Universal Registration Document 2022

5.1.2 Economic environment

5.1.2.1 Market prices for electricity and the principal energy sources

In 2022, average spot prices for electricity were significantly higher than in 2021 all over Europe.

5.1.2.1.1 Spot electricity prices in Europe ⁽¹⁾

In an interconnected European market, analysis of French market prices must be related to analysis of market prices in the neighbouring countries.

The comments below concern baseload prices.

In France, spot electricity prices stood at an average €275.8/MWh (baseload) and €317.1/MWh (peakload) in 2022, an increase of €166.7/MWh and €189.7/MWh respectively compared to 2021.

This significant increase resulted from a combination of two factors:

• a serious increase in commodity prices, particularly for gas, which caused a substantial rise in the cost of fossil-fired electricity generation;
• a decline in energy output, down by 80.4TWh from 2021, driven by a decrease in generation of nuclear power (-81.7TWh) and hydropower (-13.7TWh) to 279.0TWh and 41.9TWh respectively in 2022. These downturns were partly offset by a +9.5TWh (+29.5%) increase in output by gas-fired plants, and higher photovoltaic and wind power output, which rose by 4.3TWh and 1.7TWh respectively.

Despite a decline in demand to 444.7TWh for 2022 (-20.9TWH below 2021), France was a net importer of 16.8TWh, whereas it is historically a net exporter (to the extent of 44.3TWh in 2021). In 2022, France was in a significant net import position with respect to the CWE zone, the United Kingdom and Spain (27.4TWh, 9.9TWh and 9.7TWh respectively) but remained a net exporter to Italy and Switzerland (18.0TWh and 12.2TWh respectively).

In the United Kingdom, spot electricity prices were €102.6/MWh higher than in 2021, at an average €240.1/MWh for 2022. This increase resulted directly from the pressures on commodities caused by the war in Ukraine. The lower demand and higher solar and wind power generation, combined with large-scale imports of LNG, limited price rises in the second half of the year.

In Italy, spot prices rose by €181.6/MWh compared to 2021, to reach an average €307.3/MWh for 2022. They rose significantly from the start of the year, together with gas and CO₂ price increases, due to the war in Ukraine and rising demand in the first half-year. A fall in commodity prices from September, and declining demand, kept price rises in check at the end of the year.

In Belgium, spot prices were up by €140.4/MWh from 2021 to an average €244.5/ MWh for 2022. This increase is explained by significant price upsurges for gas and CO_2, despite a pronounced downturn in demand, particularly during the fourth quarter of the year.