SDAC Market Watch

Why the SDAC Market Watch?

SDAC is the largest coupled electricity market area, and its price keeps providing the most robust price signal in Europe. Analysing it is essential because day-ahead prices signal short-term supply-demand balance, inform trading and hedging decisions, and guide operational and investment choices across interconnected European power systems. The SDAC Market Watch includes:

• Day-ahead price developments across the entire SDAC area and the fundamentals driving them 
• Price convergence levels across Capacity Calculation Regions
• Occurrence of negative prices and reasons for year-on-year changes
• Tendencies in net positions of individual bidding zones
• The impacts of allocation and active constraints on price convergence 

Key insights for winter 2025/2026

Average SDAC prices in Winter 2025/26 were ~15-25 €/MWh lower than those last winter, with a price decrease across most of western, central and eastern Europe. The Nordic and Baltic regions experienced a price increase, most likely due to a harsher winter and decreased renewable generation. Prices converged less than last winter, mostly due to price drops of 33 €/MWh in France and 40 €/MWh in Greece, leading to price differences with their neighbours. Due to price increases in the Nordics and Baltics, their prices more closely matched higher-priced central Europe countries this winter.

The Middle Eastern conflict leads to ripple effects in the EU electricity markets with a +25 €/MWh increase in the average SDAC price since the beginning of March. Italy, the Netherlands, Greece and Latvia rely heavily on natural gas for their electricity generation, with some having +50% of their load covered by natural gas. Since Italy is Europe’s biggest importer of Middle Eastern gas, we deep-dive into the Italian gas and electricity price developments.

Although negative prices are rare in winter, an interesting spike of 100+ negative hours happened in Iberia, the highest occurrence in the past three winters. In Spain, 520 of the 570 negative-priced quarters occurred in February. Excess wind energy in both Spain and France seem the most likely cause.

Austria further expands it import position this winter due to lacking rainfall and hydro generation. While hydro generation in Austria amounted to 11.1 TWh in winter 2023/24, this winter’s output was only 6.0 TWh.

Polish allocation constraints limited the day-ahead market more than in 2024/25, but less than in 2023/24 and far below the unusually high levels seen in autumn 2025. The impact was mainly on imports (around 10% of the time), while export constraints were minimal, reflecting Poland’s shift back to being a net importer due to relatively higher electricity prices.

Explore the full SDAC Market Watch