Leaders.com
  • Login
  • Subscribe
  • Business
  • Leadership
  • Wealth
  • Master Classes
  • Business
    • Entrepreneurs
    • Executives
    • Marketing and Sales
    • Social Media
    • Innovation
    • Women in Business
  • Leadership
    • Personal Growth
    • Company Culture
    • Public Speaking
    • Productivity
    • Hiring
    • Social Issues
    • Leaders
  • Wealth
    • Investing
    • Cryptocurrency
    • Retirement
    • Venture Capital
    • Loans and Borrowing
    • Taxes
    • Markets
    • Real Estate
  • Master Classes
  • Login
  • Subscribe
Business European Energy Prices

London protesters reacting to energy price increases (Photo by Rob Pinney/Getty Images)

By Tyler Hummel Leaders Staff

Tyler Hummel

Tyler Hummel

Tyler Hummel is a news writer for Leaders Media. He was the Fall 2021 College Fix Fellow and Health Care...

Full bio


Learn about our editorial policy

Aug 26, 2022

European Energy Soars to Record Highs 

European energy prices continue to skyrocket with no end in sight. 

Key details
Energy prices are spiking across Europe in response to the continued effects of the Russian war in Ukraine. Volatile electricity prices are becoming worse due to the Russians threatening energy supplies. Prices have continued to skyrocket for the past six weeks and are placing Europe in a dangerous position for the winter. 

“Energy traders in Europe are witnessing price increases that are hard to fathom. Natural gas, which is used to generate electricity and heat, now costs about 10 times more than it did a year ago. Electricity prices, tied to the price of gas, are also several times higher than what used to be considered normal,” says The New York Times. 

Just today, energy prices exceeded 1,000 euros per megawatt-hour in France.

“The French year-ahead contract rose as much as 25% to 1,130 euros a megawatt-hour on the European Energy Exchange AG Friday. The German equivalent also gained to a record, rising as much as 33% to 995 euros a megawatt-hour for a gain of about 70% this week. In oil market terms, it’s the equivalent of over $1,600 a barrel,” says Bloomberg. 

Why it’s important
Europeans are facing the prospect of running out of gas in the coming months. The shortages of gas, natural gas, and other energy sources are threatening the possibility of mass outages during the winter and threaten lives. Europe imports a third of its natural gas from Russia. 

“Natural gas is the driver for the European electricity price,” says former Centrica CEO Iain Conn. 

“Russia has slashed gas flows to Germany and other countries. Even before the coming three-day shutdown, Nord Stream 1, a key conduit of fuel to Germany, has been flowing at only 20 percent of capacity. These cutbacks are forcing gas providers to buy gas on the spot market at higher and volatile prices than under longer-term Gazprom contracts,” says NYT. 

Multiple E.U. countries are rushing to important gas and natural gas from other countries, including the United States, the curb the possibility of having energy totally cut off from Russia. U.K. utility officials are warning that conditions are going to get “much much worse before they get better.”  

Some analysts are pushing for an increase in wind and solar power but it is “unlikely, though, that fundamental changes can be pushed through in time to help this winter,” as NYT notes. 

Surprising statistics

  • British electricity hit a record average of £500 pounds per megawatt-hour, five times what it was last August, as of Thursday
  • British regulators nearly doubled the price cap of electricity and gas to £3,500 a year for a typical home, as of Thursday
  • Day-ahead Italian electricity prices increased last week by 17% to 718.71 euros per megawatt-hour

Notable quote
“Analysts say that so far [wind and solar power] technologies are helping only marginally to lower prices because in wholesale electricity markets natural gas remains the key determinant in power prices. Chris Matson of LCP estimated that in 2021 Britain’s power prices were determined by gas more than 90 percent of the time, even though the fuel accounted for only about 40 percent of total generation,” says The New York Times. 

