The EC launched its latest report on gas and electricity markets, which covers the first quarter of 2018. The report comprises a wide range of data about supply and usage of electricity and gas in the EU during the mentioned period.
The electricity market report confirmed that electricity prices in most of the European countries were relatively low at the beginning of the first quarter of 2018 with wholesale prices being about 10% lower than in Q1 2017. Concretely, the European Power Benchmark index was 45 €/MWh on average. This is mainly attributed to mild weather conditions and abundant wind power generation. In addition, the nuclear capacities that were taken off the grid in France in the previous two quarters of 2017 were back, ensuring a well-supplied wholesale electricity market in Central and Western Europe.
However, in late February and early March, a short-lived cold spell significantly affected many of the wholesale electricity markets. The cold weather resulted in a surge in heating-related electricity needs and a sudden spike on major European natural gas hubs, which contributed to increased electricity generation costs and market prices. In addition, hydro reserve levels in the Nordic markets were lower than usual, consequently, wholesale electricity prices went up in this region. In contrast, after a long dry period in Spain, hydro generation picked up again, contributing to a decrease in electricity prices in March 2018.