Wholesale electricity market: Follow the evolution of STOP prices

There are several types and places of exchange on the wholesale electricity market. Transactions on the wholesale electricity can be:

Wholesale electricity market in 2023: follow the developments

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Discover below the evolution of electricity spot prices in France in real time. The electricity spot price is today € 87 per mWh. Tomorrow, September 26, 2023, this spot price will be the MWh of electricity. The price of MWH a month earlier was 111.08 € and a year ago, it was 272.84 €. These electricity prices on the wholesale market are updated from 2 p.m. for the next day.

Evolution of the price of Spot electricity (Day-Ahead)

Spot price of tomorrow 09/26/2023	Daytime price of the day 09/25/2023	Spot price a month ago 08/25/2023	Spot price a year ago 09/25/2022
Price in €/mWh	Posted around 1:30 p.m €/mWh	87 €/mWh	98.37 €/mWh	399.15 €/mWh
Evolution in €	–	–	-11.37 €	-312.15 €
Evolution in %	–	–	-11.56%	-78.2%

Source: North Pool Group – Updated manually on 09/25/2023

Source: North Pool

• Winter 2021 : With the end of the health crisis, the winter period experiences energy tensions. Indeed, the rise in demand from countries in the northern hemisphere encounters the lack of gas in Europe. Consequently, by the rule of supply and demand, the price of gas takes great value. The price of electricity being indexed to that of gas, the latter also increases.
• February 2022 : Consequently of the invasion of Ukraine by Russia, Europe has decided to set up an embargo on Russian gas, which adds tension on the energy market.
• May 2022 : In May, the French nuclear park holds many reactors on stop, 30 of 56. Of the 30 reactors that do not work, 18 are in the context of maintenance work. The other stop reactors are for corrosion problems.
• Fall 2022 : The energy market is calm due to the sweet season which saves energy for winter. The historic supplier EDF shares the reopening calendar of power plants with a reopening of all its power plants for the winter 2022-2023.
• Spring 2023: The gas market is normal, around 25 € per mWh. The electricity market remains subject to high prices, especially due to concerns about the French nuclear park.

�� The wholesale electricity market: what is it ?

The wholesale market corresponds to the market on which electricity and natural gas are purchased and then sold before this energy is delivered to the network for end customers (individuals and professionals).

Like most of the markets, that of electricity evolves according to supply and demand (upstream and downstream).

L’offer therefore corresponds to the part upstream. That is to say, before electricity was injected into the Enedis public network (in France).

• 95% of the production approximately comes from the French nuclear park;
• The remaining 5% electricity come from European imports.

There request corresponds to the part swallow. Otherwise, when electricity leaves the Enedis public network.

• 75% of the electricity produced is intended for French consumers;
• 5% electricity comes from European imports.

Part of the electricity produced and transit is lost during transport or consumed for pumping.

Whatever the actors of the wholesale market ?

The different players in the wholesale market are:

1. Electricity producers;
2. Electricity suppliers;
3. Energy traders;
4. Erasure operators.

The former sell the electricity produced from their power plants, the latter buy it in order to resell it to their customers. The third promotes the market liquidity By buying and reselling electricity, they act as intermediaries. The latter guarantee the market stability by regulating energy consumption when there is a disparity between supply and demand.

Different electricity suppliers

Some electricity suppliers also have the status of electricity producers. We call them “integrated companies“, which means that the electricity produced and injected with the network is not the subject of negotiations on the market.

�� EPEX: Electricity Course

THE European Power Exchange (EPEX) publishes on its EPEXSPOT website.com the classes of the electricity of the day and the next day, what is called the Spot market.

The database corresponds to normal demand hours and the point during time of request peak, generally around 6 p.m.-7 p.m.

It should be noted that electricity is a product during much more volatile that most other products, for example, gold or currencies. Indeed, electricity does not store (or hardly), and its course can even become negative. Thus, if production exceeds demand, the price of electricity can collapse. Otherwise, the price can increase considerably. The price of electricity can therefore vary extremely from one day to the next, and even from one hour to another.

EPEX countries have different spot prices for a simple reason, the interconnection capacities between countries are insufficient. Saturated half of the time, they do not allow to have all the desirable electricity transit. Prices are therefore still established nationally, and electricity exchanges only take place when the difference between the spot prices in two countries is greater than a threshold of several euros.

ARENH, an alternative to markets

Regulated access to historic nuclear electricity (ARENH) is a mechanism put in place by the 2010 NOME law which allows alternative suppliers to benefit at a regulated price of nuclear electricity from EDF. In general, the electricity market is very volatile, which is why some prefer ARENH and its fixed price.

�� Renewable electricity courses

Renewable electricity is sold by its producers in two ways:

• Either to EDF as part of the EDF OA purchase obligation. Its value is then much higher than the market price (up to € 450 / MWh for solar);
• Either on the production market, with in addition to classic electricity an original guarantee, which can be sold separately and is worth around € 1 /MWh.

�� Electricity markets

In Western Europe, the organized electricity markets are gathered by lots of countries.

