September 29, 2022

European power prices shatter records as energy crisis intensifies

2 min read

German electricity prices for next year, considered Europe’s benchmark, briefly fell to €840 ($839.69) per megawatt hour before falling above €1,000 ($999.80) per megawatt hour on Monday.

“It’s not normal at all. It’s incredibly volatile,” said Fabian Rønningen, senior analyst at Rystad Energy. “These prices are now reaching levels that we thought we would never see.”

Prices have risen since Russia’s Gazprom. announced It said it would shut down the Nord Stream 1 gas pipeline for three days starting Wednesday to carry out maintenance work, raising fears that Moscow could cut off gas to Europe altogether. Can, which is in a race to stock up on supplies before winter.
When the critical pipeline went offline for repairs for 10 days in July, many policymakers It was feared that it would not return.. When Russia resumed operations, the flow decreased significantly.

France’s nuclear sector, which provides about 70% of the country’s electricity, is also struggling with low output, driving up the country’s energy prices.

The Czech Republic announced on Monday that it will convene an emergency meeting of Europe’s energy ministers in Brussels next week as the region looks for solutions to the problems.

Businesses are concerned that they may have to shut down operations in winter if power is low, while households may struggle to pay rising heating bills. The result can trigger one. Deep recession.
There was reason for hope on Monday. German Economy Minister Robert Haebeck said the country’s gas inventory were fillingand the country will not have to pay the high prices currently commanded by the market.

Germany’s gas storage facilities are about 83 percent full and will reach the 85 percent mark in early September, according to Haebeck.

But great uncertainty remains. According to Rønningen, higher electricity prices for next year indicate that traders do not think the crisis will be overcome in the coming months.

“It may be that we have several winters where we have to find solutions one way or another,” said Shell CEO Ben van Bearden. said in a press conference Monday in Norway.
Uniper, Germany’s biggest natural gas importer, said Monday it would. Need more help? From the government, an additional €4 billion ($4 billion) is requested. The company said it was short on cash due to a drop in Russian exports, forcing it to pay sky-high market prices to fill supply gaps.

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