(Bloomberg) -- European power prices surged to the highest level since December after Germany took a step closer to rationing natural gas supplies amid cuts to flows from Russia.
Rising gas prices have been pushing up the cost of electricity across Europe, fueling inflation and increasing the economic burden on businesses and households still recovering from the pandemic.
Germany Takes Step Closer to Gas Rationing With Heightened Alert
German power for power for next year surged as much as 3.6% to 254 euros a megawatt hour on Thursday, the highest since Dec. 23, on the European Energy Exchange. The French equivalent gained 1.6% to 320 euros a megawatt hour, also reaching the most since December.
The increase in gas prices is also boosting demand for coal as a power source, a polluting alternative that could be increasingly called upon this winter if gas supplies remain disrupted. European coal futures rose as much as 4% to $270 a ton Thursday.
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