## 4 Analysis and Interpretation of Results
### Year-on-Year Dynamics of Electricity Price Volatility  
Electricity price volatility is now becoming one of the key indicators of market stability and risk, especially in the context of the increasing integration of variable renewable energy sources (RES). A comparative analysis of average price volatility (in EUR/MWh) has been carried out for six European markets: Germany (GE), France (FR), Poland (PL), Slovakia (SK), Czech Republic (CZ), and Estonia (ES) for the period 2015-2025. Between 2015 and 2020, most countries showed relatively stable volatility in the range of around EUR 6 to 15/MWh. The exceptions were Poland and Estonia, where values were significantly higher in the early years, which may be related to lower interconnection with surrounding markets and lower consumption flexibility. From 2021 onwards, a sharp increase in volatility can be observed in all countries analysed. In 2022, average daily volatility reaches record highs--up to 59.37 EUR/MWh in Slovakia, 56.39 in Germany, and up to 72.81 EUR/MWh in Estonia. This increase is closely related to geopolitical events (particularly the energy crisis after the invasion of Ukraine), the significant volatility of fossil fuel prices, and the ongoing expansion of RES without adequate flexibility mechanisms. While there is a slight decline in volatility in 2023 and 2024, values remain significantly higher than before 2021. In 2025, a slight increase reappeared in some countries, which may reflect continued structural tensions in the supply-demand balance. The findings confirm the conclusions from the literature [1; 2; 3; 4] that  
1. Once a certain share of RES is exceeded, there is an increase in extreme price volatility. Most countries have introduced support mechanisms for building RES. 2. The impact of volatility depends on the degree of connectivity with surrounding markets, the availability of storage, and the ability to flex demand. These results point to the need to implement flexibility-enhancing tools, such as battery storage, dynamic demand management, or more accurate prediction systems. Long-term volatility without accompanying measures can jeopardise the investment climate, increase risk for consumers, and worsen the operating conditions of electricity systems. The evolution of the year-on-year volatility is shown in Table 4, where it is clear that 2022 represents the most significant break in all the regions analysed. Percentage analysis of year-on-year changes in electricity price volatility (Figure 1) shows significant variability in dynamics over time and across countries. In the initial years (2015-2020), changes were relatively moderate, moving mostly within \(\pm 20\%\). Exceptions are cases of sharp declines such as \(-45.1\%\) in Poland between 2016 and 2017 or, conversely, increases such as \(+62.6\%\) in Slovakia between 2016 and 2017. These fluctuations are likely to reflect specific local factors--e.g., changes in generation patterns or fluctuations in electricity demand. The year 2021 brought a dramatic turning point, with volatility rising by more than 130% year-on-year in all countries surveyed due to geopolitical and market tensions, with increases of more than 159% in Germany and 185.2% in France. These developments clearly document the onset of a period of extreme market volatility. In 2022, the volatility is even more pronounced, with increases in Poland and more than in France, Slovakia, the Czech Republic, and Estonia. This confirms that the crisis was multi-year and systematic, and not a one-off blip. In contrast, 2023 and 2024 brought a gradual moderation of volatility, although values remained well above pre-2021 levels. In some countries (e.g., Poland in 2024: +56.4%), volatility rose again, suggesting a possible return of cyclical volatility. In conclusion, percentage changes in volatility are a useful indicator for detecting both market shocks and longer-term trends. The significant increases in 2021-2022 create a clear dividing line between the stable pre-crisis period and a new era of increased price volatility.