Electricity prices soar in Germany

European gas and power prices surged as panic over Russian supplies gripped markets and politicians warned citizens to brace for a tough winter ahead, Report informs, citing Bloomberg.

Benchmark gas settled at a record high, while German power surged to above 700 euros ($696) a megawatt-hour for the first time. Russia said it will stop its key Nord Stream gas pipeline for three days of repairs on Aug. 31, again raising concerns it won’t return after the work. Europe has been on tenterhooks about shipments through the link for weeks, with flows resuming only at very low levels after it was shut for works last month.

“The catastrophe is already there,” Thierry Bros, a professor in international energy at Sciences Po in Paris, said. “I think the major question is when EU leaders are going to wake up.”

Germany’s dependence on Russian gas leaves it vulnerable as it desperately searches for alternative supplies. The nation is considering restarting coal-fired power plants and may extend the life of remaining nuclear power plants, while urging gas conservation. Industries in Europe’s biggest economy are already take a major hit.

Benchmark German year-ahead power rose 14% after earlier hitting a record 710 euros per megawatt-hour, while the French contract closed 10% higher to 801 euros. Coal futures also reached unprecedented levels. The near-term electricity market’s tightness is being compounded by nuclear reactor availability in France at near the lowest in years.

Over the weekend, German leaders said the country may struggle to replace dwindling gas supplies from Russia. The government is targeting a 20% reduction in consumption. While the country is one of the worst hit by Moscow’s cuts with the economy on the bring of a recession, the energy crisis has reverberated through the continent.