Europe power prices jump early May as CO₂ costs, weaker wind and rising demand lift weekly averages

Electricity prices moved higher across most of Europe’s major power markets in the first week of May, underscoring how emissions costs and shifting generation can quickly change trading conditions—even when daily prices soften later in the week. Weekly averages remained above the levels recorded on May 1 in most markets, creating an overall upward shift compared with the previous week.

Regional divergence: modest gains in Iberia, extreme rebound in France

The smallest percentage increases were seen in the Iberian markets. Portugal rose by 4.9% and Spain by 6.6%. By contrast, France posted the largest percentage jump among the analyzed markets, with a 494% increase that reflected a sharp rebound from earlier low levels.

Elsewhere, price growth varied widely. In markets covered by AleaSoft Energy Forecasting, increases ranged from 13% in the United Kingdom to 82% in Germany and the Nordic region, highlighting pronounced regional differences in supply-demand balance and generation performance.

Most weekly averages above €100/MWh; Italy leads

In the week of May 4, weekly average prices exceeded €100/MWh in most European markets. The exceptions were Portugal (€58.88/MWh), Spain (€59.76/MWh) and France (€73.95/MWh). Italy recorded the highest weekly average at €131.47/MWh.

Other markets fell within a narrower band above €100/MWh: €100.68/MWh for the Nordics and €119.45/MWh for the UK.

Low points on Sundays contrasted with sustained high-price sessions

On a daily basis, Portugal logged the lowest price of the week among all analyzed markets at €19.57/MWh on May 10 (a Sunday). On that same day, Spain and France also recorded very low levels below €25/MWh—€20.84/MWh and €21.22/MWh respectively.

Outside those lows, most other markets stayed above €65/MWh throughout much of the week. Italy and the UK maintained daily prices above €100/MWh for every trading day from Monday to Sunday within the period described, while Germany, Belgium and the Netherlands exceeded €100/MWh from Monday through Friday.

France and the Nordic market also briefly crossed above €100/MWh during select sessions.

What drove prices higher: CO₂ allowances, weaker wind and demand growth

AleaSoft attributes the upward pressure during early May to multiple reinforcing factors: higher CO₂ emission allowance prices, lower wind energy output across most markets, and higher electricity demand.

The supply picture was further tightened by declining solar generation in Germany and Italy. At the same time, stronger wind and solar production in the Iberian Peninsula helped limit price increases in Spain and Portugal relative to other regions.

Outlook: potential second-week decline if wind recovers

Looking ahead to the second week of May, AleaSoft Energy Forecasting suggests electricity prices may decline. The expected easing would be supported primarily by a recovery in wind generation across most European markets and a potential decrease in demand in selected regions.

Even so, gas price fluctuations are expected to remain an important driver of broader market behavior as traders continue to weigh fuel-linked marginal costs against changing renewable output.