Green energy policies in Europe designed to rapidly shift the continent away from fossil fuel dependence have contributed to soaring power prices in the region.
The European benchmark index measuring future electricity prices increased to a record $993 per megawatt hour (MWh) on Monday, days after prices in France and Germany surged 25%, according to European Energy Exchange data compiled by Bloomberg. By comparison, the average price of electricity in the U.S. hit $129 per MWh in June, federal data showed.
The energy crisis has forced consumers to cut back on power consumption, industrial production declines and energy rationing across the continent. The European Union Council (EU) scheduled an emergency meeting of EU energy ministers slated for next week in response to the market conditions.
“The skyrocketing electricity prices are now exposing, for different reasons, the limitations of our current electricity market design,” European Commission President Ursula von der Leyen remarked during a speech Monday. “It was developed under completely different circumstances and for completely different purposes. It is no longer fit for purpose.”