Electricity prices in Europe increased in December in most markets
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In the EU, average monthly wholesale day-ahead electricity prices in December 2024 were mixed.
According to Ember, they amounted to:
December trends
According to AleaSoft, in the first half of December, prices in major European markets rose due to increased demand amid low temperatures and a reduction in wind generation.
In the first week of the month, they exceeded €100/MWh, while in the second week they were over €120/MWh in most countries. Almost all European markets reached their highest daily price since at least March 2023 during this period, mainly on December 12.
In particular, in the second week of December, a drop in renewable energy production caused a huge jump in electricity prices in Germany. Wholesale prices in intraday trading on December 12 in this country reached about €1000/MWh, the highest level in the last 18 years.
Such high prices were caused by the so-called Dunkelflaute (dark depression, cloudy and windless weather) combined with high demand for electricity. The Economy Ministry reported that they peaked for only a few hours, and had little impact on households and most businesses, which typically have electricity contracts with a guaranteed long-term price.
However, the price hikes have caused problems for some electricity consumers. For example, as Handelsblatt reported, the Feralpi Stahl electric steel plant in Saxony, which buys electricity on the intraday market, was forced to temporarily stop production to avoid excessive costs. The company has already taken this step several times in 2024, which is likely to affect the fulfillment of its annual plans.
This situation has affected Norway, among other countries, which is one of the largest electricity suppliers to Germany. As a result of the rapid increase in German demand, prices in this Scandinavian country also rose sharply – to 13.16 Norwegian kroner ($1.18) per kilowatt-hour in the afternoon of December 12. This was the highest level since 2009 and almost 20 times higher than the previous week.
In the third week of December, electricity prices in Europe fell significantly, but rose again at the end of the month.
The situation in Ukraine
In Ukraine, the weighted average price for the purchase and sale of electricity on the DAM in the last month of 2024, according to Market Operator, increased by 7.1% compared to the previous month – to 5965.26 UAH/MWh (€136.4/MWh at the average monthly exchange rate of hryvnia to euro).
According to ExPro Electricity monitoring, in December, Ukraine increased electricity imports by 2.6 times compared to November – to more than 430 thousand MWh.
Overall, it increased by 5.5 times to 4.4 million MWh for the year. Hungary accounted for the largest share in the import structure (39%), followed by Slovakia (23%), Romania (18%), Poland (14%) and Moldova (5%). Last year, imports peaked in June (totaling over 850 thousand MWh) due to the favorable price situation in the electricity markets of neighboring countries.
Last year, according to Ukraine’s Trade Representative Taras Kachka, the country imported $669 million worth of electricity (+333% y/y), $950 million worth of batteries (+103% y/y), and $596 million worth of transformers (+108% y/y).
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At the end of December, the National Energy and Utilities Regulatory Commission (NEURC) approved a new electricity transmission tariff for 2025 (at UAH 686.23/MWh), which is almost 30% higher than the previous one. Industry and industry associations actively opposed any increase in the cost of the service (unification, etc.).
In particular, the Federation of Employers of Ukraine noted that such steps are dangerous for the country’s economy and will become an additional burden for Ukrainian enterprises operating in a time of war. The FEU noted that if only one tariff – for electricity transmission services – is increased, energy costs will increase by more than UAH 13 billion, which will reduce the competitiveness of products.
Fullness of gas storage facilities
According to the AGSI platform, European gas storage facilities were 71.8% full as of January 1, 2025 (compared to 86.1% as of the same date in 2024), and 68.2% full as of January 8.
According to Bloomberg, Europe is running out of gas reserves faster this winter than at any time in the last seven years due to cold weather. According to Samantha Dart, head of natural gas research at Goldman Sachs Group, the lower the level of storage remains at the end of March, the harder it will be to replenish reserves ahead of the next winter period.
The region’s gas market is turbulent as Europe relies on LNG to make up for the shortfall left by the end of Russian gas transit through Ukraine (which was halted on January 1, 2025). The European Commission has stated that the EU has prepared for this shutdown. However, unplanned disruptions in major suppliers could affect the fragile balance.
On January 1, the first trading day after the suspension of Russian gas supplies to Europe, Dutch TTF futures prices rose to €51/MWh, the highest level since October 2023, before falling back. This was also driven by low temperatures in the region and a reduction in European reserves.
Results and forecasts for 2025
According to the industry association Eurelectric, in 2024, the average wholesale price on the EU day-ahead market fell to €82/MWh, compared to €97/MWh in 2023.
According to the association, by the fourth quarter, this average was even lower (€76/MWh). However, in October-December, Europe saw an increase in electricity prices due to high winter demand, rising gas prices, a shortage of solar energy and windless periods.
At the same time, negative prices broke a new record last year – they were recorded 1480 times.
In 2024, Eurelectric noted, electricity demand in the EU grew by less than 2% year-on-year, but it remains below pre-crisis levels. This was mainly due to low industrial consumption, partly due to increased energy efficiency and energy saving.
As for 2025, ICIS (Independent Commodity Intelligence Services) expects Europe to see moderate demand growth again in this period. According to the company’s forecast, consumption will increase by 49 TWh (1.6%) compared to 2024.
According to the ICIS Power Foresight model, quoted by Luca Urbanucci, the company’s chief analyst, traditional sectors will continue to face negative factors (low GDP growth expectations, potentially higher prices compared to 2024, etc.) Most of the demand growth this year will come from new electrification sectors. The main drivers will be the development of data centers, heat pumps, and electric vehicles.
In 2024, according to ICIS estimates, electricity demand in Europe grew by 1.3% y/y, or 38 TWh (adjusted for weather conditions, demand was about 1.5% higher year-on-year).
The company expects the solar energy industry to remain in a strong position this year. The sector will increase generation volumes (by about 55 TWh), but the number of installations is not likely to increase. This will mean the first drop in capacity growth since 2016.
ICIS expects that wind power will also account for about 55 TWh of additional generation this year. This will be partly due to capacity growth. In addition, there are expectations of more windy periods than in 2024.
This year, the region is likely to see a decline in electricity generation at nuclear power plants (by 2% y/y). In France in 2025, this figure is expected to be at the level of the previous year, while Belgium will see a combination of temporary and permanent reactor closures.