'Natural Gas Supply Shortage' Cold Wave Forecasted in Europe This Week... Power Crisis Expected to Worsen

[Photo by AP Yonhap News]

[Asia Economy Reporter Park Byung-hee] Amid ongoing concerns over natural gas supply instability due to conflicts between the West and Russia, a severe cold wave is expected to exacerbate Europe's energy shortage this week.

Bloomberg reported on the 19th (local time) that temperatures in major European countries are expected to drop below freezing this week, which will cause natural gas demand to surge during an already tight supply period. To make matters worse, Russia announced it will limit the amount of natural gas supplied to Germany starting on the 20th.

European natural gas prices have risen about 600% since the beginning of this year. The Dutch TTF exchange, which serves as the benchmark for European natural gas prices, recorded an all-time high futures price for January 2023 delivery at 142.8 euros per megawatt-hour (MWh) on the 16th.

As natural gas prices, which account for the largest share of Europe's power generation, soar, electricity prices in major countries are reaching record highs.

On the 19th, electricity for next-day delivery in France traded on the European Power Exchange (EPEX Spot) hit 382.08 euros per MWh, the highest since 2009. The futures market anticipates further price increases. France's electricity prices for January 2023 and February 2023 were traded at 590.00 euros and 648.13 euros, respectively.

On the same exchange, Germany's next-day electricity price also reached 331.37 euros, marking the third-highest price ever recorded. On the Iberian Electricity Market (OMIE), Spain's wholesale electricity price hit a record high of 339.84 euros.

Jeremy Weir, CEO of commodity trading firm Trafigura, warned last month that "if a cold wave hits, blackouts could occur across Europe."

The French government has urged ?lectricit? de France (EDF) to expedite the restart of nuclear power plants. Barbara Pompili, France's Minister of Ecological Transition, stated on the 19th during an appearance on the public radio station Franceinfo that she met with EDF CEO Jean-Bernard L?vy on the 17th to request an earlier restart of nuclear reactors.

EDF operates 56 nuclear reactors, of which more than a quarter are currently offline for maintenance. Due to inadequate maintenance during the COVID-19 pandemic, the current maintenance rate is unusually high compared to this time of year in previous years. According to the original plan, EDF intended to restart the reactors around mid-next month.

Minister Pompili said that if nuclear reactors are restarted early and companies reduce electricity demand, France will avoid blackouts. She also revealed that the government has signed agreements with some companies to compensate them for production losses when they halt operations during peak electricity demand periods instead of continuing production.

This content was produced with the assistance of AI translation services.