Prices soared to new records this week because of the impact of unexpected nuclear outages in France and worryingly low stockpiles across the continent.
Buyers and sellers are now high alert for signs of cold that would send prices into total meltdown.
Omicron will likely be dominant across Europe by mid-January and that could lead to de facto lockdowns where companies don’t have the necessary staff to continue as normal.
Analysts say it wouldn’t even require a repeat of February 2018’s “Beast from the East” to trigger market meltdowns this year, only a few degrees below normal will be enough.
While there may be enough capacity now — albeit at an eye-watering price — it’s set to deplete more quickly than in previous years, according to Hanns Koenig, head of commissioned projects at Aurora Energy Research Ltd.
Nyrstar, a leading global zinc producer owned by Trafigura Group, will halt production at a smelter in France in the first week of January because of soaring power prices.
In Britain, “more persistent” inflation was behind a surprise decision to raise interest rates for the first time in three years on Dec.
Three of Germany’s nuclear power plants will also shut at the end of this year and thus unavailable during the coldest part of winter.
An escalation of the tensions between Kyiv and Moscow could make the energy crisis worse, with the potential for Russian gas shipments to be curbed or halted altogether in the case of an invasion.
If Russian gas exports remain at current levels, Europe’s storage sites will be less than 15% full at the end of March, the lowest on record, according to consultant consultant Wood Mackenzie Ltd.