Rising gas prices, lower renewables output driving up European power costs

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Average electricity prices increased across most major European markets during the first week of October, according to analysis from AleaSoft Energy Forecasting.

Price increases were noted in the Belgian, Dutch, French, German, Italian, Nordic, Portuguese and Spanish markets. The exception was the British market, which saw a 2% week-on-week decrease.

The weekly average was above €70 ($76.96)/MWh in all markets except the Belgian, French and Nordic markets. The Italian market continued to have the highest weekly average, at €118.17/MWh, while the Nordic market continued to have the lowest, at €39.60/MWh.

AleaSoft says last week’s price increases were driven by a jump in gas prices, which reached its highest level since December 2023, and rising electricity demand, as well as a drop in solar and wind energy production. 

Despite the increases, the majority of markets continued to record negative electricity prices. The Belgian, Dutch, French, German, Spanish and Portuguese markets all reached -€0.01/MWh on Oct. 6, with the French market also recording the same price on Sept. 30.

AleaSoft predicts electricity prices will fall in most markets during the second week of October, largely down to increased wind energy production.

During the first week of October, solar energy production decreased by 21% week on week in Germany, 18% in Italy and 15% in Portugal, but increased by 8.3% week on week and 5.6% in France and Spain.

Several markets registered records for daily solar production for a day in October. Portugal reached 15 GWh on Oct. 1, Spain generated 136 GWh on Oct. 4 and the French market recorded 98 GWh on Oct. 5.

AleaSoft forecasts solar energy production will increase in Germany during the second week of October, but fall in Italy and Spain.

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