Analysing drivers and interdependencies in European electricity markets using XAI
What actually drives electricity prices across Europe's interconnected power grid
Researchers used artificial intelligence to decode why electricity prices fluctuate across 39 European regions, revealing that solar power influences prices far more than its overall share of power generation would suggest. Gas prices remain the most consistent driver, and direct connections between countries' grids significantly reshape pricing in neighboring nations—showing how tightly Europe's electricity systems are now linked.
European governments and grid operators make billion-euro decisions about energy policy, transmission upgrades, and emergency reserves based on price forecasts. Understanding which factors actually move prices—rather than just predicting them—lets policymakers target the right levers: they might invest differently in solar storage if solar truly dominates price swings, or prioritize grid upgrades between countries if interconnections reshape regional economics. This analysis also shows what a genuinely unified European market would look like, crucial information as the EU pushes toward deeper energy integration.