“We have never had such high July prices for individual hours as now”, EON sales manager Emma Borgström said, as quoted by national broadcaster SVT.
There, it exceeded SEK 6 (56 cents) per kWh, as opposed to the usual July prices of around 40 öre (nearly 4 cents).
Swedish Energy Agency analyst Rebecka Bergholtz concurred that the prices are at “exceptionally high levels”.
There are several reasons behind the spike in electricity prices this summer, coupled with dramatic fluctuations, which makes it difficult to predict when the price will fall again, Rebecka Bergholtz said.
One reason is that Russia shut 1,220-kilometer-long Nord Stream 1 gas pipeline gas to Europe on Monday for upkeep. While this happens every year and usually takes up to a fortnight, European experts are left worried that Russia will not turn on the gas again. Previously, the Russian company Gazprom had to significantly reduce its Nord Stream 1 gas supplies due to delays in maintenance work on necessary turbines by German and Canadian companies. This forced Europeans to tap into gas volumes normally reserved for winter, with some countries even considering returning to coal production.
Overall, Europe has been suffering from skyrocketing gas prices over the past months, due to an unravelling fuel crisis sparked by massive sanctions against Russia. German authorities admitted that the national gas storage facilities are currently only 61 percent full, which is lower than usual for this season. Europe's largest economy only has gas stored to last two months if deliveries from Russia are halted.
Furthermore, gas flow from Norway, Europe's second-largest gas provider, is currently limited as well by unplanned maintenance work. In addition, the weather in Sweden has been calm for a few days, which has adversely affected the generation of wind power.
“There is great concern about what the natural gas supply in particular will look like in Europe in the future before and during the coming winter. This concern is likely to persist, even over the next season, which contributes to strong price reactions”, Rebecka Bergholtz explained.
To crown it all, Swedish and Finnish nuclear power plants are also entering maintenance season, which is currently affecting nuclear power production, Bergholtz explained. This trend has been mirrored by other major nuclear power producers, as maintenance on French nuclear plants, both planned and unplanned, is also pushing Europe's electricity prices upwards. Lastly, coal prices are also higher than usual, week, due to bans on coal from Russia and problems with shipments from Australia.
Austria's inflation rate this year will peak at 7.6%, hitting the record since the global oil crisis of 1970s, according to OeNB.
The Austrian Harmonized Index of Consumer Prices (HICP), which began climbing in 2021, has continued to grow in spring and accelerated to 8.7% in June, reaching the highest figure in more than 40 years.
According to the OeNB's inflation projection, the HICP annual rate will average 7.6% in 2022, but then decline to 5% in 2023 and to 3.2% in 2024.
The OeNB noted that it revised the forecast upward mainly owing to persistent increase of energy costs and food prices, as well as higher wage costs, stemming from accelerating inflation.
Eurozone inflation has been on the rise for months. Coupled with the disruption of supply chains due to hostilities in Ukraine, this spurred energy prices and caused shortages.
According to the Eurostat estimate published on July 1, the countries with the highest annual inflation in the euro area in June are Estonia (22%), Lithuania (20.5%), Latvia (19%), Slovakia (12.5%), and Greece (12%). Only two eurozone countries currently have a positive annual inflation trend, namely Germany and the Netherlands.
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