Prices on the energy market are unprecedentedly high. Where the oil price now seems to have passed its peak, this is not yet the case for electricity. In fact, electricity on the spot market has never been as expensive as it is now.
As usual, the electricity quote on the EPEX Spot dipped on Sunday. August 14, the price stood at €318,19 per MWh. An electricity price of over €300 per MWh has not been unusual in recent weeks, but is exceptional for the weekend. The price is on the rise this week. Today the EPEX stands at €454,79 per MWh. Never before has the listing been at such a high level.
It is difficult to pinpoint an exact cause for the extremely high electricity price at the moment. Several experts point to a combination of factors. First of all, there is the war in Ukraine that has thrown the energy market out of balance in various ways. In the generation of electricity, for example, the supply problems with gas also have a major impact on the market. Electricity production with gas has gained popularity in Europe in recent years, partly because of the lower environmental impact of this fuel.
Drought kills
The hot and dry weather exacerbates Europe's problems with power generation. Germany is forced to resort to coal-fired power stations. For the transport of coal, however, the German power stations depend to a large extent on supplies via the rivers. The low water levels, especially in the Rhine, mean that less capacity is available for the supply of coal. In France, the low water levels cause a lack of cooling water for the nuclear power plants. A number of power stations are (or have been) out of operation due to potential safety risks due to corrosion in a certain type of reactor. Now the capacity is further reduced due to a lack of cooling water.
The high energy prices meanwhile are not doing the energy companies any harm. In Europe, a broad discussion has arisen as to whether the (excessive) profits of the energy companies should be skimmed off. Countries such as France, Italy and the UK have taken or are preparing measures in this direction. German Finance Minister Christian Lindner said in an interview with the ZDF that he was not in favor of this. According to Lindner, the market has to do its job. Electricity is expensive due to a shortage. Those high prices will provoke a reaction in the market. An extra tax for energy companies would mean that the tax system would fall prey to arbitrariness, according to the minister.