Energy markets in 2023 – Focus on power
After a historic year of soaring electricity prices, 2023 is marked by a downward trend and relative stability. Discover what determined the shifts in 2023’s electricity market with our eBook “Energy markets in 2023”.
- Article
- 25/01/2024
Gentle start with favorable conditions
At the onset of 2023, electricity prices witnessed a significant decline attributed to mild, windy, and humid weather conditions. Mass LNG imports and ample natural gas stock levels contributed to the comfortable situation, countering initial concerns. However, a subsequent episode of corrosion in French nuclear power plants sparked a temporary wave of panic buying.
Following gas trends and supply sensitivity
The second quarter observed a continuation of the downward price swing in alignment with gas market trends. Sensitivity to any supply-side disruption persisted, with even the slightest hint of nuclear energy interruption risking a surge in prices. The market’s delicate balance underscored the importance of stable nuclear availability.
Summer heat, renewable energy, and geopolitical impact
Throughout the summer, forward electricity prices found support in hot temperatures, low wind speeds, and rising gas prices. However, the spot market experienced an increasing number of hours at negative prices, reflecting the impact of new renewable energy installations in 2022. Geopolitical events, such as industrial action in Australia, briefly elevated electricity prices before stabilizing with comfortable fundamentals.
Downward trend amidst varied factors
The final quarter of the year witnessed a notable downward trend in electricity prices. Factors contributing to this decline included sluggish demand, abundant natural gas supplies, increased French nuclear capacity, and unusually mild weather conditions. Although the Israeli-Palestinian conflict briefly elevated prices, they eventually continued their downward drift, influenced by factors like lower CO2 emission prices and strong wind and hydroelectric generation.
Looking ahead to 2024: key considerations
As we reflect on the shifts in each quarter of 2023, uncertainties persist. Economic outlook, weather forecasts, the energy transition’s ongoing impact, American LNG trends, French nuclear uncertainties, and geopolitical risks will continue to shape the power landscape. You need a guide to better understand the energy market shifts? Download our eBook.