Wind and Solar Lull Sends European Power Prices to 2022 Highs

Wind and solar output in the UK, Germany and France fell on Monday and was expected to remain below normal until at least midweek. Wind speeds were forecast to drop especially sharply in Germany, the UK, Belgium and the Netherlands. With less renewable power available, natural gas-fired plants—using gas that is at its most expensive level in Europe in four years—were expected to set prices more often.

French day-ahead electricity settled at $374 (334 euros) per megawatt-hour on Monday in an Epex Spot auction, the highest since December 2022, according to data compiled by Bloomberg. Germany’s day-ahead price settled at $386 (345.64 euros) per MWh, with some evening peak slots rising above $672 (600 euros) per MWh.

In the UK, the National Energy System Operator issued a routine margin notice on Sunday warning of tight supply on Monday morning local time. It canceled the notice on Monday morning. The warning followed a weekend dip in wind generation.

Nordic power prices are also facing upward pressure from low hydropower reservoir levels and rising natural gas prices as winter approaches, energy trader Mind Energy said. In its November recap, the Denmark-based company wrote: “Winter is upon us, and panic is evident across the European energy markets, which had clearly underestimated the seriousness of the situation earlier in the year.”

Mind Energy analysts said October’s surge in European gas prices, combined with “severe hydrological pressure on the Nordics ahead of winter,” could drive electricity prices higher in the coming months.