Something is rotten in the state of Denmark? ( ... and into the Energy Business?)

A peculiar (but not so unexpected) outcome popped up while evaluating the business model of an energy-related SaaS company.

Denmark is one of the top countries in the EU sourcing energy from renewable sources, while Cyprus is the top country in the EU dependent on petroleum.

Still, in a period with high gas/oil prices, Denmark increased the household electricity prices by 127.98%, while Cyprus by 32.68% !

For readers not so familiar with the energy landscape, the answer is obvious: "It’s the economy, stupid."

The spot price is determined based on which production units (e.g. wind, photovoltaic, coal, oil, gas ) are activated to cover consumption. The order of activation goes from the cheapest selling bid to the most expensive until the demand is met. The last activated production unit sets the market price for electricity that all producers receive. The gas power plants are often among the last units to be activated that end up setting the market price (!)

I guess all readers, understanding simple math, can calculate the mega-gains of the green energy providers!

P.S.1. The same absurd spot mechanism works in most EU countries, but Denmark looks like the champion!

P.S.2. Russia's invasion of Ukraine "boosted" profits of all energy providers: direct price increase of oil/gas but also huge profit margins for "green energy" providers through the spot energy markets mechanism.

The Cyclyst