Eastern Europe is shaking from expensive electricity: Ukraine has given a new normality

High wholesale electricity prices in Eastern European countries have become a new regular normality. On December 5, the average cost again exceeds 200 euros per MWh, and during peak hours - 700 euros per MWh. Among the reasons — export to Ukraine, which lacks its own generation.

On December 5, wholesale electricity prices in Eastern Europe jumped again. In Hungary, the average cost was 210 euros per MWh, and during peak hours — 718 euros. In Romania and Bulgaria, prices were slightly lower — 204 and 703 euros, respectively. In Slovakia, they pay 506 euros per MWh for wholesale electricity today at peak hours, and in Croatia — 408 euros.

Similar price rallies began to shake Eastern Europe in the summer and in September. And continued in November and December. In the last month of autumn, the average daily cost of wholesale electricity in Hungary reached 355 euros per MWh, and during peak hours - 895 euros per MWh.

There are several reasons for price jumps. On the one hand, there is a free market in the region, as well as throughout Europe. On the other hand, interconnectors between the countries and with Western Europe are weak, and the green power plants being introduced are unstable. Therefore, increased demand, high gas prices and the prevention of power plants (in November, the Kozloduy NPP unit in Bulgaria was repaired) immediately affect the price. This year, the situation is sharply worsened by the start of exports to Ukraine, which sorely lacks its own generation.

"It is expected that the Ukrainian factor, according to market estimates, will further burden the system of South-Eastern Europe and electricity prices in winter due to increased needs," the Greek Kathemirini wrote in November.

The operator of the Ukrainian system indicates that on December 5 at Ukraine imports 12.45 GWh of electricity from the countries EU and Moldova. According to ENTSO-E, the largest suppliers will be Hungary and Slovakia. They will account for 70% of all deliveries.

From December 1, Ukrainian companies can import 2.1 GW per hour from the EU instead of 1.7. However, this does not affect purchases in any way, as part of the volumes are purchased only when absolutely necessary.

Ukrainian trader D. Trading reported that in the last month of autumn it was profitable to buy electricity abroad for only 20% of the hours.

Wholesale electricity prices in Eastern European countries affect companies that buy it on stock exchanges. The population mostly does not fall under prices comparable to the energy crisis in 2022. Thus, the Commissioner for the regulated system of pricing for utilities of the Hungarian government, Szilard Nemeth, said that prices for the population in November were the second most affordable in Europe after Serbia (93 euros per MWh). According to him, every eight out of ten households in the country pay such tariffs.