The market conditions of the last few days, where a MWh sells for a penny and even registers negative values, do not reflect a sustainable trend in the long term, but lead even further down the graph of the accelerated decline in energy prices of the last year. With several GW of capacity announced to come online this year and into 2025, investment companies will have a tough time meeting their yield targets if prices continue this trend.
OPCOM published a weighted average price for the day-ahead market (DAM, PZU) of 328.50 lei/MWh for March, approximately 6.2% lower than that of February 2024.
The March 2024 weighted average price is actually 53% lower than the February 2023 closing average price.
According to OPCOM’s latest available monthly report, the average price of electricity fell by 50.36% in February, compared to the same period in 2023, on the day-ahead market segment (PZU), in nominal terms, according to OPCOM data consulted by Energynomics.
Thus, the average closing price was 347 lei/MWh in February 2024, compared to 699 lei in February 2023. The volume of transactions increased by 3.09% in the aforementioned period, up to 1.6TWh, however, in February compared to January 2024, it decreased considerably, by 22.82%. Also compared to January 2024, the average closing price on PZU decreased by 20.42% in nominal terms.
The value of transactions in February, on PZU, was around 561 million lei, almost 48% lower than in the similar period in 2023 and almost 40% lower than in January 2024. The share of PZU transactions in the forecasted net consumption was of 37.4%.
When have negative values been recorded before?
In mid-May 2023, Romania fully registered negative electricity prices on the market for the next day, and negative prices of 2,000 euros per MWh were reached in the balancing market.
“Currently, Romania’s export-import capacity is somewhere around 3,000-3,500 megawatts in periods when the network is complete. In the period with withdrawals from operation, this drops to somewhere around 2,500 (MWh). But through the investments we are making in the next period, we have the obligation to reach over 5,000 megawatts of export and import capacity at the end of 2025. There are and will be large capacities and they will increase until 2030, along with the development of the electric transmission network, both in Romania, but also within the operators with which we operate interconnected… Consumers are the ones who pay and look at what what happened last weekend. It is the first weekend in which PZU prices in Romania were negative. In the balancing market that we administer, negative prices of 2,000 euros per Megawatt-hour have been reached. This means that those who had a surplus during those hours on the weekend, in addition to the fact that they purchased energy at market prices, will pay very, very high prices during the settlement stage. That is why consumption is needed and there is also another element, another facet, which we know less about, which is our responsibility, the defense and restoration part of a system”, said Virgiliu Ivan, director of DEN CNTEE Transelectrica, a year ago.
