Day-ahead prices (the leading market for electricity in the European Union) vary significantly across bidding zones due to different generation sources. Here we see that while bidding zones in Norway, Sweden and Finland experienced negative prices on the last day of May, Poland and Greece had sky-high prices above €100/MWh. Even within Norway, prices varied from minus €0.8/MWh in the north to €51.6/MWh in the south. Prices neared €100 in most southern regions, while Central Europe had mid to low prices.
Generally speaking, countries more reliant on gas saw the most significant price hikes during the energy crisis. In Italy, for example, average day-ahead prices rose by over 800% from 2020 to 2022. In contrast, Poland is more reliant on coal-fired power stations and experienced price increases of just 350%. Sweden retained the lowest electricity prices in the EU throughout the crisis. Its high shares of renewable energy in public electricity generation – in 2022 around 64% – clearly contributes to their energy independence and helps protect consumers from price volatility. Government intervention also influenced price increases. Spain and Portugal, for example, introduced controversial price caps for natural gas used for electricity production, thereby indirectly lowering the overall price of electricity in 2022.
Aside from a few outliers, this scatterplot reiterates that power prices drop as the share of renewables (wind and solar) increases, giving consumers a financial incentive to shift their consumption to times when renewable production is high. It also shows that renewables alone are not enough to consistently reduce electricity prices and their volatility. Digital technology is crucial to reduce the outliers and make the trend a more constant downward trend.
These calculations are based on the usage trends of an “average” commuter. We assume the commuter drives 11,300 km/year with a consumption of 15 kWh/100km and charges at home 75% of the time. Charging at the cheapest time periods with a smart charging solution enables savings of up to €213 in Austria, to €58 in Norway. The percentage cost reduction ranges from a massive 63% in Sweden to 24% in Norway.
However, because electricity prices vary from day to day and from country to country, the savings potential could be much higher on any given day. The key to always maximizing the savings is leveraging a holistic energy management system that uses time of use tariffs to always automatically shift charging to the cheapest time period, whenever and at whatever price that may be.
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