The ACER report presents key findings and specific recommendations. Broadly, this includes 9 recommendations to Member States, regulators, transmission system operators and distribution system operators, including to:

• Speed up implementing regulatory changes to remove persistent barriers to electricity consumers and other new entrants and small players.

• Accelerate the roll-out of smart meters, provide proper price signals in electricity bills contracts and raise consumer awareness to activate demand response.

• Ensure that local markets for congestion management have a chance to develop and mature. Define a transparent national process to assess when/where local markets may be implemented.

• Facilitate new entrants’ access to retail energy markets.

• Be targeted, tailored and temporary when considering retail price interventions.

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Interested in report's key findings? See the informative infographic.

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In 2022, electricity markets saw significant price spikes, mainly due to the Russian invasion of Ukraine. In its analysis, the report underscores how market integration is essential to reinforce the electricity wholesale markets’ resilience.

It analyses the status of the electricity wholesale market integration in 2022, taking into account the exceptional circumstances caused by the energy crisis:

• Interconnected electricity markets provided increased resilience against the energy crisis and ensured security of supply.
• Ukrainian power system is synchronised with Continental Europe (since 16 March 2022) under the emergency regime. Cross-border capacity allocation and commercial exchanges contribute to market functioning. While progress was achieved, joint cross border capacity allocation is yet to be implemented.

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• Interconnection capacity available for cross-zonal trade of electricity remains low across the EU. The minimum 70% target of interconnection capacity is still far off for most Member States.
• Reaching the 70% target is a collective effort: Each Member State’s actions (or inactions) impact other Member States and ultimately consumers.
• Lifting both internal and cross-zonal constraints is necessary to achieving the 70% target. Old barriers persist:
  • Loop flows, i.e., internal trades within country A creating electrical flow through country B, thus creating congestion;
  • Insufficient and costly remedial actions;
  • No mechanism in place for sharing the cost of remedial actions.

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See the corrigendum.

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Interested in key findings? See the informative infographic.

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More than 400 measures were adopted by Member States in response to the energy crisis. Member States had to swiftly respond to complex issues during the crisis, sometimes lacking a comprehensive overview of potential short- and long-term implications of choices made. This report’s objective is not to assign blame but rather to assist decision-makers in making informed choices in similar situations in the future.

The ACER Assessment focuses on lessons learned. This ACER report assesses drawbacks and merits of types of emergency measures against the achievement of 5 regulatory goals, namely how the measures;

1. Help consumers in terms of electricity affordability;
2. Contribute to security of supply;
3. Support energy transition and investment signals;
4. Promote energy efficiency and demand response; and
5. Contribute to efficient cross-border trading and market integration to benefit European consumers. Market integration allows for the mitigation of price shocks and increases security of supply.

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ACER's inventory in the form of an interactive dashboard provides a high-level analysis of the measures.

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• Every Member State has adopted energy emergency support measures.
• 1/3 of the measures aim at what we have labelled broader security of supply objectives, while 2/3 aim to tackle affordability for end-consumers.
• Almost 1/2 of the measures take the form of direct support to final consumers.
• 1/2 of the measures targeting broader security of supply objectives aim at increasing energy efficiency and renewable generation uptake, thereby also contributing to the Green Deal and Fit-for-55 policy goals.
• Some measures aiming at replacing the use of gas for heating or for producing electricity could, however, hamper the decarbonisation goals; hence, their use should be limited to areas where alternatives to safeguarding security of supply are not readily available.
• 40% of the measures aiming at tackling energy affordability target households (sometimes inter alia with other consumer groups) but less than 1/4 of them target vulnerable consumers.
• 60% of the measures aiming at providing direct support to consumers come in the form of income support (e.g. one-off cash payments), while the rest come in the form of discounts in the energy bills (price support).

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ACER's inventory in the form of an interactive dashboard provides a high-level analysis of the measures.

What were the main wholesale electricity trends in 2022?

