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Energy

Market analysis

The Commission produces quarterly reports on EU gas and electricity markets.

Gas and electricity market reports

Energy prices have a significant impact on household expenditures, industrial costs and business competitiveness. In a liberalised market, monitoring market prices has become increasingly important for analysts, policy makers and businesses alike.

The EU quarterly gas and electricity market reports analyse market data in detail to examine trends and challenges. The reports explore the main factors behind price and volume variations and the interaction between market actors.

The European Union is currently facing a sharp spike in energy prices. In response, the Commission adopted a Communication on “Tackling rising energy prices: a toolbox for action and support” to enact and support appropriate measures to mitigate the impact of the current energy price rises and help Europe's people and businesses, while further strengthening resilience against future shocks. The implementation of the measures proposed in the toolbox will impact price developments in the EU.

Every 2 years, a report on energy prices and costs in Europe is published, taking stock of the recent trends for gas, electricity and oil prices, as well as other energy costs.

Gas market - recent developments

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Wholesale gas prices in Europe reached record levels in the last quarter of 2021, as spot contracts rose from 85 €/MWh to the unprecedented levels of 183 €/MWh on 21 December (subsequently exceeded in 2022), finishing the year at 60 €/MWh. Gas prices have surged at global level, triggered by an important tightness of global gas markets and growing geopolitical tensions, therefore contributing to a significant volatility of gas prices in the fourth quarter of 2021.

Imports from the EU’s main supplier extensively influenced the situation. Russian pipeline supplies fell by 24% year-on-year and covered only 37% of extra-EU net gas imports in Q4 2021, the lowest share in the last eight years. Imports via the Belarus and Ukrainian transit routes fell significantly, respectively by 56% and 36% year-on-year in Q4 2021. Additionally, Spanish pipeline imports from Algeria fell by 27% in Q4 2021 year-on-year, as the GME contracts expired at the end of October. Low gas storage levels in Q4 2021 influenced the market – with the average EU storage filling rate of 74.6% at the end of September falling to 53% by the end of the year – the lowest December level in a decade. In this context, EU imports of Liquefied Natural Gas (LNG) rose to 22bcm in the fourth quarter – up 33% on the same period in 2020 – bringing the annual total to a record 80bcm.

These market developments had a marked impact on retail prices, with retail gas prices for industrial customers up by 36% year-on-year in Q4 2021 for consumers with median annual consumption. At the same time, retail gas prices for household consumers were up by an estimated 65% in the EU capitals cities on average in February 2022.

EU quarterly gas market reports

Electricity market - recent developments

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The fourth quarter of 2021 brought electricity consumption in Europe back to pre-pandemic levels in 2019, driven by a steady economic recovery and the ease of lockdowns. This post-covid rise in demand has driven electricity prices to unprecedented highs. The European Power Benchmark averaged 194 €/MWh in Q4 2021 – 400% higher than Q4 2020 and 85% more than Q3 2021.

The rally of gas prices saw a reversal of the coal-to-gas switching trend, with coal generation making gains regardless increasing carbon prices during Q4 2021. Despite increased levels of fossil generation, the share of renewables still managed to reach 38%, outperforming fossil fuels (35%) in 2021. Compared to pre-pandemic levels (2019), renewable generation increased its output by 10% (+90 TWh) in a period which saw a drop of 6% (-58 TWh) of fossil fuel and 4% (-32 TWh) of nuclear generation. In addition, a new record of installed renewable capacity was reached in the EU in 2021, as 37 GW of solar and wind capacity were added to the system - 20% higher than 12 months earlier.

The report also shows that demand for electrically chargeable vehicles (ECVs) reached new highs in Q4 2021, such as 25% of newly registered vehicles were ECVs. The 532,000 new ECVs registered in the EU from October to December 2021 – 12% higher than the same period in 2020 – took the annual sales figure to more than 1.7 million vehicles in 2021.

EU quarterly electricity market reports

Energy data centre

Consistent and accurate data is very important for a reliable analysis that can be used as the basis to develop energy policies or investment planning.

For data and analysis, the Directorate-General for Energy relies on the Market Observatory for Energy, which maintains and operates the Energy market observation system (EMOS), a database of information collected from a wide range of private and public entities.

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