European Power Prices Top €600 at Peak as Winds Ease
Key Facts
Some evening peak electricity prices in Europe topped €600 per megawatt hour on Monday, November 9, as wind generation fell, according to Bloomberg. In Britain, the National Energy System Operator issued a notice of an expected shortfall of about 1,400 megawatts in the supply margin between 6 a.m. and 11 a.m. The notice came amid forecasts for lower wind generation in Europe, after weak winds curbed renewable energy output across the continent late the previous week, according to The Guardian. But the British estimate changed during the morning as supply forecasts were updated. A spokesperson for the operator said the notice was a routine precautionary measure. The spokesperson added that "Electricity supplies to customers are secure, there is no risk of interruption, and customers do not need to take any action."
A review before dawn narrowed the expected British shortfall to 500 megawatts, and the operator said at the time that no additional reserve power was needed. The shortfall estimate later fell to 200 megawatts, before the notice was canceled shortly after 9 a.m. The changes show that the alert concerned the projected supply margin during a specific window, while the calculated need declined as estimates were updated. The operator stressed that the measure did not mean it expected customer power cuts. Britain was expected to export electricity to Europe when the supply margin notice was issued, according to The Guardian. The British margin pressure therefore coincided with an expected flow of electricity in the opposite direction through European interconnectors.
In the day-ahead market, the French price for Monday settled at €334.12 per megawatt hour, while its German counterpart reached €345.64, according to Bloomberg. Some evening periods in Germany recorded more than €600 per megawatt hour, distinguishing peak-hour prices from the day-ahead settlement average. The French price was the highest since December 2022, according to the report. December contracts in Germany and France were trading near €200 per megawatt hour, more than double their level a year earlier. These prices reflect a divergence between day-ahead settlements and futures contracts on one hand, and spikes during specific evening periods on the other. Bloomberg linked the rise in peak-period prices to lower wind generation.
An independent energy consultant quoted by The Guardian pointed to the cost of running alternative supplies in Britain on Friday, November 6. She said electricity imported through high-voltage undersea cables cost £2,500 per megawatt hour, compared with £1,000 to run gas-fired plants. These figures highlight the costs that may accompany reliance on imports or running gas-fired plants when supply is tight. On the day the notice was issued, Britain was expected to export electricity to Europe, according to the same report. This context comes as the availability of renewable electricity is affected by weaker wind speeds. The source does not link these earlier prices to Monday’s day-ahead market settlement.
Bloomberg forecast that wind and solar generation would remain low in northwestern and central Europe through Wednesday. It also said temperatures during the week would be about 1 to 3 degrees Celsius below normal. In the United Kingdom, the Bank of England listed a speech by its Governor Andrew Bailey in Zurich at 5:25 p.m. GMT on November 9. The Office for National Statistics set November 12 as the release date for its monthly estimate of gross domestic product. The two dates are part of the published calendar of events and data, with no official link between the GDP release and energy costs. The projected generation trends through Wednesday leave wind and solar conditions among the factors electricity markets are watching this week.