Epexspot: Franco-German electricity spot market

The European Energy Stock Exchange EPEX SPOT manages the Spot of electricity market for France, Germany, Switzerland and Austria, that is to say the exchanges of the day and the next day. It was created in 2008 by the merger of the Spot activities of the French Powernext and the German EXE. EPEX countries achieve more than a third of European electricity consumption.

EPEX is based in Paris, and has a subsidiary in Leipzig (Germany). In 2012, 339 TWh of electricity were exchanged on this market.

APX: Spot Benelux and UK market

In the United Kingdom and Benelux, the group APX brings together 3 electricity scholarships:

• APX Power NL For the Netherlands
• APX Power UK in Great Britain
• Belpex in Belgium

Other European electricity scholarships

• Omel : In Spain and Portugal, electricity is exchanged on Omel
• GME (Gestore Mercati Energetici): manages the Italian electricity scholarship
• Polpx manages electricity exchanges in Poland.

The electricity scholarship in each country is generally mandated by the State for a defined period (5 years in France).

�� Original guarantees, a green electricity market

There is another market concerning electricity: that of the original guarantees. These certificates, guaranteeing the production of an MWh of electricity of renewable origin, their energy and their geographic origin, are issued and transferred by Powernext.

Wholesale of electricity: Follow the evolution of prices spot

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Find the price of spot electricity of the day and that of the next day, follow its evolution in real time and compare it to that of a month ago or a year. The price of EPEX electricity (Day-Ahead) today is set at € 87 per MWh. For information, electricity prices on the wholesale market are updated at 2 p.m., for the next day.

Price of Spot electricity (Day-Ahead)

Today, The price of EPEX electricity (Day-Ahead) is € 87 per MWh. Tomorrow, it will be the MWh. A month earlier, the price was € 111.08/MWh while a year ago, its price on the wholesale market was € 272.84/MWh.

Price of Spot electricity (Day-Ahead)

TODAY’S DATE

09/25/2023

Day price

€ 87/MWh

Tomorrow prices

€/mWh

Source: North Pool Group

Evolution of the price of Spot electricity (Day-Ahead)

Variations in the price of electricity on the wholesale market can be observed over long periods, such as several years, or on short durations. For example, the table below allows compare the price of today’s spot electricity with its price yesterday, of tomorrow or a month or a year ago.

Evolution of the “Day-Ahead” Spot Price of electricity

Next day 09/26/2023	Today’s price 09/25/2023	Spot price 30 days ago 08/25/2023	SPOT Prize last year 09/25/2022
Price (€/MWh)	Posted around 1:30 p.m €/mWh	87 €/mWh	98.37 €/mWh	399.15 €/mWh
Evolution in €	ND	ND	-11.4 €	-312.2 €
Evolution in %	–	–	-11.6%	-78.2%

Source: North Pool Group – Updated on 09/25/2023

On the graph below it is possible to observe concretely The evolution of the price spot of electricity over several years. On 09/24/2023, the gas course on the wholesale market for the November 2023 period is 43.€ 85/MWh. Put in parallel with the high point of 08/28/2023 (49.028 €/MWh), this represents a decrease of 11%. Compared to the minimum reached on 06/09/2023, the price at 22/09/2023 is up +6% to 43.€ 85/MWh.

Source: North Pool

Note that it may be interesting to compare the variations in the spot price with the evolution of the price of electricity in France because they are directly linked.

Key dates of the evolution of the price of electricity on the Spot market

⬇️ Fall 2021

The price of electricity on the Spot has increased due to several factors.

• The resumption of activity following the end of the health crisis linked to COVID-19;
• Entry into the winter period;
• A high gas request from China for its economic recovery;
• The European Commission’s decision to increase the price of CO₂ emission quotas.

⬇️ December 2021

Two reactors of the Chooz power station are arrested for maintenance that could not be carried out during the health crisis. EDF subsequently announces the stop of two other reactors for corrosion problems. These will also lead to the closure of other reactors in the following months.

⬇️ February 2022

The political-economic context is strongly agitated when Russia invades Ukraine. The European Union decides to establish economic sanctions in Russia and in particular threatens the country with an oil embargo. In fact, the inauguration of the Nord Stream 2 gas pipeline is put on hold.

⬇️ summer 2022

Many events lead to a sharp increase in the price of electricity on the Spot market

• Due to technical problems, Russia announces to reduce its gas deliveries to Europe, which it interprets as political pressure to encourage it to lift its economic sanctions;
• Europe develops its gas reserves for the winter of 2022-2023, therefore increasing demand while the supply is down;
• EDF faces new corrosion problems in its nuclear power plants, encouraging it to close half of its nuclear fleet.

⬇️ Fall 2022

Sweet fall temperatures reduce perpetual energy movements of the energy market. The stability of the price for the prices of the Spot electricity is also due to the announcement of reopening of nuclear power plants by EDF, mostly scheduled for January 2023.

