According to a report by the European Commission, wholesale electricity prices reached all-time highs in European markets during the third quarter of 2021.
In parallel, the carbon footprint of the EU electricity sector also rose by 1 % compared to the previous year and by 13 % compared to the
second quarter of 2021. Nevertheless, CO2 emissions remained 6 % lower than in the third quarter of 2019. However, emissions are expected to rise in 2022, because the high cost of natural gas will trigger wider use of coal-based electricity generation.
According to the report, the average monthly prices for baseload electricity exceeded historical levels in Central and Eastern Europe (CEE), reaching 125 euros/MWh in September. The tendency was mainly driven by rising prices in fuels and also tighter supply-demand balance, combined with a recovery in demand.
The breakdown at the country level showed that Polish electricity demand, for instance, rose considerably during the third quarter of 2021. The gap was filled by increased coal generation and net imports. The share of coal and lignite increased to 74 % in the third quarter of 2021
compared to 72 % in 2020. However, renewables maintained their share at 16 % in the total energy mix.
The daily average baseload prices in the coupled markets of the Czech Republic, Slovakia, Hungary, Romania and Poland saw an increase on the back of rising commodity prices, tightening supplydemand balance, as well as ebbs and flows of wind availability. As a result, prices went up from 55 and 70 euros/MWh in April to 110 and 140 euros/ MWh in September 2021.
Similar to the CEE, monthly average baseload prices have been rising in southeastern Europe, with Bulgaria, Croatia, Greece and Serbia reaching 132 euros/MWh in September and exceeding previous monthly record prices from the past years.
Even though coal and lignite generation increased by 15 % (+17 TWh) in the third quarter of 2021, the share of renewables still managed to reach 37 %, beating fossil fuels that went up by 35 %. The growth in renewables was driven by the increase of solar generation by 11 % (+5 TWh), 4 % in biomass (+1 TWh) and 2 % in hydro (+1 TWh).
On the other hand, onshore wind generation decreased by 1 % (-0.5 TWh), but was compensated by 8 % of improved offshore wind generation (+0.7 TWh). At the same time, nuclear generation rose by 20 % (+27 TWh), compensating for the reduced levels of gas-fired electricity generation in Europe.
