European gas prices increased on Wednesday as the European Union announced its plan to raise over 140 billion euros in funds to soften the dealt against consumers by rapidly rising energy prices. According to a statement by European Commission President Ursula von der Leyen, the plan includes capping profits of fossil fuel-burning energy producers as well as low-cost energy generators.
The Dutch front-month contract increased by 21 euros to 237 euros per megawatt-hour (MWh) while the next-day delivery contract sat at 234 EUR/MWh after a 26 euro gain. Britain’s day-ahead contract rose by 25 pence to 390 pence per therm, while the October contract increased by 59 pence to 450 p/therm.
Aside from the announcement of the EU’s fundraising plan, a colder weather forecast was also identified as a driver for the price rise. According to the head of Germany’s energy regulator, a cold winter could significantly deplete the Central European nation’s gas supply, with potential shortages remaining unforeseeable until they hit.
Natural gas flows to Germany dried up on Thursday, with supplies from the Nord Stream 1 pipeline from Russia to Germany remaining shut. Gas flows from the Yamal-Europe pipeline from Germany to Poland also declined significantly.