Electricity prices in Europe continue to rise steadily
Electricity prices in Europe continued their steady rise on Wednesday, further increasing pressure on the continent’s industry, Investing.com reported.
Daily electricity prices rose to €563.76/MWh in Germany and €553.62/MWh in France, according to exchange operator Nord Pool, as natural gas shortages and low levels of rivers continue to hamper producers.
Futures for next year do not indicate an easing of pressure anytime soon. Reference capacity for Germany in 2023 rose to 513.5 EUR/MWh on the European Energy Exchange and remained at 676 EUR/MWh for France, two multiples of pre-war levels in Ukraine .
The energy crisis is having an increasingly significant impact on industrial production in the region.
Earlier on Wednesday, Norwegian energy and metals group Norsk Hydro (OL:NHY) said it would suspend primary aluminum smelting at its Slovalco plant in Slovakia due to high energy costs. Processing operations will continue, but the plant, which was already operating at only 60% of its annual capacity of 175,000 tonnes, will only reopen if market and management conditions allow it.
The news comes a day after Belgian company Nyrstar announced it would include its Budel zinc plant in the Netherlands in a care and maintenance program from September, citing similar cost pressures.
Electricity prices in Europe fell briefly on Tuesday after the Wall Street Journal reported that Berlin plans to allow Germany’s last three nuclear power plants to continue operating after scheduled outages at the end of the year. However, they quickly recovered after the Ministry of Economy denied publication.
More bad news came when Uniper (ETR:UN01), a German gas importer and distributor, reported a first-half loss of 12.4 billion euros as the company was forced to buy gas in the spot market at above-average prices.
These developments were overshadowed by more promising news regarding deliveries from Germany this week. Economy Minister Robert Habeck said on Tuesday that two floating regasification units for the North Sea ports of Brunsbüttel and Wilhelmshaven will be operational in early 2023, significantly boosting Germany’s ability to receive liquefied natural gas. . This will give Europe’s biggest economy a bigger margin of safety if, as many expect, Russia completely cuts gas supplies in winter.
Germany has also made better than expected progress in filling its gas storage facilities ahead of the winter heating season. The Bundesnetzagentur, which oversees the country’s energy networks, said German gas storage facilities were 77.3% full last week, matching their multi-year average, although Russia is currently sending just 20 % of its contractual volumes.