European energy prices plunged on Tuesday after signs the region stepped up efforts to mitigate an energy crisis that could plunge the region into recession as winter approaches. Bloomberg reported that wholesale electricity prices for the German market, which is important to Europe, fell by up to 26% next year and Dutch gas by 11%.
On Monday, German electricity prices exceeded €1,000 (about 24,600 crowns) per megawatt hour for the first time.
Prices are very volatile these days due to low trading volume and a lot of uncertainty in the market. Russia’s Gazprom will close its Nordstream gas pipeline to Germany for three days starting August 31 for maintenance.
Electricity prices on the German market climbed to a record €1,050/MWh on Monday. According to Bloomberg, he was down as much as 26% this morning, but has since erased some of the losses, and an hour earlier at noon he was trading at €610 per MWh.
The decline was also tempered by gasoline prices. The price of his September delivery major gas futures contract at the Dutch Title Transfer Facility (TTF) virtual trading hub was down 7.6% at midday to around €252 per MWh. Last week, the price rose to a new record.
The EU will intervene in the short term to ease rising electricity prices that are fueling inflation and raising the risk of recession. Gas storage in the region is also filling up quickly, providing a sense of security and increasing the odds that Europe will have enough gas for the winter.
European Commission President Ursula von der Leyen said on Monday that the EU was trying to find ways to cut the link between gas and electricity prices. She also added that unions must urgently take steps to resolve skyrocketing prices.
According to Czech Minister of Industry and Trade Jozef Síkela, unions must separate gas prices from electricity prices. Sikera, on behalf of the country presiding over the EU Council, convened an extraordinary meeting of ministers responsible for energy on 9 September. Proposals for determining the cap on gas prices will be discussed.
El País newspaper reported today that Spain will propose extending the electricity price cap across the EU at the EU energy ministers’ meeting on September 9. The system, which has been in place in Spain and neighboring Portugal since mid-July, has led to a slowdown in end-consumer price increases, according to initial results. Spanish Minister Teresa Riverova also wants to propose limiting the price of emissions permits.
