Belgium, the Netherlands, and Germany have reached record-high power prices due to the current heat wave in Europe and its implications, said energy market intelligence provider Montel, arguing that extremely high temperatures reduce the efficiency of solar panels and of CCGT power plants.

CCGT plants operate less efficiently at high temperatures, losing between 0.5% and 0.9% of their output for every additional degree Celsius.

The Norwegian company said that, according to exchange data, Belgium set a new all-time high for the quarter-hourly electricity price at €1,038.25 ($1,181.63)/MWh for the 15-minute time slot starting at 8:45 p.m. (CET). 

“The Netherlands also reached a new quarter-hour record price of €902.47/MWh, while the Danish bidding zone DK1 rose to €786.83/MWh. In Germany, Europe’s largest electricity market, quarter-hour prices also reached a record level of €747.10/MWh during the same evening period,” said Montel. 

Figures from the Montel EQ platform show that Germany’s residual load rose to 51.5 GW. The portion of electricity demand not covered by wind and solar power was approximately 10.4 GW above the typical level for this time of day and year.  

“As temperatures have risen, demand for air conditioning and cooling systems has increased significantly in parts of Europe. However, the sharpest price spikes occurred during the evening peak – at a time when solar power generation declines rapidly as sunlight fades, while temperatures and cooling demand remain high,” said Montel. “This combination led to periods of increasing scarcity and forced markets to rely on increasingly expensive generation sources to maintain the balance between supply and demand.”

According to the Swedish Meteorological and Hydrological Institute (SMHI), the current heat wave is expected to persist across large parts of Central and Western Europe into the first days of July.