Key facts
- European electricity prices have surged to multi-year highs due to a heatwave increasing demand for cooling.
- Power generation has decreased across the continent due to reduced wind speeds and issues with nuclear and gas plants.
- Great Britain's National Energy System Operator (Neso) issued a rare summer power supply warning, requesting an additional 1,900 megawatts of power generating capacity.
- Electricity prices in Great Britain have risen sharply, with import prices exceeding £470 per megawatt-hour, more than six times higher than last year.
- German power market prices are forecast to reach highs not seen since June 2024, and French power market prices have climbed to their highest level since August 2023.
- High river water temperatures are hindering the cooling of nuclear reactors in France, leading to lower output.
- Several British gas plants have reduced output due to high temperatures, impacting capacity.
Electricity prices across Europe have surged to multi-year highs as a severe heatwave drives up demand for cooling while simultaneously reducing power generation capacity. Record temperatures have prompted widespread use of air conditioners and electric fans, straining energy grids.
In Great Britain, the energy system operator has resorted to paying exceptionally high prices for electricity imports from the continent to meet peak demand. These prices, exceeding £470 per megawatt-hour, are more than six times higher than the average in June of the previous year. This situation is exacerbated by reduced wind speeds slowing down wind farms and causing outages at several gas plants that struggle in extreme heat. The loss of capacity from these gas plants is substantial, cutting power equivalent to millions of homes.
Across the continent, similar issues are affecting power generation. In France, high river water temperatures are hindering the cooling of nuclear reactors, leading to lower output. Germany's electricity market is also bracing for record-high prices, with forecasts exceeding €545 per megawatt-hour. The combination of increased demand and decreased supply has created a challenging energy market environment.
To help manage the strain, households in the UK are participating in a scheme to voluntarily reduce their energy consumption during peak hours, offering financial incentives for demand reduction. This measure aims to alleviate some of the pressure on the energy system operator.