Μake us preferred on Google Electricity prices in Europe climbed to particularly high levels on Monday, exceeding 600 euros per megawatt-hour during the evening peak hours. The sharp rise is linked to a significant drop in wind power generation, which limited available supply at a time of increased energy demand.
The pressure on European markets is expected to continue at least until Wednesday. According to forecasts cited by Bloomberg, a slow-moving weather system is bringing calm winds and heavy cloud cover to much of northwestern and central Europe, reducing output from both wind and solar installations.
The problem is most severe in Germany, the United Kingdom and the Benelux countries, where the drop in wind generation is making it harder to meet demand. A sign of the situation was the warning from Britain’s electricity system operator about tight supply margins on Monday morning, with the estimated shortfall reaching 1.4 gigawatts.
With natural gas prices already high this year, electricity prices are also elevated across Europe, as gas-fired power plants often set the marginal price of electricity. The effect is especially strong during cold, windless periods, known by the German term “Dunkelflaute,” when renewable output falls and more expensive fossil fuel plants must be brought online to meet demand. The more often these periods of low wind and solar generation occur, the more likely it is that the region will see sharp price spikes this winter.
Higher heating demand could add further pressure to electricity markets, as temperatures are expected to fall 1 to 3 degrees Celsius below seasonal norms this week, according to MetDesk meteorologist Ben Davis.
The ongoing pressure on electricity markets is reflected in rising futures. December contracts in Germany and France are already trading near 200 euros per megawatt-hour on the EEX exchange, more than double their level a year ago.
Day-ahead electricity prices in France for Monday settled at 334.12 euros per megawatt-hour in the Epex Spot SE auction, the highest level since December 2022. In Germany, prices settled at 345.64 euros per megawatt-hour, while in some 15-minute intervals during the evening, they even exceeded 600 euros.
