Europe's Energy Crisis Just Got Even Worse

Europe's energy crisis got even worse on Monday after France declared severe nuclear outages and prices continued to balloon above €300 per megawatt hour (MWh) in almost every country on the continent.

The crisis comes as much of Europe is bracing for sub-zero temperatures this winter, including in several capitals this week.

In France, the electricity price stood at €442.88 MWh on Monday, the highest amount in Europe and its highest price since 2009, according to Energy Live. The energy price in France spiked by 15.9 percent in the last day, according to the website.

Austria is second most expensive for electricity, with €434.34 per MWh, followed by Belgium with €432.99. Poland, whose electricity price was much lower than many other countries, saw its price spike by 110 percent in the last day to €344.56 per MWh.

France's biggest electricity supplier EDF last week said that it had found faults on pipes in a safety system at its nuclear power station in Civaux, in the west of the country. The company said that due to the discovery, an outage at that plant will last longer than expected.

EDF added it would also stop its plant in Chooz, in eastern France, because it uses the same kind of reactors. The plant closures will result in a loss of 1 Terawatt-hour by the end of 2021, the electricity company said.

Europe's electricity grids are already struggling with low wind speeds, meaning that wind turbines aren't able to produce as much power.

On top of this, Russia has been reducing its natural gas flows to the continent, in an attempt to get the 759-mile Nord Stream 2 pipeline between Russia and Germany approved.

Inflation and supply chain issues caused by the pandemic saw energy prices soar this year, with European gas surging 600 percent, Bloomberg reported.

The region's benchmark gas contract increased by 8.8 percent on Monday. German year-ahead power, a European benchmark, rose as much as 3.1 percent to a record high of €250 per MWh, according to Bloomberg.

Short-term electricity prices also spiked. The European Central Bank is projecting 3.2 percent inflation for 2022, with two thirds of that increase attributed to energy price gains, the newswire reported.

Analysts have warned that a potential conflict between Russia and Ukraine could raise prices further. Moscow has massed around 120,000 troops at the Ukrainian border, which U.S. officials fear will lead to the invasion of Ukraine early next year.

Europe is also planning to transition to a low carbon economy to meet the demands of the 2021 Glasgow Climate Agreement. But renewable energy sources such as wind and solar can be less reliable than fossil fuels, which may present some hiccups when transitioning the economy.

Berlin electricity towers
View of high voltage transmission towers (electricity pylones) just outside Berlin's city limits taken on December 3, 2021. Europe’s energy crisis got even worse on Monday after France declared severe nuclear outages and prices continued to balloon above €300 per MWh in almost every country on the continent. John Macdougall