16 augustus 2022

This is why the energy prices are still increasing

The energy prices are still increasing due to the ongoing commotion in the energy market, this is mainly because of the reductions in supply from Russia. However, there are a couple of other reasons why the prices are high. We list them in this blog.

Klik hier voor de Nederlandse versie.

Persistent drought

You cannot ignore it: almost all of Europe experiences extremely hot weather and persistent heat this summer. According to the European Drought Observatory, 47% of the total EU surface is affected by extreme drought and 17% is in a critical situation. This is causing water shortages across the continent, which also endangers energy production. How? We’ll explain below.

Less energy from Scandinavia

In Norway, for example, almost all electricity is generated using hydropower, but due to the persistent drought, the water levels in the water reservoirs are way lower than usual during this time of year. Therefore less electricity is generated with hydropower. Norway usually exports their electricity to Europe, they are now working on a plan to potentially limit the exports. As a result of this, other European countries have to look for alternatives to meet their energy needs, causing the energy prices in Europe to skyrocket.

Low water level

Another consequence of the ongoing drought is the low water level of rivers, including the Rhine. The Rhine water level has never been this low, impacting the economy since the Rhine is one of the most important rivers in Europe when it comes to transport. Due to the low water level, ships can transport way less cargo as usual and therefore more ships are needed for the same amount of cargo. This also applies to the delivery of coal. In Germany - which mainly focuses on burning coal to get rid of Russian gas - up to 50% less coal gets transported over the rivers. At Vandebron we prefer to see as little coal burned as possible but the high demand for it and the difficulty to transport do cause a further increase in the energy prices.

Power plants in France

France is highly dependent on energy generated by their nuclear power plants, but they have been experiencing a lot of problems with their power plants lately. Out of 56, 29 power plants have already been paused due to maintenance, but also because of the persistent heat. The heat is causing an increase in the temperature of the river which is normally used to cool down the nuclear reactors, the water temperature is currently way too hot. Due to the shutdown of so many power plants, France is forced to import more energy than it can export, which also has an affect on the European energy market and prices. 

Commotion on the energy market

The above points in combination with the conflict between Russia and Europe ensure that the commotion on the energy market continues. Doubts arise as to whether Europe will succeed in saving enough gas to survive the coming winter, and this is reflected in the rising energy prices.

To tackle this crisis, now and in the future, we need everyone. The government, companies and individuals. Doing so, we must look for solutions that will help us in the long term. The fact that extra coal is now being burned to make up for the gas shortage is not going to help us achieve our long-term climate goals. So let’s do everything we can to reduce our energy consumption and focus on the transition towards 100% green energy.

Geschreven door Margo van Gils

Margo is brand marketeer bij Vandebron en enthousiasmeert anderen graag over de energietransitie.

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