European power generation: what fossil fuel shocks teach us about electricity prices

Line chart showing average European wholesale electricity prices from 2021 to 2026, with sharp peaks during the 2021 gas squeeze and the 2022 Russia-Ukraine shock.

European power generation remains structurally tied to upstream fossil fuel markets, even as the generation mix has shifted from oil and coal to renewables and gas. The report argues that the fuel at the margin, rather than the dominant generation source, continues to drive electricity price shocks across Europe. European power generation has experienced repeated price shocks since the 1970s, […]

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