Germany’s next year power prices, considered Europe’s benchmark, briefly rose above €1,000 ($999.80) per megawatt-hour on Monday before falling back to €840 ($839.69) per megawatt-hour.
“This is not normal at all. It is incredibly volatile,” said Fabian Rønningen, senior analyst at Rystad Energy. “These prices are now reaching levels we thought we’d never see.”
Prices have risen since Russia’s Gazprom announced it would shut down the Nord Stream 1 gas pipeline for three days from Wednesday to carry out maintenance work, raising fears that Moscow could completely cut off gas supplies to Europe, which is set to close before winter. hurry to stock up.
When the critical pipeline went offline for 10 days for repairs in July, many policymakers feared it would not be back. When Russia resumed operations, flows were significantly reduced.
France’s nuclear sector, which provides about 70% of the country’s electricity, is also struggling with lower production, pushing up the country’s energy prices.
The Czech Republic announced Monday that it will convene an emergency meeting of European energy ministers in Brussels next week as the region looks for solutions.
Businesses worry that they will have to shut down their operations periodically during the winter when there is a shortage of power, while households may struggle to pay rising heating bills. The consequences could cause a deep recession.
Monday was cause for optimism. German Economy Minister Robert Habeck said the country’s gas supplies are filling up and the country will not have to pay the high prices currently imposed by the market.
The gas storage facilities in Germany are almost 83% full and will reach the 85% threshold by early September, according to Habeck.
But great uncertainty lingers. According to Rønningen, the high electricity prices for next year indicate that traders do not think that the crisis will be contained in the coming months.
“We may well have some winters in which we have to find solutions one way or another,” Shell CEO Ben van Beurden said at a press conference in Norway on Monday.
Uniper, Germany’s largest importer of natural gas, said Monday it needs more help from the government and is asking for an additional €4 billion ($4 billion). The company said it is short on money due to the shortage of Russian exports, forcing it to pay skyrocketing market prices to fill the supply gaps.