The Crisis in Electricity Prices in Europe: Context and Key Insights

The cost of electric power in Europe is soaring. After a steady rise in 2021, prices spiked in the first half of 2022 following the post-COVID-19 economic recovery. Day-ahead wholesale electricity prices increased more than threefold on average in 2021 compared to 2020, reaching an average of €194 per megawatthour (MWh) in the fourth quarter (Q4) of 2021. The daily standard deviation of day-ahead electricity prices more than doubled on average in 2021 compared to 2020. At the start of July 2022, electricity prices were heading toward their 2021 peak. They are expected to reach new highs based on current market dynamics. Here, we discuss the drivers and implications of current European electricity prices.

Ahmed Al-Balawi

Fellow- Utilities & Renewables Ahmed is a fellow in the Utilities and Renewables program at KAPSARC. He is an electrical engineer and holds an…

Ahmed is a fellow in the Utilities and Renewables program at KAPSARC. He is an electrical engineer and holds an M.Sc. degree in renewable energy systems from Loughborough University. Prior to joining KAPSARC he worked as an R&D engineer at the Saudi Electricity Company for over five years, heading the company’s research on renewables and energy storage, and working on a wide range of projects including solar power, EV charging, sorption cooling, and energy storage solutions.

Ahmed’s current research focuses on power system modeling to help shape the future of the energy mix and the technologies that can contribute to achieving Saudi Arabia’s green targets.

Expertise

Renewable Energy
Power System Modeling
Energy Storage and Emerging Technologies

Publications See all Ahmed Al-Balawi’s publications

Assessment of the Potential of Floating Offshore Wind Turbines in the Red Sea

The cost of electric power in Europe is soaring. After a steady rise in 2021,…

5th May 2024

Modeling Green Hydrogen Production Using power-to-x: Saudi and German Contexts

The cost of electric power in Europe is soaring. After a steady rise in 2021,…

25th April 2024

Fateh Belaïd

Principal Fellow- Climate and Sustainability Fateh was a full professor of economics at Lille Catholic University and director of the Smart & Sustainable Cities research…

Fateh was a full professor of economics at Lille Catholic University and director of the Smart & Sustainable Cities research unit. Fateh has also held various positions at the French Scientific and Technical Center for Building and led multiple collaborative projects for the French Ministry of Ecological Transition and the European Commission. He is an energy and environmental economist drawing from the fields of applied microeconomics, energy modeling, and econometrics.

He has published widely on household energy consumption, energy-saving behaviors, individual preference and investment in energy efficiency, energy poverty, renewables, and energy policy. He received a habilitation for supervising doctoral research from Orléans University, a Ph.D. in Economics, an M.S. in Applied Economics & Decision Theory from Littoral University, and an engineering degree in statistics.

His work has been published in journals including Ecological Economics, The Energy Journal, Energy Economics, Economic Surveys, Energy Policy, and Environmental Management

Expertise

Energy and Environmental Economics; Energy Efficiency; Energy Demand; Fuel Poverty; Energy Policy; Energy Saving Behaviors; Applied Econometrics; Smart and Sustainable Cities.

Publications See all Fateh Belaïd’s publications