German energy prices rose to a new record, putting more pressure on industrial production and households facing a cost-of-living crisis, according to Bloomberg.
Rising gas and coal prices and little sign of relief for Europe’s electricity infrastructure are pushing electricity higher. All this threatens the future of Germany’s industrial regions.
This week’s prices are “unbelievable,” analysts at Energi Danmark said in a note. “The rally in natural gas and coal and the very high spot prices we’ve seen this week have added further momentum to an already bullish market.”
Against this backdrop, German electricity for next year – the European benchmark – is on a nine-day rising streak. The contract rises by 1.4% and moves to a record level of 545 euros per megawatt hour. Meanwhile, European coal prices for next year rose 2.1% also to a record high of $311.50 a tonne.
It is noted that Russia is restricting natural gas flows to Europe as heat waves curtail hydroelectric and nuclear generation, straining electricity supplies. Germany is trying to use coal to ensure reliable electricity this winter, but low water levels in the Rhine are limiting the ability to carry out the plan. This situation is expected to ease on Tuesday.
Electricity for next year has risen more than 18% this week and, like natural gas prices, is trading about 11 times higher than historical normal levels.
Source: Capital
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