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> Doesn’t Europe also have coal, nuclear and renewables; and import of oil from Middle Eastern countries? The European electricity market is regulated in such
by nephanth 4y ago
> Doesn’t Europe also have coal, nuclear and renewables; and import of oil from Middle Eastern countries?
The European electricity market is regulated in such a way that all energy is priced at the production price of the most expensive plant running. If I understood correctly, this is done so that no plant
will operate at a loss (and risk closing, which could lead to energy shortages).
In particular, this means prices of energy follow those of gaz, even though there are cheaper alternatives
- fulafel 4y agoNot exactly. The spot market and the long term contracts & futures are complementary. The spot market does tend to follow the anomalously high marginal price closely but there are lots of years long contracts which do not. See eg https://fsr.eui.eu/electricity-markets-in-the-eu/ https://fsr.eui.eu/electricity-markets-in-the-eu/