The quarterly report of the DG Energy for the third quarter of the 2018 showed that wholesale prices across Europe remained on an increasing trajectory. On some markets the price increase even accelerated compared to the first half of the year. The average monthly EU wholesale price rose from 42 EUR/MWh in January 2018 to 63 EUR/MWh by September 2018. Electricity demand grew both in the industrial and household sectors. Emission allowance, gas and coal commodity prices also continued to rise. The rapid growth of emission allowance prices continued as ETS allowance prices rose from 5 EUR/t in September 2017 to 21 EUR/MWh in September 2018. Allowance prices passed the 20 EUR/MWh mark for the first time in a decade. Gas prices grew by almost 30%, while coal prices experienced a moderate increase of 11% in a year-on-year comparison. Contrary to previous years, taxes were no longer the main price increase drivers of retail prices. Taxes remained largely stable as they changed less than 1% in half of the EU Member States in a year-on-year comparison. The highest retail prices for industrial consumers were recorded in the UK (171 EUR/MWh), followed by Germany and Italy. Denmark (327 EUR/MWh) recorded the highest household retail price in September 2018, Germany took the second place for this consumer type too, followed by Belgium.
The regional average wholesale price in Central and Eastern Europe (CEE) increased measurably between January and June 2018 and the trend of increasing wholesale prices continued through July to September. The monthly regional average baseload price rose from 35 €/MWh to 54 €/MWh. The hot summer across Europe also impacted the CEE region. Temperatures 4-6 degrees higher than the long- term average increased cooling needs, which in return increased electricity demand. Prices grew with growing demand. High temperatures and low river levels in Poland also put a limit on water cooling of power plants, resulting in reduction of electricity generation. The share of fossil fuel fired generation ranged up to 91% in Poland, up from 85% during the same period of the previous year. Poland reported also the highest share of variable renewables (on- shore wind) at 8% among all CEE countries during the third quarter of 2018. The share of variable renewables (solar and on-shore wind) increased in the Czech Republic from 2.8 to 4.2% in a year-on-year comparison. The Czech Republic remained a net exporter of electricity throughout the whole period, with net exports reaching as high as a quarter of the countries electricity consumption in September 2018. Hungary and Slovakia were net importers up to 20-30% of their domestic consumption.
Similarly to most of the European markets, wholesale electricity prices in the South-Eastern Europe (SEE) region increased in the third quarter of 2018. In Greece the average price grew from 60 EUR/MWh in June to 67 EUR/MWh by September. The growth was even bigger in Bulgaria where the monthly average price grew from 33 to 47 EUR/MWh throughout the same period. The quarterly average price of 63 EUR/MWH in Croatia was between the quarterly averages of Greece and Bulgaria (65 and 46 EUR/MWh respectively).
In August 2018 Croatian prices decoupled from the other regional peers and showed a significant discount to Greece and Romania. Despite lower prices, Croatian electricity exports fell from 480 to 340 GWh from July to September. As hydro reservoirs depleted and precipitation decreased during the hot summer, hydro generation in Bulgaria decreased throughout the quarter from 565 GWh in July to 354 GWh in September. Still, hydro powered generation was 90% higher in September 2018 than in the same month of the previous years. Hydro generation in Romania experienced a sharp fall from 2.1 to 1.2 TWh from July to September 2018 as reservoirs depleted and river levels decreased during the hotter than usual summer. The decreased availability of cheaper hydro powered electricity contributed to the fact that the average wholesale price in Romania grew from 44 EUR/MWh in June to 59 EUR/MWh by September.