German power for March 2 settles at EUR 92.87 /MWh: EPEX auction

German power for March 2 settles at EUR 92.87 /MWh: EPEX auction

German Power Prices for March 2023 Settle at EUR 92.87/MWh: EPEX Auction

In March 2023, German power prices settled at EUR 92.87 per megawatt-hour (MWh) on the EPEX Spot day-ahead market, reflecting a continuation of the downward trend observed throughout 2023. This marks a significant decline from the elevated levels seen in 2022, driven by reduced gas prices and a record share of renewable energy generation.

The annual average base load price for 2023 fell to 95.2 €/MWh, with peak load averaging 106.2 €/MWh and off-peak load at 89.1 €/MWh. These figures represent a sharp decline compared to 2022, when prices surged due to disruptions in Russian gas supplies. The reduced coupling between electricity and gas prices in 2023 was attributed to renewable energy sources accounting for 56% of total generation, the highest share on record.

Notably, 2023 saw unprecedented levels of negative prices on the day-ahead market, totaling 301 hours. Of these, 260 hours fell under the "4-hour rule," a regulatory mechanism that suspends EEG compensation for power plants during prolonged negative price periods. The most extreme negative price occurred on July 2, 2023, when the hourly price dropped to -53.9 €/MWh, driven by oversupply from renewable sources.

Price volatility remained high, with nearly half of 2023's spot market prices exceeding 100 €/MWh. The peak/base price ratio of 1.1 in 2023 was slightly lower than in prior years, reflecting a narrowing gap between peak and off-peak demand periods.

The German market also experienced significant price spreads, with the maximum hourly price spread reaching 97.9 €/MWh in 2023. While volatility was lower than in 2022, it remained higher than pre-2021 levels, offering opportunities for storage operators and flexible generation assets.

These trends underscore the evolving dynamics of Germany's energy market, shaped by renewable integration, regulatory adjustments, and lingering gas price sensitivities.

German electricity prices on EPEX Spot 2023 - FfE: German electricity prices on EPEX Spot 2023 - FfE.