Electricity prices in Europe posted record values on Thursday. The fear that Moscow will permanently cut the gas supply has consequences for the price of electricity as well.
Prices for natural gas and electricity have been on the rise since mid-June after Russia’s decision to reduce the capacity of Germany’s main gas pipeline by 60%. Europe also fears having to do without Russian gas this winter. The price of natural gas has therefore doubled in a few weeks to reach 180 euros per megawatt hour.
Belgium is a little cheaper
Electricity prices are no exception. They follow the prices of gas and coal. On Thursday, a new record was reached. The price for delivering electricity to Germany next year was 355 euros per megawatt hour. In France, the rates are also close to the peaks with 392 euros per megawatt hour. Belgium is a little cheaper and it takes 276 euros per megawatt hour for delivery in 2023.
Germany and France are the reference on the European market, explains Matthias Detremmerie, broker at Elindus. “The two countries have the largest production park in Europe. And given the interconnection on the Old Continent, we can see this as a single market.”
Gas supply is also uncertain in the future given certain irregularities in French nuclear resources. And in Germany, it is the particularly low water level of the Rhine which could weigh, indirectly. “In Germany, we are trying to produce electricity in any way possible. The country wants to produce it, for example, from coal-fired power stations. But since the level of the Rhine is particularly low, the supply of coal is compromise.”