Europe had never paid as much for electricity as in 2021

Europe I had never paid so much for electricity as in 2021.

The short-term average cost of energy soared to record levels this year, increasing more than 200% in Germany, France, Spain and the United Kingdom. In the Nordic region, where vast supplies of hydroelectric power tend to limit prices, costs increased by 470% over the previous year.

The crisis is leaving consumers and heavy industrial users with rising bills heading into 2022. Metal smelters from France to Spain have already been forced to halt production, while some fertilizer producers were forced to stop production completely. Norsk Hydro’s majority-owned plant in Slovakia was the latest victim, announcing on Thursday that it would slow production further.

And you don’t see that things will improve anytime soon. Even as the year ends with mild weather, easing demand for heat and energy, households will face dazzling price increases in the coming years when wholesale costs are passed on. Industries will also have to deal with even tighter supplies in January, when around 30% of the French nuclear fleet is offline.

This year, daily energy prices in Germany averaged € 96.85 per megawatt-hour, while costs in France were € 109.17, according to Bloomberg calculations based on daily auctions. Spanish users paid 111.93 euros, prices in the United Kingdom averaged 117.82 pounds, while costs in the Nordic region reached 62.31 euros.

Europe’s energy crisis is the result of a natural gas shortage just as demand recovered after the 2020 lockdowns. The crisis was also exacerbated by lower-than-normal wind speeds and nuclear power outages that have affected electricity grids, forcing energy companies in the region to burn polluting fossil fuels.

As companies burned coal, lignite, and even oil to keep the lights on, the cost of purchasing permits to pollute increased. Carbon futures, already facing price increases due to Brussels’ climate agenda, doubled this year to about 80 euros per metric ton (US $ 90.5), driving up the cost of electricity.