German power prices at a significant premium to neighbouring France

While in France we will have today (April 1) electricity prices nearing zero, German power prices will display a premium of €82/MWh.

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Fascinating to see such price differentials… in gas markets, at best we have €1-2/MWh price spreads between European hubs.

Of course electricity is a more complex and more volatile commodity.

But what could drive such a wide price spread between two neighbouring markets, with quite similar meteorological conditions and significant interconnection capacity?

The key driver is of course the generation mix: while Germany decided to phase-out nuclear, in France we still have 63 GW of nuclear capacity, providing stable, secure and clean electricity… for the Hexagone and beyond, with today being also a good day for French electricity exports.

What is your view? How does the power mix impact electricity prices? And what could be the implications of a German premium on industry? How could we built a more integrated European power market?

Source: Greg Molnar

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