Russian dependence as quickly as possible has led to a record growth of renewable sources, which aims to replace gas and coal, as well as a significant reduction in consumption, according to the Agency’s latest reports. for cooperation of energy regulatory authorities (ACER).

But while renewable energy production has increased, demand for electricity has fallen, causing prices to plummet.

Thus, as demand decreases and sources diversify, prices also decrease. And even bigger discounts are expected in the near future.