European Power Prices Rise Amid Uncertainty

European Power Prices Rise Amid Uncertainty

European power curve prices rose on Tuesday amid uncertainty about Russian gas supplies. The latest price hike comes after news Germany is set to make amendments to energy law that would authorize the government to buy stakes from energy companies under cost pressure. The Dutch TTF gas price continues its upside trajectory with future hikes likely.

German government’s draft bill that would allow it to buy stakes in energy companies struggling with gas import prices emerged yesterday.

The government aims to prevent market damage as companies are stranded between expensive spot gas and under-supply from inexpensive long-term contracts that are not being met by Moscow amid economic confrontations caused by Russia’s invasion of Ukraine and subsequent Western sanctions.

German energy company Uniper confirmed that selling stakes to the government is one of the options that is being discussed within the company.

German year-ahead baseload power was at €326 per megawatt hour (MWh) at 0815GMT on Tuesday, up 1.2% but below Monday’s contract high of €328. The equivalent French contract did not trade after closing on Monday at €392.

French monthly supply in September hit a record €425, up 2.4%.

Currently one of the biggest fears of the gas market is that gas flow disruptions from Nord Stream 1 may become long term even after the scheduled maintenance of July 11-21 is completed. Long-term disruptions would have massive spillover effects across economies.

Regulators are trying to ensure enough gas is bought for storage. They are also supervising the drawing up of priority lists for access to gas.

Flows of Russian gas via Nord Stream 1 and deliveries through Ukraine edged lower on Tuesday.

Spot power prices showed mixed trends. Germany’s fall thanks to increased wind supply, but France’s were up because of low reactor availability, just 47.9% of installed capacity.

German day-ahead baseload was down 5.1% at €304.5 and the equivalent French contract was up 6.7% at €400.

The EPEX SPOT bourse said it traded 49.9 terawatt hours in June, up from 47.2 terawatt hours a year earlier.

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