Energy prices break records in Europe as crisis intensifies

( Business) –– Energy prices in Europe continue to break records, while the crisis in the region intensifies and concerns about access to electricity and heating are heightened as temperatures begin to drop.

Next year’s energy costs in Germany, considered Europe’s benchmark, briefly spiked above 1,000 euros ($999.80) per megawatt hour on Monday, before falling back to 840 euros. ($839.69) per megawatt hour.

“This is not normal at all. It is incredibly volatile,” said Fabian Rønningen, principal analyst at Rystad Energy. “These prices are reaching levels now that we thought we would never see,” he added.

Fears about Russia

Energy prices have risen since Russia’s Gazprom ad that it would close the Nord Stream 1 gas pipeline for three days, starting this Wednesday, to carry out maintenance work. A move that reawakened fears that Moscow could shut off gas supplies to Europe completely. Just as the region scrambles to stockpile supplies ahead of winter.

Last July, when the key pipeline was closed for repairs for 10 days, many lawmakers feared it would not reopen. And by the time Russia restarted operations, the flows were significantly reduced.

France’s nuclear sector, which provides about 70% of the country’s electricity, is also facing difficulties due to lower production. What has raised energy prices in the nation.

The Czech Republic announced on Monday that it would convene an emergency meeting with Europe’s energy ministers in Brussels next week. Meanwhile, the continent seeks solutions.

The energy picture in Europe before winter

Companies worry that they will have to periodically stop operations during the winter if there is a power shortage. Meanwhile, households could struggle to pay skyrocketing heating bills. The consequences could trigger a deep recession.

However, there was reason for some optimism on Monday. German Economics Minister Robert Habeck said that the country’s gas inventories are rising. In that sense, he added that the nation will not have to pay the high prices currently demanded by the market.

gas storage facilities Germany they are nearly 83% full and will reach the 85% threshold in early September, according to Habeck.

However, great uncertainty remains. High energy prices for next year indicate that traders do not believe that the crisis will be contained in the coming months, according to Rønningen.

“It may well be that we have several winters where we have to somehow find solutions,” Shell Chief Executive Ben van Beurden said. at a press conference in Norway on Monday.

Uniper, Germany’s largest importer of natural gas, said on Monday that would need more help from the government and requested an additional 4 billion euros ($4 billion). The company explained that it is short on cash due to shortfalls in Russian exports, forcing it to pay sky-high market prices to fill gaps in supply.