Electricity prices across Europe have surged to their highest levels in years as a regional heatwave has simultaneously increased demand for cooling while constraining power generation capacity. Great Britain’s grid operator paid approximately £470 per megawatt-hour to import electricity from continental Europe during peak evening hours on Tuesday, a dramatic increase from the average price of £71 per megawatt-hour recorded in June of the previous year and more than triple the rate from the preceding day.
The price spike reflects a supply-demand imbalance driven by multiple factors. High-pressure weather systems have reduced wind speeds across Europe, diminishing output from wind farms and limiting a key renewable energy source. In France, elevated river water temperatures have constrained nuclear plant cooling capabilities, reducing reactor output. Germany’s electricity market experienced price forecasts exceeding €545 per megawatt-hour on Tuesday evening, marking its highest point since June 2024, while France’s power market price climbed above €268 per megawatt-hour, the highest since August 2023.
On the generation side, the heatwave has triggered multiple unplanned outages at gas-fired plants across Great Britain. Five facilities reported the need to reduce output due to ambient temperature conditions, removing approximately 2.5 gigawatts from the UK’s gas generation capacity—equivalent to electricity powering 2.5 million homes and representing a 40 percent reduction compared to pre-heatwave levels. Wind power output fell sharply, accounting for 13 to 15 percent of UK electricity generation on Tuesday compared to a historical June average of 30 percent. Solar generation remained relatively stable at approximately 14 gigawatts, or 35 percent of total UK output, as clear skies compensated for typical efficiency losses at high panel temperatures.
To manage the strain on the electricity system, Britain’s energy operator secured approximately 1.5 additional gigawatts of imported power and activated a demand-reduction program offering payments to consumers who cut their electricity use during peak hours, targeting savings of about 115 megawatts. A National Energy System Operator spokesperson characterized the balancing measures as routine operational procedures, noting that while hot weather has affected market prices across Great Britain and Europe, such actions represent standard grid management.
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