An analysis of the evolution of electricity prices in January 2017

The accelerated growth of electricity prices on the OPCOM electricity exchange in January 2017 continues to be a controversy fueled by emotions, manipulation and incomplete understanding. Without a doubt, there are persons to be held accountable, important lessons to be learned, and things to be corrected, but this begs for a serious and objective analysis. Let’s notice from the very beginning that January – especially the second part of the month – was a very volatile period for all the regional power markets. The day-to-day variability was highest on the Hungarian and Czech markets. Further, it can be noticed that on the coupled 4M MC market, there was a stronger price coupling between the Romanian and Hungarian Day-Ahead Markets (DAM), respectively between the Czech and Slovak ones.

Nevertheless, the average price in Romania was one of the highest – after Hungary and Serbia – and considerably above the average of previous years. Indeed, a DAM base price comparison for the November – January timeframe from 2013 to 2017 shows a significant deviation from the norm in January 2017.

Two immediate questions arise: was the price increase linked to increasing volumes traded or to increasing consumption? And were there any other specific elements that influenced the market this January, in particular?

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