Europe’s heatwave drives electricity prices to new highs as demand soars

A severe heatwave across Europe has driven electricity prices to multi-year highs as soaring demand for cooling collides with falling generation from wind, nuclear, and gas plants, forcing Great Britain to pay sharply elevated rates for continental imports. Great Britain’s energy system operator paid about £470 per megawatt-hour to secure electricity imports from the continent during Tuesday’s peak evening hours, more than six times the average market price of £71/MWh in June last year [1]. The market price on Monday had been £123/MWh [1]. In Germany, power prices were forecast to exceed €545/MWh on Tuesday evening, the highest since June 2024, according to the Epex Spot exchange [1]. France’s power price climbed above €268/MWh, its highest level since August 2023 [1]. The heatwave has slowed wind speeds across the continent and forced some French nuclear plants to reduce output because high river-water temperatures make reactor cooling more difficult [1]. In Great Britain, five gas plants reported unplanned output cuts due to ambient conditions, removing about 2.5 gigawatts from the grid — enough to power roughly 2.5 million UK homes [1]. Shivam Malhotra, head of power trading at LCP Delta, said the lost gas capacity was about 40% higher than before the heatwave and noted that gas plants “tend to really struggle in extreme temperatures” [1]. Solar generation held steady at about 14GW, or 35% of total UK generation, as clear skies offset the efficiency losses that high panel temperatures normally cause [1]. Wind output, however, fell to between 13% and 15% of the electricity mix, compared with an average of around 30% in June last year [1]. The system operator secured roughly 1.5 gigawatts of extra electricity to help meet the evening peak, which Malhotra said was likely to come from the continent despite its own heatwave-related problems [1]. Households also contributed by cutting demand through a scheme that saved about 115 megawatts during peak hours [1]. A spokesperson for the National Energy System Operator called the balancing actions routine [1]. The episode echoes dynamics seen during the 2021–2023 global energy crisis, when extreme weather and supply constraints produced sharp regional price spikes [3]. The growing share of variable renewable sources such as wind and solar — which accounted for over 30% of global electricity generation in 2024 — can leave systems more exposed during prolonged weather events that suppress output [4].