This “Quarterly Report On European Electricity Markets” prepared by the Market Observatory for Energy of the European Commission presents an assessment of the quarterly Electricity Market Fundamentals for the European market. It offers insights to the supply and demand side factors. The first quarter of 2023 was marked by improved market fundamentals that supported a fall in wholesale electricity prices, after the highs of the third and fourth quarter of 2022.

Improved market fundamentals supported a fall in wholesale electricity prices in European markets in Q1 2023. In Q1 2023, the European Power Benchmark averaged 122 €/MWh, 40% lower than in Q1 2022. Electricity consumption in the EU fell (-6%) compared with last year’s levels in 01 2023. Demand levels for the first quarter of 2023 were also well below the 2017-2021 range, registering the lowest value in February 2023.

In Q1 2023, reduced electricity demand combined with strong renewables generation, supported a drop in fossil fuel generation in the mix. The share of renewables increased to 41% in Q1 2023. Fossil fuel generation dropped by 15% (-40 TWh) in Q1 2023, supported by lower demand and sustained renewables generation. The decrease in wholesale prices registered in Q1 2023 alleviates pressure on household electricity retail prices across the EU.

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