Europe’s benchmark energy price topped €500 for the first time ever, escalating the continent’s energy crisis. Germany’s year-ahead power costs rose up to €502 earlier today, driven mainly by gas prices affected by the war in Ukraine.
The news brings with it fears of potential blackouts over winter as gas-starved Germany scrambles to make up for the energy deficit.
Not helping matters, output from France’s nuclear reactors is set to be at its lowest in decades while hydropower in some other countries is also low.
The recent heatwaves in Europe have also helped to drive up demand with the energy crisis now threatening to push some countries in Europe into a recession.
In a knock on effect, dry weather has also caused some rivers to run low or even dry. Notably, the Rhine has become unnavigable in places which means barges carrying coal can’t reach power plants.
This could pressure plants to use more natural gas, which is in dangerously short supply for Germany.
The Nord Stream 1 pipeline is currently only running at 20 percent capacity while routes running through Ukraine have been shut down by Kyiv.
The Eurozone’s largest economy is now scrambling to replace Russian gas with liquified natural gas (LNG) and has secured contracts to keep two offshore floating LNG terminals supplied over the winter.
However, this is likely an expensive stopgap measure – Berlin has already warned of gas rationing while Gazprom warned Europe today that gas prices could rise by up to 60 percent.
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Mayor of Hanover Belit Onay tweeted: “The aim is to reduce our energy consumption by 15 percent.
“This is a reaction to the impending gas shortage, which poses a major challenge for the municipalities – especially for a large city like Hanover.”
Other major cities, including Munich, Leipzig, Cologne, and Nuremburg have also adopted similar measures to conserve energy during the crisis.
As Europe struggles to save power there are looming fears that Russia could cut it off completely over the winter.