The prices of electricity fly away

The prices of electricity on the wholesale markets have experienced a historic record: they spent the 100 € / MWh mark in early September 2021. For comparison, according to RTE data, they were around € 47.2/MWh on January 1, 2021.

On average, the Spot prices of the five largest markets in Europe (Germany, France, Italy, United Kingdom and Spain) exceeded the previous historic record reached in December 2021 – Rystad Energy

According to Rystad Energy, an independent company of Norwegian energy research and economic watch, the month of March 2022 holds the title of The most expensive month in history to buy electricity in the short -term wholesale markets . As a reminder, the previous price record dated from December 2021.

This increase in the price of electricity is notably due to a strong Increase in gas courses. Indeed, gas ensures a large part of electricity production in Europe. This fossil energy is the source of 20 % of the European Union electricity production.

What about the impact of the energy crisis in Europe ? The energy crisis has impacted all European countries that have all seen their energy price drastically increase. It is possible to study the comparison between the price of electricity in Europe and France to find out more.

What is the situation in France ?

In France, gas is not one of the main sources of the energy mix: 67% of our electricity is of nuclear origin in 2020. However, with the COVVI-19 crisis, the availability of the French nuclear fleet has decreased. Indeed, the maintenance programs have been delayed.

In 2020, the France imported a large amount of electricity. This often comes from neighboring countries where gas is important. In 2020, it imported 717 GWh of electricity more than its export volume.

If production resumed in 2022, the park has not recovered 100% of its capacity. France continues to import electricity into wholesale markets, This is why the price of kWh increases. For more information, it is possible to consult our guide on electricity production in France

What is the wholesale electricity market ?

The wholesale electricity market is the market on which electricity is Purchased and sold Before being made available to end customers (individuals or companies) on the electricity network. This evolves according to two indicators:

1. The offer : before electricity was rejected on the network;
2. Requirement : downstream, from the moment when electricity leaves the public network.

And the retail market ? The electricity retail market, as opposed to the wholesale market, is the one accessible to end customers. Indeed, he is directly interested in individuals and companies through electricity offers.

Who are the players on the wholesale electricity market ?

The wholesale electricity market is Reserved for professionals uniquely. We find there Four types of actors ::

1. Electricity producers;
2. Traders;
3. Providers ;
4. Erasure operators.

They interact with each other as follows:

1. the producers sell the electricity they have produced thanks to their installations;
2. Traders position as intermediaries between producers and suppliers;
3. Electricity suppliers buy electricity on the wholesale market to producers or traders in order to supply their customers;
4. erasure operators
5. value the electricity that has not been purchased: consumption avoided.

What about suppliers who produce electricity ? It is not uncommon for an electricity supplier to be also a producer. These are called “integrated companies“”. The electricity they inject does not give rise to negotiations on the wholesale market.

What are the possible exchanges on the wholesale electricity market ?

There are several types and places of exchange on the wholesale electricity market. Transactions on the wholesale electricity can be:

• Physical : electricity is directly delivered to the network;
• Financial : electricity is exchanged for an amount.

These transactions can be carried out:

• On the counter market counter : the transaction does not require an intermediary and is done directly between the producer and the supplier;
• On the Intermediated over -the -counter market : the transaction is carried out through a merchant who manages negotiations;
• On the digital scholarships (EPEX Spot France for Spot and EXE Power derivatives France products for future products): electricity is exchanged on a platform where the various players negotiate the sale and purchase of electricity.

What are the two products on the wholesale electricity market ?

There are two products on the wholesale electricity market:

1. Spot products;
2. Tower products.

Spot products

Depending on the markets, spot products can be:

• For’Infra-day deadline,Either half-winner products, times or by blocks of several hours, with delivery the same day;
• For’Daily deadline, either time products with delivery the next day. These products are the Reference price in France for the electricity market.

The reference price for the electricity market in France is the price of the product Day-Ahead on the EPEX Spot Stock Exchange. They are calculated by designated and fixed operators Each day between 12:30 p.m. and 1:00 p.m. by a common auction mechanism reflecting the balance-end balance to this deadline. They are negotiated the day before for delivery scheduled for the next day.

These short -term prices are unstable on the one hand, because it is impossible to store electricity on a large scale (a strong offer at an instant T cannot be used to balance strong demand in the future) and, d “In other words, because the factors having an influence on the balance of offends are numerous and can vary strongly. This is particularly the case for climatic conditions since, for example, the cold increases demand, or the various events that occur on the electric park such as power plant failures, for example.

Tower products

Producers, traders and suppliers potentially conclude sales/purchase contracts for the future. THE price is negotiated at the time of the conclusion of the contract, But delivery can take place in the days, weeks, months, quarters or even in the years to come. This is called Contracts or term products.

The prices of long -term products are less subject to volatility than the prices of Spot products, as they are established on an average of the early prices for the referred to. The negotiated prices generally serve as the basis for electricity suppliers to define the conditions of their offers. Indeed, suppliers generally prepare the large major part of their deliveries according to their production capacity, but also by buying the necessary term products.