- Day-ahead electricity prices fall by an average 26%
- Hours with negative prices increase: Ireland (374h in 2020) and Germany (298h in 2020) with most frequent negative prices
- Country characteristics of electricity prices differ strongly depending on the structure of the energy system
Electricity prices in European day-ahead markets fell significantly by an average of 26% in 2020 compared with the previous year. The Covid-19 pandemic led to a reduction in demand for electricity in many countries. In combination with very low fuel prices, this led to reduced electricity prices. Figure 1 shows the average day-ahead electricity prices for 2019 and 2020 for 26 different European countries. In each of the countries studied, there was a reduction in electricity prices in 2020. Norway saw the largest decrease of 76%, while in Poland the price decreased by only 12%. In principle, different electricity price levels can also be seen in the various countries, because of the different compositions of the energy systems with regard to conventional power plants and renewable energies.
In line with the reduction in average electricity prices, there was also an accumulation of negative prices in 2020, some of which increased sharply. Negative prices mean that an electricity producer does not receive any remuneration for electricity generated, but actually has to pay for sold electricity. Renewables that receive subsidies have negative marginal costs, so they only stop generating electricity when prices are negative by the amount of their subsidy. Furthermore, inflexible conventional power plants cause negative prices, since it is more economical to continue producing instead of accepting an expensive shutdown and start-up process. Figure 2 presents the number of negative prices in 2019 and 2020 for the 26 countries studied. In 19 of the 26 countries, there was an increase in the number of hours with negative prices. Only in Slovenia (SI) were 12 fewer hours with negative prices registered. In particular, there was an increase in hours with negative electricity prices in Ireland (IE, +253h), the Netherlands (NL, +94h), Great Britain (GB, +90h) and Germany (DE, +87h).
Figure 2: Number of negative day-ahead electricity prices in 26 European countries for the years 2019 and 2020 based on data of entso‑e 
The Appendix shows the average electricity price and the number of negative prices for the years 2019 and 2020 per country. The price volatility is crucial for the evaluation of revenue potentials. For this reason, the minimum and maximum prices, as well as the yearly and average daily standard deviation of electricity prices in 2019 and 2020 per country are also included in the table. Price characteristics differ depending on the underlying electricity system. A high standard deviation means a high price volatility and represents a potential for higher revenues for flexible assets, such as electricity storage systems.
Poland (many coal-fired power plants) and Norway (a lot of hydropower), for example, each have a homogeneous energy system and therefore a low price volatility. Germany and France each have a more heterogeneous energy system with a high electricity demand, many conventional power plants (in FR mainly nuclear power) and an increasing share of renewable energies. This leads to more volatile electricity prices in these countries. Ireland, on the other hand, has a very high share of fluctuating wind power and a weaker connection to the continental European network, which causes even higher price volatility. Figure 3 visualizes the characteristics of electricity prices for the countries Norway (NO), Poland (PL), Germany (DE), France (FR) and Ireland (IE). Flexible assets participating in the day-ahead markets in Ireland consequently have higher revenue potentials than flexible assets in Norway or Poland. In a recently published paper, we highlight the revenue potential of bidirectionally chargeable electric vehicles for 28 different countries in 2019. For an exemplary vehicle (100 kWh capacity, 11 kW charging/discharging power), the revenue potentials vary from €50/a in Norway to €700/a in Ireland . The characteristics of future electricity prices are therefore quite crucial for the design of the future energy system. Prices that are more volatile provide an incentive to invest in new flexible assets.
Figure 3: Characteristic of electricity day-prices in 2020 for the countries Poland (PL), Norway (NO), Germany (DE), France (FR) and Ireland (IE) based on data of entso‑e 
- Die deutschen Strompreise an der Börse EPEX Spot in 2019 - Analyse des Preisniveaus und der Preisschwankungen (Preisspreads)
- Energiemärkte in Turbulenzen – Coronavirus (SARS-CoV-2) und Öl-Preiskampf verursachen starken Preisverfall an den Strom- und Brennstoffbörsen
- Analyse von einem Jahr Strompreiszonentrennung zwischen Deutschland und Österreich – Was ist passiert? Wer profitiert?
- Deutsche Strompreise an der Börse EPEX Spot in 2020
|||ENTSO-E Transparency Platform. 2020. “Day-ahead Prices”, https://transparency.entsoe.eu/transmission-domain/r2/dayAheadPrices/show|
|||Kern, Timo; Dossow, Patrick; von Roon, Serafin. 2020. "Integrating Bidirectionally Chargeable Electric Vehicles into the Electricity Markets" Energies 13, no. 21: 5812, https://www.mdpi.com/1996-1073/13/21/5812/htm|
 Some countries consist of several separate electricity market areas. For Denmark (DK), Great Britain (GB), Italy (IT), Norway (NO) and Sweden (SE) the electricity market area with the highest, annual electricity demand is analyzed.
 For those countries whose electricity prices were not published in euros, the currency was converted to euros using a fixed, yearly conversion rate:
Polish Zloty (PLN):
- 2019: 1.00 PLN= 0.23 Euros
- 2019: 1.00 PLN= 0.22 Euros
Great Britain Pound(GBP):
- 2020: 1.00 Great Britain Pound = 1.14 Euros
- 2020: 1.00 Great Britain Pound = 1.11 Euros
Romanian Leu (Ron):
- 2019 and 2020: 1.00 RON = 0.21 Euros
Table 1: Statistic analysis of European day-ahead electricity markets