• The energy crisis combined with a mild winter led to a decrease in electricity consumption, especially during the last quarter of 2022. Demand reduction resulted in lower power generation.
• Although electricity production from renewables remained almost constant, emissions increased due to the rise in coal and gas power generation, and low nuclear production.
• Installed capacity of renewables reached a new record in 2022, while coal-installed capacity decreased. However, the use of coal-fired power plants significantly increased since 2020.
• A sharp increase in day-ahead prices. The post pandemic economic recovery and Russia's invasion of Ukraine dramatically affected gas prices, which led to an increase in electricity prices across the EU.
• Forward markets also reached high price levels in 2022, especially for products for delivery in autumn and winter months.
• Negative day-ahead electricity prices reached pre-2019 levels. This seems to be correlated with demand reduction, as 50% of the negative prices were observed during the last quarter of 2022 and 20% in December alone.

See the ACER’s interactive dashboard for the evolution of generation from renewable energy sources compared to fossil fuels (by selecting the years 2020 and 2022).

Access the ACER Market Correction Mechanism Effects Assessment Report.

In its preliminary report, ACER proposes to use eleven market indicators in its final effects report due on 1 March 2023. These indicators cover across three areas: prices, flows and trades.

ACER welcomes stakeholder feedback on these indicators, and in particular on the following questions:

• Are there any potential effects that could be triggered by the MCM, and early warning signs that should be monitored, that have not been identified in this ACER report?
• Are there any indicators that you consider relevant for assessing the effects of the MCM that have not been discussed in this ACER report?
• Are there any other points which you consider relevant to improve the ACER report on the effects assessment of the MCM that is due on 1 March?

Interested parties should send their feedback on the indicators by Monday, 6 February 2023, to MCM_effects@acer.europa.eu.

See the ACER preliminary MCM report. 

Among the main trends identified in 2022 and the first half of 2023:

• The extreme wholesale gas price rises during 2022 can be primarily attributed to the Russian supply shock. However, it was the resilient demand for gas, driven upwards by above-average storage injections, that caused prices to clear at record-high levels;
• Since the end of 2022, the demand-supply balance in the gas market has improved due to a combination of rising liquified natural gas (LNG) imports and a decrease in demand, effectively compensating for the loss in Russian pipeline flows;
• This improved balance has resulted in a reduction in gas prices, which are now approaching pre-crisis levels. However, supply is overall still tight exposing prices to unexpected developments. China’s LNG demand remains an important factor for EU gas prices going forward;
• The significant price spreads between Northwest European (NWE) and South European hubs during the summer of 2022, caused by limited access to NWE, have returned to normal levels, due to increased LNG import capacity;
• Gas trading activity has increased in recent weeks due to more favourable prices and reduced margin requirements.

Access the Key developments in EU gas wholesale markets – 2023 Market Monitoring Report.

See the underlying dataset.

Dive into our interactive dashboard and explore the evolution of price and demand supply metrics for the period 2015 to 2023.

• The EU's integrated gas system showed a certain resilience against the energy crisis. Yet, the severe supply shock led to highly congested access to LNG terminals and pipelines, causing price surges, hub price disparities and trading disruptions.
• After the 2022 shock, the European gas market supply and demand balance improved thanks to consistent imports of Liquified Natural Gas (LNG) and a significant decreased gas demand. This resulted in gas prices to trend closer to pre-crisis levels.
• Global gas supply overall is still tight, exposing prices to unexpected developments. China’s LNG demand recovery remains an important influencing factor on EU gas prices going forward.
• The report highlights the lasting impact of the Russian supply shock on the EU energy market and the steps done to overcome the supply dependence. It draws some lessons for the future around the EU gas markets’ future resilience factors: increased EU reliance on LNG; reducing gas demand; revenue redistribution; and the enhanced security of supply role of underground storages.
  • European gas prices will be more exposed to global competition and hence will be more volatile.
  • The reduction in conventional gas demand shall assist the EU’s decarbonisation goals. Yet, it needs to be done smoothly in order to preserve the economic activity and the security of supply that gas offers to the EU’s energy system.

Access the ACER-CEER European gas market trends and price drivers report.

Dive into ACER’s interactive dashboard and explore the evolution of price and demand supply metrics for the period 2015 to 2023.

Missed our webinar? Check out the slides and watch the recording.