The electricity market report shows how the impact of international sanctions to Russia and the fear of supply disruption have contributed for electricity prices to reach historical levels in the first quarter of 2022. The European Power Benchmark averaged 201 €/MWh in this period – 281% higher than in the first quarter of 2021. Electricity consumption decreased slightly (-1%), supported by a mild winter and the impact of high electricity prices.
The largest year-on-year electricity wholesale price increases in EU countries were registered in Spain and Portugal (+411%), Greece (343%) and France (+336%), with Italy reporting the highest quarterly average price (249 €/MWh), which was 318% higher than in the same period in 2021.
Carbon allowances registered a new peak in early February, climbing above 96 €/tCO2, fell in early March and bounced back to prices around 80-85 €/tCO2. For the first time since the rally in gas prices started, TTF prices stopped supporting the price of EU allowances.
Despite increased levels of fossil fuels generation, the share of renewable energy managed to reach 39%, outperforming fossil fuels (37%) in the first months of 2022. Compared to the first quarter of 2021, renewable generation increased its output by 1% (+1 TWh) as a result of an increase of 20% (+20 TWh) in onshore wind, 31% of solar (+8 TWh) and 8% of offshore wind (+1 TWh) on a yearly basis, despite hydro generation decreasing by 27% (-28 TWh). In the same period, a climb of 6% (+17 TWh) of fossil fuels and a drop of 9% (-16 TWh) of nuclear generation was registered.