PARIS: Europe’s electricity system is under mounting pressure from an intense heat wave, with extreme swings in power prices as soaring temperatures drive up demand and curb output.
Sweltering households and businesses are ramping up the use of air-conditioning, prompting a rare warning of insufficient power supply from the network operator in United Kingdom.
Meanwhile in France, several nuclear reactors are unable to operate at full capacity, while wind power generation is weak across much of Europe as the high pressure system stills air currents. Record-breaking temperatures have also caused grid equipment to fail.
The disruption underscores the scale of the challenge faced by the energy system in the world’s fastest-warming continent.
European utilities will have to make sizeable infrastructure investments, not only to transition to low-carbon sources of power, but also to make their networks more resilient to the deleterious effects of extreme temperatures.
Average electricity prices in Germany and the United Kingdom this month are on track for their highest June level since the 2022 energy crisis.
In France, the cost of electricity is heading for the highest June average since 2023, according to Epex Spot data.
High power prices do not necessarily indicate lack of supply. Rather, they signal that the power system is becoming tighter and give an incentive to bring more expensive sources of electricity online.
In France and Germany, costlier fossil-fuel power plants have been playing a larger role since the heat wave began.
These countries have seen increasingly sharp evening price spikes as cooling demand rises and solar generation fades.
On Wednesday, German intraday power prices are set to reach a maximum at 898.21 per megawatt-hour at 8.45pm local time, while French prices are expected to reach a high of 639.26 per megawatt-hour at 815pm, according to Epex Spot data.
Intraday power prices were trading above day-ahead levels, suggesting the market has tightened since Tuesday.
In the United Kingdom, grid operator National Energy System Operator issued a rare summer electricity margin notice for Wednesday evening, warning of a potential supply shortfall of 1.4GW and asking generators to make any additional capacity available.
UK intraday prices for yesterday were trading as high as £407.71 a megawatt-hour, compared with about £87 earlier.
In France, several nuclear reactors are not operating at full capacity because warmer river water limits cooling operations in order to protect the waterways’ ecosystems.
Golfech 2 is offline, Nogent 2 and Bugey 3 are running at a reduced level, and reactors at Blayais and Saint-Alban may have to cut output later for potential heat-related restrictions, according to Électricité de France.
In Switzerland, the Beznau nuclear power plant has also reduced output until yesterday due to high water temperatures in the Aare river, operator Axpo said.
Small outages have been reported at Germany’s Niehl 3 gas-fired power plant, which has reduced output.
It’s possible that other gas-fired units are facing similar constraints, as high outdoor temperatures can force such plants to reduce output during the hottest hours of the day, said Sabrina Kernbichler, an analyst at Energy Aspects Ltd.
In the United Kingdom, gas plants saw a 40% rise in unplanned outages due to temperatures on Tuesday compared to the day before, Lydia Davies, a consultant at LCP Delta, said.
Overall, the tightness in Central European power markets during this heat wave is more due to the sharp increase in demand for air conditioning than supply curbs, Kernbichler said.
Heat can also affect electricity grids, reducing their efficiency and limiting the amount of power that transmission lines are able to carry.
French grid operator Réseau de Transport d’Électricité is prepared to respond to the heat wave, including by reducing power on overhead lines that can sag as they heat up and risk getting too close to the ground, its chairwoman Emilie Piette said.
In Brittany, France, about 68,000 homes were deprived of power after two transformers went out of order due to a blast likely tied to extreme temperatures. — Bloomberg
