European electricity prices and costs

Methodology

Wholesale electricity prices 

• Wholesale electricity prices are average day-ahead spot prices per MWh sold per time period, sourced from ENTSO-E and EMRS.
• Prices have been converted from £/MWh to €/MWh for the UK.
• These are the prices paid to electricity generators, and are not the same as retail electricity prices or total costs to end users.
• Maximum and minimum prices refer to the highest and lowest average values of any country in the EU in that period.

Fossil Fuel Short Run Marginal Costs (SRMC)

The tool shows the Short Run Marginal Costs (SRMC) of generating a MWh of electricity using hard coal and fossil gas.

• The SRMC are the sum of the variable costs associated with producing electricity using hard coal and fossil gas. These are fuel costs, carbon costs and variable operating and maintenance costs.
• The fuel costs for fossil gas are calculated using the day ahead settlement prices  at the relevant national gas hubs:
  • Dutch Title Transfer Facility (TTF) for the Netherlands
  • Central European Gas Hub Virtual Trading Point (CEGH VTP) for Austria
  • Czech Virtual Trading Point (CZ VTP) for Czechia
  • Point d’échange de gaz Virtual Trading Point (PEG) for France
  • Trading Hub Europe (THE) for Germany
  • Punto di Scambio Virtuale (PSV) for Italy
  • Danish virtual point Exchange Transfer Facility (ETF) for Denmark
  • National Balancing Point (NBP) for the UK.

The TTF and NBP prices are the benchmark price references for fossil gas traded in the EU and in the UK, respectively. Gas price data sourced from Montel and Gestore Mercati Energetici (GME).

• The fuel cost for hard coal is calculated using the front month settlement price for API 2 Rotterdam coal. The API 2 Rotterdam coal price is the benchmark price reference for hard coal imported into Europe. Price data sourced from Montel.
• Carbon costs are calculated using the EU and UK Emissions Trading Scheme prices, front December contract. Price data sourced from Montel.
• For SRMC calculations, the following assumptions have been applied:
  • Power plant efficiency rates: Hard coal = 40%. Fossil gas = 50% (Higher Heating Value/Gross Calorific Value)
  • Carbon intensity rates: Hard coal = 0.83 tCO2eq/MWh of generated electricity. Fossil gas = 0.37 tCO2eq/MWh of generated electricity
  • Variable Operating and Maintenance costs for both hard coal and fossil gas = €2/MWh (converted to £/MWh for the UK).

Wind and Solar Levelised Cost of Electricity (LCOE)

The tool tracks historic yearly Levelised Cost of Electricity (LCOE) data for solar PV and onshore wind for selected European countries.

• The LCOE is used as a metric for the cost of producing electricity using wind and solar.
• The LCOE is the discounted lifetime cost of building and operating a generation asset per MWh of electricity. It is calculated by dividing the present value of all relevant costs faced by the generator over its lifetime by its total electricity production. It covers all relevant costs faced by the generator, including pre-development costs, initial capital costs, financing costs and operating & maintenance costs.
• LCOE data for newly commissioned utility-scale solar and onshore wind are based on IRENA’s Renewable Power Generation Costs in 2023 (published in September 2024). Offshore wind is not included due to limited data availability.
• In IRENA’s LCOE calculations, the following key assumptions are used:
  • Real after-tax weighted average cost of capital (WACC) is technology- and country-specific. For EU countries it ranges from 2.5%  to 7.7% for both utility-scale solar and onshore wind.
  • Economic life: solar PV and onshore wind = 25 years