(Bloomberg) -- Power prices across Europe soared as a slump in wind generation forces nations to fire up plants running on more expensive fossil fuels.
The Polish grid PSE triggered a so-called state of emergency for its power market on Wednesday. Much of northwest Europe is experiencing warmer-than-average temperatures, but a high-pressure system has resulted in a sharp dip in wind speeds, leading to tight energy supplies.
While Europe has pushed to rapidly expand its capacity to generate wind and solar power, it still relies on costly hydrocarbons as a back up. One of the region’s biggest challenges is to ensure that cheap, clean energy is available whenever it’s required.
German intraday power prices for peak times on Wednesday rose to the highest level in two months.
Slumping wind generation stoked demand for gas to produce electricity, supporting fuel prices earlier this week.
Some countries even tapped winter gas stocks to meet demand, with a net withdrawal from the European Union’s overall inventory exceeding 2 terawatt-hours on Monday, according to the most recent data from Gas Infrastructure Europe. That’s the biggest withdrawal since the start of this heating season, but is below normal winter levels as the weather is still mild.
German intraday power prices rose to as high as €763.23 per megawatt-hour at 5 p.m., the highest since Sept. 5, according to data from Epex Spot SE. Day-ahead contracts that settled yesterday saw peak prices rise to their highest since 2022.
Slumping wind generation in the UK means power generation from gas is at its highest level since November 2023, according to data from Elexon.
--With assistance from Elena Mazneva.
(Updates with Germany intraday power price)
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