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Europe’s energy crisis is making the market nervous. And analysts expect record-high prices to persist

European power prices have spiraled to multi-year highs on a variety of factors in recent weeks, ranging from extremely strong commodity and carbon prices to low wind output.
What’s more, the record run in energy prices is not expected to end any time soon, with energy analysts warning market nervousness is likely to persist throughout winter.
Europe’s energy supply crunch is “making the market nervous as we approach winter,” Stefan Konstantinov, senior analyst at ICIS Energy, a commodity intelligence service, told CNBC.

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LONDON — European power prices have spiraled to multi-year highs on a variety of factors in recent weeks, ranging from extremely strong commodity and carbon prices to low wind output.

What’s more, the record run in energy prices is not expected to end any time soon, with energy analysts warning market nervousness is likely to persist throughout winter.

The October gas price at the Dutch TTF hub, a European benchmark, was seen to climb to a record high of 79 euros ($93.31) a megawatt-hour on Wednesday. The contract has risen more than 250% since January, according to Reuters, while benchmark power contracts in France and Germany have both doubled.

In the U.K., where electricity bills are now the most expensive in Europe, power prices have soared amid the country’s high dependence on gas and renewables to generate electricity.

British day-ahead electricity prices rose nearly 19% to reach 475 pounds ($656.5) on Wednesday, Reuters reported. The contract was already trading near record highs shortly after a fire at a U.K.-France power link cut electricity imports to Britain.

“By far the biggest factor is gas prices,” Glenn Rickson, head of European power analysis at S&P Global Platts Analytics, told CNBC via email.

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