The price of electricity was already at an unprecedented high level. The rally on electricity is not over yet. Developments in the gas market are an important driving force in this regard.
The quotation of electricity on the EPEX Spot reached the lowest point of the week on Sunday at €361,76 per MWh. That is a relatively high price compared to the electricity price in July. The high ranking on Sunday was already a harbinger for this week. Today (Tuesday, August 23), the EPEX reached a new record high at €603,55 per MWh.
The problems with the electricity supply have been piling up for months now. French nuclear power plants have been struggling with technical problems since the winter. The drought has also caused problems with the supply of cooling water. Nuclear energy is normally a cheap and stable factor on the electricity market. Increasing energy production in coal-fired power stations does not exactly happen automatically. In recent years, a policy has been implemented whereby coal-fired power stations would be phased out. This must now be undone as quickly as possible. The low water level in the Rhine makes the transport of coal even more difficult, especially in Germany. This drought is not only affecting Germany. In Scandinavia, for example, hydroelectric power stations cannot operate at full capacity.
Gas shortage
The problems with the gas supply via the Nord Stream now add an extra dimension to the European energy crisis. Last Friday, the Russian state-owned company Gazprom announced that it would suspend supply via this pipeline for three days at the end of the month due to maintenance work. The Member States are having great difficulty building up gas reserves for the coming winter. At the same time, a significant part of European electricity is generated from gas-fired power stations. The gas market is very tight and has an upward effect on prices. First of all, on the gas price, but the electricity price is also affected.