ACER-CEER Annual Report on the Results of Monitoring the Internal Electricity and Natural Gas Markets in 2018

In 2017, average day-ahead (DA) electricity prices increased in all bidding zones, except in the Bulgarian, Baltic and Polish markets. The highest average DA prices were observed in Greece, Italy, the Iberian Peninsula, Croatia and Great Britain. Consistent with the increase in prices, the reappearance of price spikes in 2016 (approximately 1,200 price spike occurrences) continued in 2017, with approximately 1,100 price spike occurrences. The reoccurrence of price spikes observed in the past two years constitutes a significant change when compared to the 2011–2015 period (on average, approximately 300 price spikes per year). During some of the periods of price spikes in 2017, several Member States (MSs) took unilateral decisions to limit electricity exports. These decisions, which are not allowed under current legislation1 and which are usually inefficient, emphasise the need to address adequacy issues in a robust, coordinated and cost-effective manner.

In 2017, different levels of price convergence persisted across Europe. Average absolute DA price spreads ranged from less than 0.5 euros/MWh on the borders between Estonia and Finland, Portugal and Spain, and between Latvia and Lithuania, to more than 10 euro/MWh on several borders, e.g. between the German/Austrian/ Luxembourgish bidding zone and five of its neighbouring countries, and on all British borders, (see Table i). The persistent price differentials confirm the relevance of maximising the amount of tradable cross-zonal capacity, particularly on borders with the highest price spreads.