Post by Mondo Internazionale

️From the oil shocks of the 1970s to today’s energy crisis, electricity price volatility remains a defining feature of global markets. While the energy mix has evolved and renewables have gained ground, the way electricity prices are set has not fundamentally changed.  ️ At the core lies the merit order mechanism: the price of electricity is determined by the most expensive source needed to meet demand. This creates a structural paradox: even in systems with a high share of low-cost renewable energy, fossil fuels like gas and oil continue to drive prices when they are required at the margin. Today’s more diversified and liberalised energy landscape offers greater resilience than in the past. Yet recent geopolitical tensions and supply disruptions remind us that electricity markets are still highly sensitive to external shocks. The challenge ahead is not only accelerating the energy transition, but also investing in flexibility and system design to reduce exposure to fossil fuel volatility. Read on our website 👉 https://lnkd.in/dQcShCsV Author: Beatrice Sala - Head Researcher #EnergyCrisis #ElectricityMarkets #MeritOrder #EnergyTransition #RenewableEnergy