(Bloomberg) -- Power prices in Europe surged on fears that Germany may soon start to limit gas-fired generation and concerns about limited availability of Electricite de France SA’s nuclear fleet.
The German parliament will vote on legislation on Thursday allowing the government to curtail generation from gas plants not deemed to be essential for security of supply to conserve fuel. EDF warned this week that it may have to reduce output at some of its French nuclear reactors during the summer as a drought reduces the amount of river water available for cooling.
“Some upside for German winter contracts today could come from this looming legislation,” said Sabrina Kernbichler, a power analyst at S&P Global Commodity Insights. “Ongoing concern over French nuclear availability in the coming months spurring a strong upside risk premium for winter contracts in France and surrounding markets.”
German power, the European benchmark, rose to a record 337 euros ($343.25) a megawatt-hour while French prices were near an all time high at 398 euros on the European Energy Exchange AG.
The latest surge adds to the pressure on utilities and industries that increasingly are turning to governments for financial support to be able to continue supplying customers. It may also add to inflation that’s already causing Europeans to pay more for staples like food and petrol.
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