## 1 Introduction  
In recent years, European energy markets have seen significant changes in electricity price levels and dynamics. While wholesale prices were relatively stable and predictable in the past, today, we are increasingly faced with significant fluctuations, outliers, and negative prices. This trend is particularly pronounced after 2021, when several crisis factors hit the markets: rising fuel prices, geopolitical tensions, as well as the rapid increase in renewable energy generation (RES). Foundational theories of electricity market pricing are grounded in microeconomic principles, particularly supply-demand equilibrium models, where prices are determined by the intersection of generation costs and consumer demand. Unlike traditional commodities, electricity cannot be economically stored in large quantities, which makes prices extremely sensitive to real-time changes in supply and demand. One of the most frequently cited mechanisms in explaining price formation is the merit-order effect. This principle describes how electricity generators are dispatched in ascending order of their marginal costs. The increasing share of renewable energy sources, such as wind and solar, which have near-zero marginal costs, shifts the supply curve to the right and typically leads to lower average market prices. However, this also contributes to higher price volatility, especially when renewable output fluctuates due to weather conditions. In periods of high demand or low generation capacity, prices can rise sharply due to limited supply--reflecting the high value of available electricity. This is particularly visible in \"energy-only\" markets. Market design also plays a central role. In the European context, electricity is largely traded in day-ahead markets (DAMs) and intraday markets (IDMs), where short-term forecasts, bidding strategies, and grid constraints influence pricing dynamics. The volatility in such markets is further exacerbated by the increasing integration of variable renewables, creating a need for flexible balancing mechanisms and demand-side participation. Comparative studies from other regions provide valuable insights. In the Nord Pool market, price volatility has been linked to hydrological conditions and interconnector constraints. In the Australian National Electricity Market (NEM), research has emphasised the role of peak demand, lack of reserve margins, and the influence of extreme weather events on price spikes. Meanwhile, North American markets like PJM and ERCOT have shown how capacity markets, strategic reserves, and regulatory oversight can help mitigate extreme volatility while maintaining investment signals [1; 2; 3; 4; 5]. Table 1 presents the development of the share of electricity production from renewable energy sources (RES) in selected European countries between 2015 and 2025. The data highlight significant differences in both the initial levels and growth trajectories among the countries. Germany shows the most pronounced and consistent growth in RES share, increasing from 32.3% in 2015 to a peak of 62.3% in 2024, before a slight decline to 55.5% in 2025 (however, it is only May--high production from photovoltaics is expected in the summer). This trend reflects strong national policies supporting wind and solar deployment, as well as high investment in grid integration. France, despite its large nuclear fleet, has gradually increased its RES share from 15.7% in 2015 to around 26% in recent years, with moderate year-on-year growth. In contrast, Central and Eastern European countries started from much lower levels. Poland, for example, had only a 9.4% share in 2015 but demonstrated rapid growth in recent years, reaching 29% in 2024, largely driven by the expansion of wind and solar installations. Slovakia and the Czech Republic showed slower progress, with relatively stable shares at around 20% and under 18%, respectively, by 2025, reflecting a more gradual energy transition and limited support mechanisms in the earlier years.