Electricity prices in key EU markets hit record highs

Price for electricity in two key EU markets saw enormous increases on Friday, forcing the bloc’s leaders to call an emergency meeting to discuss the power-supply crisis that keeps tightening its grip, Bloomberg reports.

On Friday, the French year-ahead contract soared about 25% to €1,130 per megawatt-hour on the European Energy Exchange. The German equivalent gained its way to a record as well, surging by as much as 33% to €995 per megawatt-hour, marking an increase of nearly 70% this week.

Prices for gas and electricity across the region started rallying last week after Russian state-run energy giant Gazprom announced plans to shut down the only operational turbine on the Nord Stream 1 pipeline due to maintenance works. Gas transit through the route will be entirely suspended from August 31 through September 2.

The surge is inevitably fueling inflation across the continent, putting the finances of households and businesses under growing threat. The latest news exacerbates both the risk of a recession and projected winter energy shortages in the region.

Since late July, the Nord Stream 1 gas pipeline has been used at 20% of its full capacity due to the shutdown of several gas turbines. One of them was sent to Montreal for repairs and became stuck there due to Canadian sanctions against Russia over the conflict in Ukraine. At Germany’s request, Ottawa announced an exemption for the turbines in July, and sent one of them over, but Gazprom declined delivery, citing irregularities in documentation.

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