S.2.2. The Internal Energy Market

D.2.2. The Internal Energy Market

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EC publishes electricity market Report for Q2 2018

Thursday, October 18, 2018

The Report concludes to a rise in average European electricity prices year-on-year due to an increase in the price of coal and natural gas, and a corresponding growth in the share of RES in the electricity mix.

The EC’s latest Report on electricity markets covers the second quarter of 2018 and shows that the share of RES in the generation mix is at an all-time-high at 38%, owing primarily to excellent hydro and wind generation in most of Europe. Average wholesale electricity prices stood at 44 €/MWh, similar to the previous quarter, but up by 18% year-on-year. Mild weather in April 2018 contributed to decreasing residential demand and low monthly wholesale electricity prices in most of Europe. Conversely, high temperatures in June 2018 increased demand for cooling in many southern and eastern European countries.

In the second quarter of 2018, growth in electricity consumption was limited to 0,3%, compared to the EU GDP year-on-year growth of 2,1%. Among factors affecting electricity generation costs, natural gas prices were up significantly in a year-on-year comparison. Coal prices also rose significantly over the quarter, owing to strong global demand for coal, especially in Asia. In June, market sentiment on trade issues between the EU and US also had a visible impact on the carbon price. Retail electricity prices for household customers increased by 4,5% year-on-year in June 2018 on average, mainly driven by energy supply and network costs.