(Bloomberg) --

Well-below average temperatures across Europe saw daily power prices rise above 200 euros in most major markets for Monday, as the increased demand boost dependence on expensive fossil-fuel plants.

With temperatures in the north of Sweden dropping below -40 Celsius prices in the Nordic regions climbed to the second highest level on record 226.54 euros per megawatt-hour for Monday on Nord Pool. To shore up the balance in the grid, an oil-fired reserve plant was also started in Sweden. 

In Poland prices jumped 69% to 240.59 euros, highest levels since day-ahead auction for that market started on Nord Pool in February this year. Prices in Germany rose to 265.39 euros and in France to 282.50 euros, near the highs from earlier this autumn. 

With European carbon prices trading within 10 cents of record above 80 euros per ton reached last week, benchmark gas and coal prices elevated by low storage levels, generating power at fossil-fueled plants remains very expensive. It leaves power market exposed very high prices during spells of cold and windless weather. 

“European power prices are therefore expected to remain very high in December,” Andy Sommer, head of fundamental analysis & modeling at Axpo Solutions AG, said in emailed note. “Weather in the coming weeks, France’s nuclear plant performance, Russia’s daily gas deliveries and China’s coal policy, are all going to determine if prices rise even higher”

©2021 Bloomberg L.P.