Fossil fuels and nuclear energy dominate the electricity market. Due to a combination of circumstances, the generation of electricity does not exactly go smoothly. The supply of gas from Russia remains a major factor of uncertainty in the market. In addition, the energy companies are also affected by the hot and dry weather in electricity production.
On Thursday, August 4, the electricity price on the EPEX Spot peaked at €375,70 per MWh. This means that the peak last week was slightly lower than the weeks before, but electricity remains historically expensive. The trough in the market was also slightly lower than in recent weeks. On Sunday, August 7, the price dropped towards €200 per MWh, but eventually closed at €214,14 per MWh.
The electricity price partly depends on the natural gas price. The shift from coal-fired power stations to gas-fired power stations has created a strong correlation between gas and electricity prices on the European electricity market. The problems with the supply of gas from Russia are laying a firm foundation in the market.
Cooling water
The scarcity in the electricity market is exacerbated by problems in a number of French nuclear power plants. These nuclear installations are normally a permanent fixture on the European energy grid, but they can now be called upon to a lesser extent. The warm and dry weather forecast for the coming weeks is also causing problems for power generation. Power plants that are cooled with surface water are subject to strict rules for the temperature of the cooling water that can be pumped back. Warm water is oxygen-poor. France has extended an exemption for discharging hot water into rivers for five nuclear power plants. Although this has adverse consequences for life in the rivers, the French government is forced to take this measure due to the scarcity of the energy network.
In Germany it is the low water levels that cause problems in the generation of electricity. The strategy to phase out the generation of electricity from coal has resulted in fewer inland vessels being available for the transport of coal. Prices for river transport have fallen in recent years due to lower demand for coal. Partly as a result of this, the older ships and push barges have been taken out of service and shipping companies have increasingly focused on the transport of other products. Now that the supply of gas has stopped, the demand for coal is rising sharply again. Due to the reduction of the fleet, less transport capacity is available. The low water level in the rivers now exceeds that. The ships and barges that are available can no longer be fully loaded due to the draft.