Home / News / European Energy Soars to Record Highs 
Share
FacebookTweetEmailLinkedIn

Related Stories

FTX Asks For Donations Back

by Savannah Young Leaders Staff
Cryptocurrency

5 hours ago

Former FTX CEO Sam Bankman-Fried was the Democrat Party’s second-largest donor and now the company is asking for donations back

Bankrupt crypto exchange FTX is sending requests, seeking the return of political donations.

Key Details

  • Former FTX CEO Sam Bankman-Fried and FTX Digital Markets Co-CEO Ryan Salame were major political donors during the last election. Now, the company is asking for the money back.
  • Bankman-Fried was the Democrat Party’s second-largest donor with $37 million in donations, while Salame was the Republican Party’s 10th-largest donor with around $19 million in donations.
  • FTX faced a very public bankruptcy filing and is now contacting "political figures, political action funds, and other recipients of contributions or other payments” to take back donations.

Go deeper

FacebookTweetEmailLinkedIn

Washington’s Crypto Crackdown

by Savannah Young Leaders Staff
Cryptocurrency

5 hours ago

After continued downfalls in the cryptocurrency sector, policymakers in Washington, D.C., have turned hostile on crypto, and many fear an oncoming crypto crackdown

After continued downfalls in the cryptocurrency sector, policymakers in Washington, D.C., have turned hostile on crypto, and many fear an oncoming crypto crackdown.

Key Details

  • Cryptocurrencies are very volatile, and between the major falls of different coins last summer and the downfall of FTX, policymakers have turned hostile on crypto.
  • The White House has been declining many different businesses associated with cryptocurrencies suggesting that a crypto crackdown could soon be on the way.
  • The crypto-friendly bank Custodia was denied its request to join the Federal Bank after the company believed it would be accepted. The Fed also warned banks that they will need permission to do anything crypto-related.

Go deeper

FacebookTweetEmailLinkedIn

More EVs Qualify For Credit

by Hannah Bryan Leaders Staff
Public Policy

5 hours ago

EV tax

More crossover SUVs will qualify for the electric vehicle (EV) tax credit after an announcement from the Biden administration.

Key Details

  • General Motors and Stellantis officials have been lobbying for changes to the EV tax credit issued last year. 
  • While the tax credit was intended to incentivize EV purchases, many popular EV models were excluded from the legislation. 
  • This change came about by redefining what vehicles are considered sport-utility. 
  • The Inflation Reduction Act initially provided a tax credit to SUVs priced above $80,000. Passenger-car customers did not receive a credit if the vehicle cost less than $55,0000. 
  • The change is retroactive to January 1, allowing buyers who already made a purchase to claim the credit.

Go deeper

FacebookTweetEmailLinkedIn
surveillance
Company Culture

6 hours ago

Employee Surveillance Hurts Employers

by Hannah Bryan Leaders Staff
Federal incentives are helping push people to buy electric vehicles (EVs) and boosting battery production in the U.S.
Business

6 hours ago

The U.S. Encourages EV Battery Production

by Savannah Young Leaders Staff
Wood
Markets

6 hours ago

More Predictions From Cathie Wood 

by Tyler Hummel Leaders Staff

Recent Articles

Entrepreneurs

14 hours ago

Here’s a Step by Step Guide on How to Start a Podcast

Eliminate confusion, create a podcast in 15 detailed steps

Wealth

Feb 3, 2023

The Most Landlord-Friendly States in 2023

Invest in landlord-friendly states to make more profits

Productivity

Feb 2, 2023

7 Tips to Stop Procrastinating and Eat the Frog for Enhanced Productivity

Get more done using this mental methodology

  • Business
  • Leadership
  • Wealth
Join the Leaders Community

Get exclusive tools and resources you need to grow as a leader and scale a purpose-driven business.

Subscribing indicates your consent to our Terms & Conditions and Privacy Policy

Leaders.com
  • Privacy Policy
  • About
  • Careers
  • Cookie Policy
  • Terms
  • Disclosures
  • Editorial Policy
  • Member Login

© 2023 Leaders.com - All rights reserved.

Search Leaders.com