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Tuesday, October 3, 2023

New electricity price records in Europe; Reasons for price increase explained

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Photograph: SIPA/Scanpix

Electricity prices in Europe hit new records on Thursday as abnormal heat limited energy supply and forest fires worsened the situation in France, Bloomberg reported.

While European countries are actively trying to fill their gas tanks and build up reserves for the winter, Russia continues to reduce supplies, while the rise in prices reflects the tense situation in the natural gas market. Reducing nuclear reactor capacities should also be considered. Weak wind and hydropower development are putting pressure on electricity prices.

Indicative electricity prices in Germany for the coming year rose 6.6% to 455 euros per megawatt hour on the European Energy Exchange. The price of French contracts rose 7.8% to 622 euros per megawatt hour.

Abnormal temperatures in Europe this summer have increased demand and deepened problems with electricity supply, as hydroelectric power plants as well as the main water reservoirs used to cool nuclear power plants and transport energy carriers have almost completely dried up.

In France, the situation is particularly dire, where more than half of the nuclear power plants have been shut down for maintenance. Normally the country exports energy, but this year France is importing electricity, forcing neighboring countries to consume more gas.

Forest fires are also raging in France, which prompted French President Emmanuel Macron to seek help from other European countries and urge citizens to fight forest fires alongside tens of thousands of firefighters.

The energy shortage has sparked a warning in the UK that demand may temporarily exceed supply. Local electricity company National Grid said sufficient electricity is being produced, but the risk that demand will exceed available power is high enough, another challenge facing Europe’s electricity system this year.

Source: Tv Net

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