German Electricity Prices Plummet Amidst Declining Demand
Wholesale Prices Drop, Negative Pricing Hours Increase
According to recent market data, the average retail price of electricity in Germany fell sharply to 624.670MWh on the German electricity spot market in April. This significant decline is largely attributed to a decrease in demand, leading to an oversupply in the market.
Moreover, the day-ahead wholesale electricity price in Germany turned negative for an unprecedented 301 out of 8760 trading hours during the month of April. This trend continued into May, with 78 hours of negative electricity prices, a noticeable increase compared to April's 50 hours.
Impact on Gas Prices
Despite the widespread belief that Germany's electricity prices were heavily influenced by gas prices, the recent data suggests that the correlation has weakened significantly since 2022. This development is attributed to a reduction in demand and the increasing supply of renewable energy sources, which have played a vital role in mitigating the impact of volatile gas prices.
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