Rising gas costs push European electricity prices higher

Weekly average electricity prices were above €120 ($125.54)/MWh in most major European electricity markets during the first week of February, according to analysis from AleaSoft Energy Forecasting, as gas futures prices reached their highest settlement in two years.

Average prices across the main European electricity markets increased during the first week of February, according to analysis by AleaSoft Energy Forecasting.

When compared to the week prior, the consultancy found average price increases in the Belgian, British, Dutch, French, German, Italian, Nordic, Portuguese and Spanish markets.

All markets, bar the Nordic market, had an average in excess of €120 ($125.54)/MWh, with the Italian market reaching the highest figure, at €153.81/MWh.

AleaSoft attributed the price hike to an increase in TTF gas futures, which on February 7 reached a weekly maximum settlement price of €55.72/MWh, representing the highest price recorded by the consultancy since Feb. 7, 2023.

A decline in wind energy production and low temperatures led to an increase in gas demand during the first week of February, AleaSoft added, while an increase in electricity demand across most markets also had an influence on the higher electricity prices.

During the second week of February, AleaSoft is expecting prices to fall across most major markets, driven by an increase in solar and wind energy production.

Solar energy production increased across Germany, Italy, Portugal and Spain last week but fell in Italy.

The French, Portuguese and Spanish markets all broke their record for photovoltaic production during a day in February. France reached 68 GWh on the third day of the month, Portugal hit 17 GWh on the fifth day of the month and Spain recorded 129 GWh the day after.

For the week commencing February 10, AleaSoft is predicting further increases in solar energy production in the German market, but decreases in the Italian and Spanish markets.