Danish Electricity Prices Set Another 'Extreme' Record as Unprecedented Hot Spell Pummels Europe

Skyrocketing energy prices, coupled with rising inflation across Europe have contributed to a cost-of-living crisis, putting a strain on people's wallets. The crisis has been ascribed to a combination of self-crippling sanctions imposed by the EU against Russia over the conflict in Ukraine and an unmatched drought.

Electricity prices across Denmark have set yet another record within the span of several weeks, reaching the highest level in the 12 years, the period for which the state-owned company Energinet has available data.

This week, the average consumer price at the Nordic electricity exchange Nord Pool reached DKK 7.5 ($1.01) per kilowatt-hour.

“Right now we have to describe the price levels as downright extreme,” Ole Sloth Hansen, the head of commodity strategy at Saxo Bank, said, as quoted by TV2.

If the prices remain high, it will levy a heavy toll on the vast majority of Danish homes, according to Louise Aggerstrøm, private economist and chief analyst at Danske Bank. She stressed that for a family with children, it may inflate the electricity bill by thousands of kroner per month, and warned of unusually high heating bills during the coming winter.

Jim Vilsson, senior economist at Danish power operator Energinet, called on his fellow Danes to “change our attitude to how we use electricity,” forecasting continued high prices.

The prolonged period of record-high prices has been pinned on a “perfect storm” of unfortunate circumstances in the energy market. The soaring gas prices as a result of the EU's punitive sanctions over Russia's special operation in Ukraine, which the West calls an “invasion,” have in recent weeks been overshadowed by the unequaled drought that hit entire Europe and has been described as “possibly the worst in 500 years.”

Because of the drought, water levels in major European rivers and reservoirs have dropped, causing major problems for the transportation of oil and coal along the important waterways, hampering hydropower generation and pushing prices further up.

Lastly, several large nuclear power plants in France are out of operation due to maintenance.

Ole Sloth Hansen of Saxo Bank called the energy situation “historically uncertain,” predicting “violent fluctuations in both gas and electricity prices” during the coming autumn.

Skyrocketing energy prices, coupled with rising inflation across the continent have contributed to a cost-of-living crisis, hitting Europeans in the wallet and prompting governments to warn of possible shutdowns and announce cost-cutting measures. Among others, London Mayor Sadiq Khan has issued a grim warning that millions of Brits won't be able to properly heat their apartments or buy enough food this coming winter.