Powering Europe: Energy costs and analysis of the electricity market among EU member states.

The price of electricity in Greece, determined by daily auctions under the European Target Model, is shaped by several dynamic factors. An analysis of hourly prices over the last four years quantifies these influences, providing transparency to this traditionally complex market.

The study finds that Renewable Energy Sources (RES) and interconnections are the primary drivers of price reduction. Specifically, RES penetration—which now exceeds 50% of the country's energy mix—reduces the price by €10/MWh for every 600 MWh of added production. Conversely, price increases are driven by factors like the Natural Gas (PSV) index and CO2 emission costs, with a €3/MWh rise in PSV leading to a €2/MWh rise in electricity price. Increases in residual demand and low water reserves also push costs higher.

The analysis highlights significant intra-day price volatility, often referred to as the "canyon curve". Prices frequently hit zero or even negative levels during midday hours due to high solar (PV) generation, only to soar during evening peak hours as the system relies on conventional units to meet demand in the absence of batteries.

Ultimately, while external commodity costs exert pressure, the strengthening of interconnections with cheaper neighboring markets and continued growth of RES are crucial tools for price stability and cost containment in Greece's ongoing green transition.

To find out all the affecting factors, read the full report here!