In August 2022, the average spot price for electricity in Italy was €537 per MWh, compared to €229.6 per MWh in January 2022
In August 2022, the average spot prices for electricity in Italy increased by 2.3 times compared to the average price in January 2022 – up to €537 per MWh. This is evidenced by the Trading Economics’ data. Electricity prices in Italy began to rise from the beginning of 2022, but the main jump was after the invasion of Russia into the territory of Ukraine. From February 24 to March 8, 2022, prices increased from €210 per MWh to €587.67 per MWh. After the price boom, the market stabilized, and by mid-March the price of electricity dropped to €242 per MWh and remained in this range.
Starting from June 2022, electricity prices in Italy began to rise steadily, and at the end of August, the price of 1 MWh reached a record €716.78. The month ended at a price of €513.68 per MWh. Thus, the average spot price in August 2022 exceeded €500 per MWh for the first time. In the last month of summer, electricity was the most expensive in Europe due to rising gas prices. High energy prices are wreaking havoc across the region, accelerate inflation and undermine the functioning of industry. “The gas problem is largely due to Russia’s war in Ukraine, which has disrupted exports of Russian gas to Europe and raised prices everywhere else. But this is not the only reason. Gas from alternative sources is expensive, and the climate change has drained rivers so much that many of Europe’s nuclear plants have been shut down,” notes FP.
At the same time, despite the jump in prices, the EU managed to fill up gas storages, which made it possible to quickly overcome the panic on the market. At the beginning of September 2022, the Russian Federation refused to launch one of the main gas pipelines to Europe. Against this background, the price of gas rose by 36.7% during the day compared to the price a day earlier – up to €283 per MWh. The next day, trading opened at €232/MWh, and the price remained stable throughout the day.
As GMK Center reported earlier, in September 2022, the European Commission plans to introduce a single electricity price limit for the entire market at the level of €180 MWh as part of the EU’s initial package of emergency measures to curb electricity prices. The cap will apply directly to the price of electricity produced by non-gas plants.
Also, European steelmakers have recently experienced difficult times. Low prices and weak demand for finished steel, combined with very high energy prices, have caused a wave of steel shutdowns in Europe. From the beginning of September 2022, about 7 million tons of ArcelorMittal’s annual capacities have been stopped across Europe. Following ArcelorMittal, US Steel Kosice, Dunaferr, Liberty Ostrava, Ferroatlántica, Ferriere Nord and others have decided to reduce or stop capacity.