In a crazy week for energy prices in Europe, wholesale electricity prices for 2023 in Germany and France broke new records on Friday at 850 euros and more than 1,000 euros per megawatt hour (MWh), respectively. A year ago, prices for these two countries were around 85 euros/MWh.
Several explanations
There are several reasons behind the explosion in prices, starting with the drying up of Russian gas flows to Europe since the start of the war in Ukraine: many thermal power stations use gas to generate electricity . As gas becomes more scarce, its price is also at record highs.
In France, only 24 of EDF’s 56 nuclear reactors are operating at the moment, in particular due to a corrosion problem, which is reducing French electricity production to a historically low level, and mechanically driving up prices.
For next December specifically, the megawatt hour of electricity is already trading at more than 1,600 euros, an extraordinary level.
The European Union and the Member States are in the process of putting in place energy saving and sobriety plans, knowing that with the approach of winter, the risk of shortages and power cuts increases.
