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Bloomberg
Europe is bracing for energy shortages as freezing weather sets in, boosting demand and sending prices surging at a time when supply just can’t keep up.
Temperatures are forecast to fall below zero degrees Celsius in several European capitals, straining electricity grids already coping with low wind speeds and severe nuclear outages in France. To make matters worse, Russia is limiting natural gas flows through a major transit route to Germany on Monday after capping supplies over the weekend. The route is set to be only partially used in January.
Energy prices have spiraled this year, with European gas surging some 600%. The region’s benchmark gas contract climbed as much as 8.8%, while German year-ahead power, a benchmark in Europe, rose as much as 3.1% to a new record of 250 euros ($282) a megawatt-hour.
Short-term electricity also jumped, along with the cost of using dirtier energy sources in Europe. In France, day-ahead power rallied to 442.88 euros per megawatt-hour, the highest since 2009, in an auction. The German contract also soared to the highest on record.